To successfully sell a home, sometimes you’ve got to pull a few tricks out of your hat. One way that many sellers are trying to sweeten the deal for buyers and speed the process along is to offer buyer incentives.

There are a variety of ways to make a listing and the overall deal more attractive to buyers, but sellers should use incentives appropriately. Not every type of incentive will necessarily work with every deal. You want to make sure that you’re not wasting your time and money. For that reason, it’s important to determine what type of incentive would work for the types of buyers that are looking in your area to make sure it works in your favor.

If you’re not getting the offers you expected despite your best efforts to stage your home and price it right, throwing in an incentive can be the link that makes the deal happen. Just make sure to keep these pointers in mind when offering homebuyer incentives so they work exactly the way you need them to work.

Make Sure What You’re Offering is Legal

There are plenty of perfectly legitimate offers that you can entice buyers with: covering closing costs, buying down interest points, throwing in the furniture, and so on. But there are others that border on illegal.

Your real estate agent and lawyer will be able to help you determine what may be considered against the law. Take their advice before you choose what type of incentive to offer, and whether or not to use an incentive at all.

Use Incentives to Make Your Home Stand Out From Other Listings in Your Area

Unless it’s a super slow market in your area, you’ll likely be competing with other listings. Part of an effective marketing strategy is to make your home stand out from the rest. If you’ve done everything else to make that happen – such as having the home professionally staged inside and out – you might have to take an extra step to make buyers look in your direction.

Use Incentives to Compensate For Any Pitfalls in Your Home

It’s never OK to deliberately hide or conceal flaws in your home to buyers. That’s not only dishonest, it could also land you in legal hot water after the deal has been sealed. Sellers are encouraged to disclose any major flaws in the home before buyers put in an offer and agree to purchase at a certain price.

Flaws in a home can range in degree. They could be as minor as a cracked tile or peeling paint on the window sill. They could also be more expensive to rectify, such as an old roof or a furnace on its last legs. Whatever the case may be, you should be upfront about these flaws, and consider compensating for them through an incentive. That’ll help ease the sting of having to deal with such issues after the buyers move in.

Don’t Come Across as Desperate

The last thing you want to do is seem overly eager and motivated to sell. In some cases, offering an incentive might make you come across as desperate to get your home off your hands as quickly as possible. Buyers will pick up on that, and will act accordingly.

Maybe they’ll think that there’s something wrong with your home, and may avoid putting in an offer at all. Or perhaps they’ll think they’ve got the upper hand in the transaction, and will throw in a low-ball offer. Sometimes the offer of an incentive can backfire on you, so make sure you use caution before you decide to use them.

Don’t Offer an Incentive Coupled With a Price That’s Too High

Every seller wants to get the most money upon the sale of their home, but that doesn’t mean it’s OK to overprice the property. Not only is this greedy, it’s also unethical. It’s always a good sales tactic to price your home according to what the current market dictates. That way, you’ll be able to sell quickly and for as close to what your home is worth as possible.

If you’ve overpriced a home, don’t offer an incentive to offset the inflated price that you’ve listed your home at. Buyers these days are well-informed before they begin their house hunt, and with the advice of their real estate agents, they’ll know right away if a home is priced well over what it should be. By throwing an incentive into the mix, savvy buyers may quite simply be insulted, and gloss over your home altogether.

In addition to this being shady practice, it can also be dangerous for the overall market. Buyers who receive cash offers to pay for an overpriced home would then use that extra cash to get approved for a larger mortgage that they would otherwise not be able to obtain. Some experts have gone so far as to claim that such tactics like these were partly responsible for the housing crash.

Regardless of whether that’s true or not, it’s sound practice to list according to true market value.   

The Bottom Line

Incentives can work wonders at selling a home. In fact, they often can mean the difference between a sale and a stale listing. However, careful consideration needs to be made before you arbitrarily choose what to offer buyers. Along with all other aspects of selling a home, the decision to use a homebuyer’s incentive should be made with caution.

Photo Credits: Pavel L Photo and Video / Shutterstock.com

RAVENSWOOD

Come out for happy hour and an evening of shopping during tonight’s Summer Edition of Damen at Night. Participating businesses such as Orange Beautiful (4658 N. Damen Ave.) and Bang Bang Pie Shop (4947 N. Damen Ave.) and many more are staying open a little later than usual. Take the CTA Brown Line to the Damen Stop and check out the entertainment and discounts this lovely strip of businesses along Damen Ave. between Eastwood Ave. and Argyle St. have in store from 5:00pm – 9:00pm tonight, Thursday 8/11.

LINCOLN PARK

Locally produced works of musical theatre are being showcased this month in the third Chicago Music Theatre Festival. Fourteen new shows and a workshop for musicals in progress will be running 4 times each from 8/9 to 8/28 at Victory Garden Biograph Theater (2433 North Lincoln Ave.). The Festival is the brainchild of Underscore Theatre Company that is a collaboration of writers, actors, musicians and producers that was founded in 2011 to produce and premiere the talents of Chicago musical theatre creators. This year’s lineup presents an eclectic array of subject matters that are explored creatively through song, dance, drama and comedy. Follow the link above for show summaries and to purchase tickets.

PORTAGE PARK

Front Porch Concerts brings local musicians to various Chicago neighborhoods to the literal front porches of houses where audience members can gather, listen to live music and enjoy a sense of community. These concerts provide exposure for local musicians and allows audiences to explore local musicians and neighborhoods at the same time. This Sunday, 8/14, 3316 N. Kirkpatrick Ave. will host Hey! Rabbit and Marshall Lewis from 5:00p.m. to 7:00p.m. Free beer from Revolution Brewing will be available while supplies last.

LOOP

Update from last week’s Windy City Rubber Ducky Derby, the 11th annual fundraiser for Special Olympics Illinois that pits adopted rubber ducks against each other on a no-holds-barred race down the Chicago River. Last Thursday, 8/4, at 1:00p.m. 57,147 rubber ducks were dumped by a truck off the Columbus Dr. bridge into the Chicago River towards the finish line at Wrigley Building. The 5 winners have been named and they won from Grand Prize to 5th Prize: a new Chevy Malibu; a three-night Cancun trip; the Chicago Family Pack including admission to Shedd Aquarium, a Chicago Wolves hockey match, and gift cards to various Chicago stores; a $929 gift card to use at the Rosemont Fashion Outlets; and tickets to the NASCAR Sprint Cup Series in September. At $5 per ducky entry, donations, and proceeds from the family festival area, the event raised $400,000 in 2015. So far this year’s Ducky Derby has generated $330,000 for Special Olympics Illinois with more matching gifts and donations yet to be processed.

NAPERVILLE

When it comes to ranking in 2016 Cities with the Best Public Schools in America, 2nd place is not the least bit shabby. Niche.com, Inc, the company formerly known as College Prowler, has been collecting the opinions of millions of students, parents, and professionals to rank and review schools, colleges, cities and neighborhoods since 2002. According to Patch.com, the ranking is based on state test scores, graduation rates, SAT/ACT scores, teacher quality and reviews from students and parents. The graduation rate of Naperville students is 93.8% which is 10 percentage points higher than the national average of 82.2%. Way to go, Naperville!

CATHY MALLERS & DEAN’S TEAM CHICAGO

This summer has been relatively dry at least right around Chicago. Despite this the yard and garden are bursting forth. Of course this is from the necessary watering we are forced to do with the many extreme heat waves we’ve had. With frequent necessary watering comes diseases connected with wet. A good fungicide sprayed on leaves before it appears will usually prevent fungus and mildew. But really who remembers to do that? Our best bet is to take care of it as we see it. Thin out the plants to ensure better air circulation and to encourage drying out. Any affected areas should be pruned away and quickly and carefully disposed of. These spores will spread if placed in compost or even in a pile at the end of the garden. Improve drainage if you can and be judicious using mulch! Not advisable in very wet conditions. Keep up with your weeding. I know they are growing like crazy and frankly I get tired of it by now but you’ll thank me next year. Again, do NOT COMPOST WEEDS. All you are doing is perpetuating more weeds.

Have a look all around the perimeter of the house. Is there clutter against the house? A lumber pile too close to the house can harbor insects and mice. They love nothing more than a pile of toys or tools leaning against the house. Great stuff to burrow in. It can also deteriorate siding, cement and brick to the point of basement leaks. Remember around the house, air circulation and dry conditions are ideal. Make sure all drains are open. We are going to get some big storms eventually so our drains AND GUTTERS need to be clear and free flowing.

Now is the time many perennials, trees and shrubs are on sale at garden centers. Now is not the most optimum time to plant trees and shrubs, late fall is best for that. But might as well take your pick of the better choices early. Keep root balls well-watered and they can hang around for several weeks. As it is really early I would stick with perennials for now. Check out trees and shrubs later in the month. Planting new perennials this late in the year has its challenges. With all the heat, daily watering is a must for the first two weeks. After three weeks fertilize with half-strength solution. As we get to the end of the season we need to be careful with plants like shrubs and perennials. You don’t want plants that overwinter to get a lot of new growth late in the season. Growth needs to be hardy enough to get through the winter.

KATHLEEN WEAVER-ZECH & DEAN’S TEAM CHICAGO

The allure of downtown living is obvious: being in close proximity to work, shops, eateries, entertainment, and just about every other handy amenity is the height of convenience.

But along with the advantages of downtown living comes the tight living spaces, the sky-high prices, and even bidding wars.

Buying in urban centers definitely poses both benefits and obstacles, but if you’re well prepared, you can land the perfect abode without becoming house poor and losing your patience.

Have Your Financials in Order

Before you even start pounding the pavement in search for a home, it’s critical that you make sure that you’ve got a good handle on your finances. Make a visit to your lender first to find out exactly how much you can comfortably afford, and how much of a loan you would likely get approved for.

Having a pre-approval letter in your hand when making an offer will help you get a leg up on the other buyers vying for the same property. In fact, most sellers in a hot market probably won’t even consider your offer without one. Once you’ve figured out your financials, the house hunt can begin.

Get Ready to Move Quickly

If you’re looking to buy in a busy urban city, be prepared to move fast. Homes are usually snatched up just as quickly as they’re listed. In larger centers that are a little short on inventory, the competition can be fierce. In situations like these, multiple offers and bidding wars are the norm.

That’s why it’s crucial that you come into the game prepared and armed for what lies ahead. You basically need to be ready to jump in full throttle without hesitation, which is why getting your finances in order beforehand is such an important step.

The buying process can be extremely fast in many urban centers across the country, such as San Francisco, Seattle, New York City, and so on. While some smaller cities might have markets that are more moderately paced, the larger housing markets tend to move incredibly quickly.

Adapting yourself to handle such a speedy, competitive housing market can help ensure that you don’t get caught up in an emotional whirlwind of putting in reckless offers that will cause buyer’s remorse the day after. Before you dive head-first into a hyper-swift real estate market, understand the mistakes you might be vulnerable to making, and what red flags to watch out for.

Find Out the Exact Market Value of Homes in the Neighborhood

Knowing the fair market value for specific homes in the neighborhood you’re looking in is critical before you get caught up in a bidding war. Many buyers fall head over heels in love with a home, and lose touch with the logic behind the prices they’re willing to offer the seller just to come out the winning bidder.

Before getting involved in such a situation, it’s important to find out what the true value of the home is, and set a limit as to how much you are willing to offer. Without this number in front of you, it can become easy to go well past your cap.

Not only do you not want to pay too much for the home, you also don’t want to risk being denied a mortgage because the home is not appraised at the amount you agreed to pay for it. Lenders will send in a professional appraiser to value the home according to current market conditions.

If an under-appraisal comes in, your lender will likely not approve you for the loan amount requested. For instance, if the appraisal comes in $50,000 lower than the price you agreed to pay, you will have to come up with the difference if the bank declines to provide you with more than the appraisal amount.

Be Open Minded About Various Neighborhoods in the Area

It’s easy to fall in love with a certain pocket in the city, but keep an open mind about other areas in the neighborhood. If there aren’t many homes to choose from or the listings are way out of your price range in the area you’ve set your sights on, you will be setting yourself up for disappointment when you can’t find anything.

Instead, keep an open mind about other neighborhoods in the city that are similar, and offer the same types of features and amenities, such as close proximity to shops and public transportation. Scope out each neighborhood to get a feel for each, and see how they would fit in with your lifestyle. By keeping a few neighborhoods on the list of potentials, you’ll be opening up yourself to greater opportunities and choices.

Factor in the Cost of Transportation

Living downtown is ideal for those who don’t have a vehicle and depend solely on public transportation to get around. In fact, one of the biggest appeals of living in urban centers is the ability to walk, bike, or bus it to work.

However, if public transportation is on the agenda, you should factor in the cost for such convenience. Homes in city centers tend to be priced at a premium for being so close to public transportation. You can offset this price somewhat by living along a bus route rather than being directly on top of a metro station, for instance.

And if you’ve got a car, you’ll need to park it somewhere, and that typically comes with a steep price tag. Parking in downtown cores tends to be very expensive, so it’s important to factor in these prices in the particular neighborhood you’re looking at before you decide to buy a home.

If the property you buy doesn’t come with a driveway, you’ll likely have to either rent or buy a parking spot. Depending on where you’re buying, you could be spending anywhere between a few thousand dollars in smaller centers to up to $100,000 in hotter markets like New York or San Fransisco.

Living downtown certainly has its perks, but just like any other buying situation, it’s important to go into the game fully prepared before you sign on the dotted line.