Rocking chairs on a front porch provide a welcoming touch. (Photo: iStockphoto)
More Americans are signing contracts to purchase homes, with first-time homebuyers leading the way. This may be due to the $8,000 homebuyers tax credit which is available through November. It's likely that more first-time homebuyers will aim to make a purchase soon, as they try to meet the homebuyer tax-credit deadline.
So what does this mean if you're a homeseller? It means that you're going to want to appeal to this segment of the real estate market to up the chances of selling your home. To attract first-time homebuyers, you may want to:
1. Drop your price. You don't have to reduce your price by a lot to get the attention of buyers. Even a price that's just a little lower than comparable homes -- say a $5,000 discount -- might get the attention of homebuyers. That discount may even be able to reap you a higher selling price should the discounted price attract enough buyers and a bidding war should ensue.
2. Make your home move-in ready. Often, first-time buyers have a limited amount of money they can spend on a home. Generally, they want a home that's move-in ready, since they might not have the means to make decorating changes or to pay for repairs. So, you'll want to think about making minor repairs and upgrades to your home -- so it looks up-to-date and so you won't scare off buyers with repairs that may need to be done.
3. Stage your home. You can do this on your own or by hiring a professional home stager. You want to give your home curb appeal and to make it show like a model home -- this means that it must be clean, that there must be no clutter and that the furnishings and décor enhance your home instead of detract from it.
4. Cover closing costs. You can also make it known that you'd be willing to foot the bill for the closing costs -- this will help attract those first-timers who have limited funds available to them.
5. Help with a down payment. You could help the buyer come up with a down payment -- this might actually not come at a higher cost to you, because you may be able to make up for it by getting a higher selling price.
6. Pay points. You can bring down the interest rate for a buyer's mortgage by paying points. A lower rate may help to lower the buyer's monthly loan payments, as well as make the mortgage more affordable for the long-term.
7. Offer furnishings. Agent Alison Rogers offers tips on moneywatch.com on how to attract first-time homebuyers, and the one I like the best is the suggestion that sellers include furnishings with the home or to provide a furnishings allowance.
Friends of mine purchased their first home a few years ago, and one thing that helped close the deal for them was the fact that the owners, an older couple, left some furniture with the home. This is a big deal when you might be stretching your finances to afford the home, down payment, closing costs, etc.
8. Add incentives. If you don't have furnishings to offer, you could get creative and offer freebies like gift certificates for home cleaning or lawn mowing for a month or two. These types of incentives are appealing because not only do they offer the homebuyer a savings, they have a lifestyle appeal as well -- think having a Saturday off to hang out with friends or play with the little ones instead of having to push the lawn mower around.
9. Throw in a home warranty. For a few hundred dollars, you can give buyers peace of mind should something with a home's heating, plumbing or cooling go wrong after purchase. This is especially attractive for buyers who might not have the cash for these types of fixes after moving in.
Readers: Do you have any tips to share on how to best attract first-time buyers to purchase a home?—Lauren Baier Kim