Today home sellers who want to move their properties in the existing market conditions face a number of challenges. Selling a home in today’s market requires part ingenuity, part creativity and in some case just part luck. Despite the existing market conditions; however, there are some techniques home sellers can use to improve how their property fares in the current market.

When attempting to sell your home in the existing market conditions it is important to understand the challenges you are facing. Not only must you compete with other home sellers but you often must compete with buildings as well. Unfortunately for most home sellers, builders can take advantage of the fact that they have partnerships with lenders. These affiliations can make financial incentives available that the average home seller is not aware of. In reality, there is really nothing that a builder can offer that you as an individual seller cannot match; provided you take the time to do your research.

Most home sellers reduce their prices as a first step when trying to make their properties more attractive to buyers. Unfortunately, that technique usually does not work because quite simply in most cases it is not the price that is preventing the property from selling. If a prospective home buyer is constrained by their income or do not have the cash for a down payment and closing costs then reducing the price will not help the situation. In this situation it actually makes better sense for the home seller to offer to cover at least a portion of the home buyer’s closing costs, if not all of the home closing costs. In such situations, the seller could actually come out far better financially by offering to pay $5,000 in closing costs than dropping the price of their home by $10,000.

In the event the buyer is facing income restrictions, there are also possible solutions which can assist both the buyer and the seller. In this type of situation the buyer is likely facing restrictions which are imposed by lenders restricting maximum ratios regarding income to expenses.

Once again, reducing the sales price by $10,000 will not help such a buyer. Instead, the savvy seller might consider paying points for the buyer. This will help to reduce the interest rate for the buyer while at the same time retaining the same sales price as well as the loan amount. The result would be a reduce monthly mortgage payment for the home buyer which could be enough to assist them in being approved for the loan. Yet once again, a home seller may be able to purchase points for a buyer for less money than they would pay by reducing the sales price.

Another option for motivated home sellers is to purchase a temporary buy down for the buyers. Purchasing points is known as a permanent buy down because the lowered payment and rate will endure for the duration of the loan. Sellers could; however, offer to buy down the payment during the first years of the mortgage.

This is known as a temporary buy down. For example, the seller might offer what is known as a 3-2-1 buy down. In this scenario, the first year of the mortgage would be calculated at 3% below the prevailing interest rate while the second year would be calculated at 2% below the prevailing rate and the third year of the mortgage would be calculated at 1% below the prevailing interest rate. Sellers might also consider what is known as a 2-1 buy down where only the first two years are reduced. Another option would be a 1-0 buy down. In that scenario only the first year of the loan would be calculated at below the prevailing interest rate.

The total cost to the home seller for a temporary buy down depends on the type of buy down they purchase; however, you can generally expect it to be about half the price of a permanent buy down. For home buyers who are constrained by current income requirements; however, the purchase of a temporary buy down can provide a strong incentive and could even help buyers attain approval for a loan that would not otherwise be possible.

By investigating lower cost alternatives, home sellers who have faced challenges in the current housing market may find it is not as difficult as they first imagine to sell their house. Taking the time to research your market and work closely with your agent to pinpoint your target market can help to bring positive results despite the softening market.