Why Seller Credits are a Bad Idea when Selling a Sacramento Home
Seller credits are a bad idea when selling a home. Usually, when a seller says she wants to give the buyer an opportunity to select the item of their choice, it’s because the seller is too lazy to do it herself. Or, she doesn’t want to spend the money. She’d rather spend it from proceeds she will never see because she hasn’t finished the house.
It is a misconception to believe that buyers want to pick out their building materials, as though they were buying new construction. Residential resales are not new construction. Besides, in new construction, the home is delivered to the buyers at closing already finished.
Still, it’s sometimes difficult to get through to sellers that seller credits are a bad idea. For starters, buyers who obtain financing can’t take a credit for a home improvement project. The buyer’s lender will not allow it. The only way a buyer can accept a credit on a closing statement is if the credit is for closing costs. In most instances, the credit cannot exceed 3% of the purchase price.
If it comes to, say, picking out light fixtures, for example, or purchasing a finished home, buyers want a finished product. They also have enough to think about with moving their stuff, unpacking, getting settled. If they had to also shop for light fixtures, it would throw a wrench into their plans. You don’t want to make things more difficult for buyers. Especially Millennials today. Just give them what they want.
Sellers make the mistake of believing because they WOULD choose something, that everybody else thinks just like them. They don’t. Buyers don’t think like sellers. Buyers often behave as though the world revolves around them. They don’t care about sellers or what sellers want or expect. They want what THEY want. Which is a nice house that they don’t have to do anything to but move in.
So if you’re thinking about giving a buyer a credit in order to sell your house, please reconsider. Seller credits are a bad idea. If the home needs new flooring, bite the bullet and install it. If it needs a bit of paint, apply paint. It’s cheaper and it’s more effective. Further, buyers don’t know how much things cost. If a home is not finished, yet it’s priced like a finished home, buyers will hit that price. Hard. If they offer at all.
I’ve heard first-time home buyers proclaim: “It will cost $25,000 to paint this house!”
This is not my point of view. Sacramento Realtors sell homes based on what buyers want. If you don’t want to believe me, ask a busy buyer’s agent what buyers say.