Whatever It’s Called … Reverse Offers/Buyer’s Incentives Help Sell Properties
Posted by: Carleton Sheets in Seller, Sale on Real Estate, Reverse offer, Real Estate Market, Real Estate, Property, Motivated Seller, Market Value, Housing Market, Creative Financing Techniques, Buyer, Builder on May 22, 2009.
Once again, I have to thank my staff who brought a selling technique to my attention that I haven't heard about in years.
A technique that was commonly referred to as a "reverse offer" is in the news again. This is an aggressive technique used when sellers present buyers with an offer to purchase the sellers' property---instead of vice versa. And although it's more common for builders to use this technique to sell their inventory, some homeowners are trying to sell their property following the same premise as builders do with buyer's incentives.
A reverse offer from sellers generally targets buyers who may be "on the fence" about buying their property, and need a little more incentive to make an offer. The sellers' reverse offer to the buyers can include a lower price, and other incentives---like seller assistance to buy down the interest rate or to include appliances or furnishings with the purchase.
There is a caveat to this technique ... the sellers must be in a position to negotiate a lower price or be able to offer other incentives to the buyer. For instance, if the sellers' mortgage is close to---or more than---the property's market value, the technique won't work ... unless the sellers and buyers can work together to negotiate a short sale with the sellers' lender(s).
This brings up a good point about pricing in the marketplace. Assuming that the home is priced right, it should sell in a reasonable amount of time without a reverse offer. Does this mean that seller's homes that stay on the market for long periods of time are not priced right? Are the sellers unwilling to negotiate if it means losing more---or all---of their equity. Does the time frame have more to do with the sellers' motivation?
What do you think?
