Sell a Home Now with Creative Thinking

Forget everything you have learned about real estate for a moment and consider the reality we are in a sluggish housing market.   The years 2002 through 2005 were abnormally buoyant in regards to easy home sales at inflated prices with easy loan approvals for everyone.   Fear (some of it unfounded), not greed, now rules the roost.   Everyone is paying close attention to find integrity from the borrower, the loan originator, the appraiser, and the Realtor ®.   The market has returned to quality loan originations, but has dampened prospects of finding able home buyers.

But suppose you want to sell a home quickly in this stagnant market.   What then?

When negotiating a real estate sales contract, consider doing a mortgage rate buydown or using Private Mortgage Insurance to your advantage and buy or sell an unsold home.

In a mortgage rate buydown, the interested parties to a transaction agree to raise the purchase price by X and the seller credits the buyer X dollars to discount the rate received from the bank.   This effectively lowers the rate to the borrower making monthly payments more affordable and sells a house that sat on the market for too long.

Private Mortgage Insurance or PMI also makes sense for all parties involved.   Many banks are fleeing from second mortgages and the risk of taking a second position in a property with little or no equity invested.   Mortgage insurance has made a comeback.   Used when a down payment is less than 20%, it absorbs the risk to the bank in the event of a costly foreclosure and eliminates the need for a second loan with its additional closing costs.  Here again, the parties to a contract raise the purchase price by X and offer that credit back at the closing.   Those funds can offset the cost of making monthly PMI payments.   If monthly payments don™t make sense for the buyer, try using a lender paid option or a one time lump sum payment and negotiate the cost into the home sales contract.  The net effect is a reduction in the monthly housing expense to the borrower.

These are old ideas that have worked in the past to sell homes.   The choice is simple.   Stubbornly wait for the other party to see all things your own way or try to work together for a win-win situation.   Sell that home now to a buyer who needs a little boost to get off the fence.

© 2008 Michael S. Amers

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