Sellers Use Incentives to Lure Buyers

Buyers are in the driver's seat in today's housing market. New home builders are offering some pretty incredible incentives, including $15,000 in new furniture, season tickets to college football games, luxury bath spas, plasma TVs, even yearlong golf memberships in exclusive clubs. Builders say the glitzy offers are getting more people in the door, but it's the financial incentives that close the deal. Builders might offer to buy out a renter's lease or pay a home or condo owner's mortgage payments for 6 months. Some are offering to reduce purchase prices by $30,000 to $40,000 or provide up to $50,000 worth of free options and upgrades.

Obviously, you can't expect an individual home seller to offer incentives on the same scale as big-budget builders, but you can ask him to sweeten the deal before you sign your name on the dotted line, says veteran realtor John Day in his informative May newsletter. (Click the post title to read John's article, Should You Buy in THIS Market?) If you're buying a pre-owned home, it's reasonable to expect the following incentives, advises John.

• If you're putting down 10% or more, you can ask for up to 6% of the purchase price in incentives. While these incentives can't be cash rebates or be applied to your down payment, you can ask the seller to pay your closing costs or buy down your interest rate.
• If you're putting down 5% or less, you can ask for 3% of the purchase price in incentives. Incentive limits are keyed to lending standards that prevent mortgage fraud.

Talk to experienced realtor John Day. He can explain what incentives are being offered in the area where you're buying or selling a home. John can recommend a lender who can discuss your particular circumstances and the incentives that might be available to you. Read John's monthly newsletter for practical advice on buying and selling homes. In it you'll always find interesting articles and easy to understand charts that track trends in the housing and mortgage markets. For additional information on buying and selling a home, visit John Day's website. If you're buying or selling a home in Maryland or the greater Washington DC metro area, John Day is your key to success.