BY ERIC HUTCHINSON

These days, there’s no doubt that Realtors need to get creative when enticing buyers to finally take the big leap. The Homebuyer Tax Credit has certainly helped, but over and above that, what else can be offered during final negotiations to help buyers, first-time or otherwise, finally put their signature on the line?



In the midst of the real estate tumble, stories of unorthodox ways to add value to a home purchase were reported, with things like a new car or an extravagant vacation thrown into the mix. The offer to include staging furniture that complimented the home’s interior was another interesting appeal. 

With the complete meltdown of the economy and glacial-speed recovery, however, comes a pervasively cautious attitude: individuals on both sides of the transaction have scaled back to basics. And homebuyers, especially, want to see true value, either short term or long term, when presented with incentives to finally buy.


Short-term savings
Attractive incentives of significant short-term value for buyers include those that save them money in the housing transaction. With a house purchase representing the largest of a lifetime for most individuals, things that pare down that overwhelming expenditure are often welcomed and serve as the final push to purchase. 

These can include price reductions for properties that have been on the market for a long period of time, home warranties that cover the repair or replacement of home components and appliances, payments for home inspections, payment of points or the first year of mortgage payments, a mortgage rate adjustment for a limited time, reduction in Realtor commissions and the prepayment of a portion of closing costs.

Cash rebates from the real estate agent to the buyer equaling a pre-determined portion of the Realtor’s commission can be offered, which can also take the form of gift cards to home furnishings retailers and home improvement stores.


Long-term value
What happens if the source of the buyer’s gun-shy concern is of a more long-term nature? Recently, some innovative new products were introduced that are based on the concept of protecting a home’s value. The notion of protecting 100 percent of a newly-purchased homes value, even through real estate fluctuations and rapid market declines like those that have recently devastated homeowners nationwide, is a very strong one, indeed.

So just what are these products that can pack the attractive punch of long-term value that just might entice a buyer to sign? 



Equity Protection products come in two forms: lifetime protection and flexible term protection. With lifetime protection, 100 percent of a home’s market value is protected for as long as the customer owns the home. Easily paid for as part of a home closing, or as a single payment (or offered as an incentive by a savvy real estate agent), protection of 100 percent of a home’s value is available for as little as 1 percent of a home’s price.

Flexible term protection gives homebuyers concerned about changes in the housing market an easy and affordable way to immediately eliminate risk of loss due to market declines until markets normalize, or for as long as they feel protection is needed. The product protects 100 percent of a home’s market value for as long as it is maintained, and can be cancelled at any time. Real estate agents looking for a creative incentive may offer to reimburse or help with monthly payments, which are based on the local housing market risk profile. 

So whether it’s the prospect of immediate savings or longer-term value protection, there is a wealth of creative ways to give potential buyers that all-important nudge. With just a little creativity and an openness to some new ideas, that buyer will sign in no time.



Eric Hutchinson is Co-President of Working Equity, Inc. For more information, visit www.equityprotection.com.

Copyright 2009 Agent Publishing LLC