| In 2006 with many residential real estate markets | | | | The problem with these givebacks is that they |
| in the doldrums, real estate agents and home | | | | don't always get properly recorded when the |
| sellers decided giving buyers; flat-screen | | | | home is sold. Real estate appraisers find |
| televisions, tropical vacations, automobiles both | | | | themselves in a difficult position using a home that |
| new and used, closing costs and a myriad of | | | | they heard, but can't verify, was sold with |
| other freebies would perk up buyers interest in a | | | | significant credits to the buyer as a result of seller |
| competitive marketplace. | | | | sweeteners. On a two-hundred thousand dollar |
| But many buyers were not buying the incentive | | | | home, a five-percent incentive is ten-thousand |
| hype. And, legally the practice was first | | | | dollars; which in effect makes the true sale price |
| questioned as a violation of The Real Estate | | | | $190,000. That's a large difference, especially |
| Settlement Act and professional appraisal | | | | considering a seller looking to sell their home and |
| standards. Some incentive-filled contracts were | | | | using the $200,000, when the home's real value |
| executed, but filled with disclosures to mortgage | | | | to the market is $190,000. Plus, the buyer will still |
| lenders and tax accountants. | | | | pay property taxes based on the $200,000 |
| Typical sweeteners to buyers: | | | | recorded sale price. |
| -One year free condo assessments. | | | | Mortgage lenders don't look favorably either on |
| -One year free property taxes. | | | | sweeteners. If you are considering using |
| -Closing costs credit up to five thousand dollars. | | | | incentives in a home sale or purchase, talk to an |
| -Free home theater or flat-screen television. | | | | experienced real estate attorney before |
| -Free new or used automobile. The gamut ran | | | | advertising any givebacks. The majority of buyers |
| from 2007 Ford Focus to 2005 Jaguar S Type. | | | | today really look for savvy home sellers who |
| -Free all expense paid trip to Mexico for 2 or a | | | | avoid gimmicks and price a home where sold |
| Hawaiian vacation for four. | | | | comparables from the last six-months indicate it |
| -Incentives as a percentage of the homes value | | | | should be priced. Many buyers feel home prices |
| ranged from 1.5% to 6 %. | | | | are raised to cover the costs of buyer incentives. |