If you had a house/townhome/condo that hadn’t sold and you’d already had some price drops with no offers would you rather consider an additional price drop or would you offer credits at closing to buyers? We’ve been watching as many homes and condos now sit on the market a bit longer than we’ve had happen over the past 4 years.
I recently got into a discussion about this with a client because his condo hasn’t been moving. Part of what is impacting his sale is that a lot of condo conversions came on the market about the time he went back on market, plus, his place is being considered along with townhomes in the area – and these don’t have homeowner dues so there is a price disadvantage to the condo owner. Over the past 2 months we’ve had some decent price drops but to try and limit the financial hit my client asked about offering a year’s worth of homeowner’s dues in the form of a credit. This credit could then be used for a prospective owner to hold onto to make payments toward the HOA dues or they could apply it to their closing costs to help buy down the interest rate and saving him/her even more money over the timeline of the loan period.
Here is one of the downfalls: While a credit is a good idea in general it doesn’t necessarily show up the same as a price drop will online. To show that a credit is available an agent must put the information in the marketing comments, agent comments, flyers, and all ads (online or print) for the property. The thing is – when you put the info in the marketing comments on the NWMLS you cannot guarantee that other broker websites will display that information because each website has a different IDX (Internet Data Exchange) set up – some show comments and others don’t. The “agent remarks” are restricted to viewing by the member agents of the NWMLS only so the public, again, wouldn’t see the comments and not know about the credit. A major disadvantage to the seller.
Usually, I’ve had this conversation about price drops versus credits with a client when a home hasn’t sold for 30 or more days. Thankfully for me and the majority of my clients very few sellers get into this predicament to begin with because we find a good middle ground of time versus money. But it has happened on occasion. What kinds of sales does this typically happen to? To the client that wants the highest sale price possible.
Selling a home is always a trade-off between time versus money, and the more you want for the property the longer it will take to sell, even in a high flying market. And, right now, while Seattle is still one of the best marketplaces in the USA it has seen a significant slowdown in the rate of appreciation on properties with the latest figures showing us at around 9-12%. This is in comparison to the past 5 years where rates closer to 12-35% per year were common – although “common” in that period is really “uncommon” in the long term view of real estate.
So, what have we done to try and offset the disadvantage to our client? We’ve tried to find ways to get the info out in other formats. Other online venues allow us to type in our own comments such as on our website, Seattle Times online or print ads, Realtor.com, Craigslist, Zillow and more. It still doesn’t get us as much coverage as it would if the marketing remarks showed up on every broker site but we can’t regulate that, unfortunately. We can do the best we can and put the info in as many places as can be found as well as following up with any and all viewings of the unit. Personally, I know that price changes show up everywhere and it is the one way toward a level playing ground of information. However, we’ll do all we can to help continue aggressively marketing the property which I still believe has one of the best views in Seattle for the price and value of the property that comes with it.
If anyone has a recommendation of some other format, I’d love to hear it. What has been your experience in offering a credit versus a price drop?
