It’s a tough market out there right now, though there are some very good signs on the horizon.
The best sign I’ve seen is the drastic reduction in the supply of available housing that happened in December. The National Association of Realtors tells us that the supply number dropped from 11.2 to 9.3 in one month. (This means that two full months of housing supply was consumed in December alone.) Here is the info:
You’ll also notice that the supply of available housing has dropped quite significantly (17%) as compared to this time last year, so there are some positive signs, to be sure.
However, it’s certainly still a buyer’s market. And that can make it tough to convince buyers that they should purchase your property.
So maybe, a bit of creativity is in order. Do you have any creative ways to motivate buyers to take action right now, rather than in the future? If so, sound off below!
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I probably should have just included this in the post above, but here are some of the “statistical” facts one can reference in motivating a buyer to act now rather than later:
1. The trend noted above (whereby housing supplies are clearly falling) – the inevitable upward pricing pressure that will have on real estate prices
2. The National Association of Realtors says their housing affordability index is at a more favorable level than it’s ever been since it was created in 1970
3. Mortgage rates are historically low right now
4. Tax credits are available of up to $7,500 if you’ve not owned a home in the last 3 years (or so my understanding of the law indicates)
Clearly these are all “statistical” types of motivators, but it’s still possible they can help you make your case. I suspect that a huge deterrent for home buyers is FEAR that they’ll get crushed in a second wave of economic weakness. If you can minimize that concern, you’ll probably have a big leg up.
One other thing – I think it might make sense to consider allowing a potential buyer to buy your property via owner financing with the following special considerations:
* Within a year, they can give the house back to you without a foreclosure (as long as they don’t damage the property) if they lose their job
* After a year, they have to get permanent financing
That’s an idea worth exploring. I’m not sure of the legal/tax ramifications, but it may be worth checking out.
Hello, I have a way that will increase the purchase of homes and sell them quickly. I am offering home buyers no payments for 1 year.
The part about doing seller financing with the option of getting the un-damage house back if terms are not met was good. If it is legal that will sell many houses.
My usual exit strategy is lease option. While not offering “no payments for a year” like rodolfo, I do offer generous rent credits. IIRC, the highest has been 75% applied to the purchase price. This has pretty much had the phone ringing off the hook. My problem right now is not finding the buyers, but finding the houses to put them in. Not that I’m complaining
Rodolfo – That’s really interesting that you give buyers no payments for a year. That raises a lot of points of concern for me, but what matters is that it’s working for you. If you want to fill us in on the details about how you make that work for you both financially and legally, we’d love to hear it.
Bill – Wow! it’s great to hear that you’re able to easily find buyers. (That’s not something I hear a lot presently.) Your creative approach to moving your properties is spot on and definitely what it takes to be successful in today’s market.
Bryan Ellis
I’ve been thinking along the same lines, and developed an (unimplemented) program that lets a buyer exit the home at purchase price less transaction expenses — buyers know we’d have to resell the home and pay another commission, title policy, closing costs, etc. — in the event that they lose their income to unemployment, illness, death of the breadwinner, etc.
The best way to do owner financing in almost all states is via an equity-holding land trust. This gives the buyers all the tax and equity advantages of fee-simple purchases, while the seller is protected by treating the occupants as tenants subject to eviction rather than foreclosure in case of a default.
IMHO most lenders are stupid to crush their borrowers rather than allowing an equitable way to exit honorably with the home in near-mint condition and minimal revenue months lost.
I offer the buyer the opportunity to buy my home with no payments for 1 year. Just as if a builder give incentives of upgrades, closing cost etc… I offer no payments for 1 year. The incentive brings alot of attention and I have people in my homes. They lease the home on a month to month tenancy with the possiblility of buying the home from me if the lender agrees to sell me the short sale. I cash flow and will sell the home to the tenant as a lease with an option to buy after I have closed with the lender. After the 12 month option they will receive the benefit of no payments for 1 year or discount amount of the value of the home whatever they decide at that time. I have another program that do not require the buyer to lease option the home.
Tell me your concerns and maybe I can shed some light on your views.
Thanks
Rodolfo