How do I overcome a sluggish market to sell my house?
When a house is stuck in seller's limbo, one way to jump-start the sale is to offer a mortgage subsidy. While the amount of money involved is less than a price reduction, the bottom line is often more attractive to buyers.
- Here's how it works:
The seller offers a fixed dollar amount per month in cash to buy down the mortgage payment. The subsidy could be less for the second year, and even smaller if it is continued at all for the third year. The total amount of the subsidy would be placed in an escrow account at settlement.
- For example:
A $200 per month subsidy would cost the seller a total of $2,400 the first year. Reducing the buyer's payment by $150 per month the second year would cost an additional $1,800 for a total expenditure of $4,200, considerably less than a $10,000 price reduction, but more likely to attract attention in a slow market.