Desperate times call for desparate measures (agent, mortgage, mortgage, sales)

[turnerfamily]

I'm having my 2nd open house this weekend and my realtor called and asked if I would be interested in a program they're offering.It involves the seller paying the first 6 months of the potential buyers payments.This is set up upon closing and is figured as if 100% is financed at 6.25%.They said this allows the buyer time to enjoy the holidays without mortgage worries and if they need the money for furniture,etc....Now for us that's about 9000.00 which is fine since I've already done one price reduction and I'm still flexable on my price but the whole idea behind this program just isn't right to me.I know it's part of sales tactic, but it sounds almost too "gimicky" to me.Anyone else heard of this program or agree with it?

[twinmma]

Never heard of it myself, but your title of the thread says it all. I would probably consider it for my realtor brought it up.
We are offering sellers assist and one years HOA. (Starting Nov 1, as our current promo, lol, is a buyer agent bonus)
I am in marketing and love that aspect of selling a home, just not my own!
Good luck! I am sure some realtors here will have some great advice!

[LinusK]

Sounds gimicky to me too.

Personally, I'd rather have 9K off the price of the home... which doesn't mean it wouldn't work for other buyers.

Wish I could be of more help.

[Charlottean]

There is a lot of this popping up. I've been receiving e-mails from the banks recently. They are promoting "rate buy down" programs, and such.

[turnerfamily]

It reminds me of a car program in the past that offered no payments the first year.Problem with that was when the people realized they couldn't really afford the payments the car had depreciated 1 year already and they couldn't get out from under it.Sound familiar?

[SaraSatin]

I would think, as we are just about to be hit with a whole lot of trouble when the ARM's reset, that the banks would only approve someone for this if they could afford the payment. Either way, if it does turn out that something happens and they can't afford the payment in 6 months then either way you wouldn't have to worry about it. I know it sounds horrible, but if it's your way of getting out of the house then you should take it. Someone could come buy your house without that program and not be able to afford it in 6 months. That is something that they will have to deal with.

[martinez4]

How would it work?? It seems odd ...you would not be on the title but you would make their payments for 6 months? I am with the other poster....lower your price and be done with it. Who knows where you will be financially in the upcoming months and if you buy another house, you will have two payments yourself.

[GregTraub]

Banks are rolling these programs out to the public now. They have been available through builders for a long time now. Everything is 100% legal and it's something unique to offer buyers that helps differentiate your home from someone elses.
Some people see 9,000 off of a 300K home and say that's piddle, but tell the same people they won't have to pay a mortgage for half a year and it might pique interest. Some people just think about how much a home will cost monthly.

How this works is like this. The property is sold, you the seller are off title and you walk away with your check. The 6 months of mortgage payments are escrowed at closing into an account with the lender. The size of the account is established before closing and is limited by certain lender standards. For the next 6 months the buyer's mortgage payments are made from this escrow account. Come month 7 the escrow account is at $0 and the new owners have to make their first payment.

The bank DOES qualify the buyer on what the payment will be on month 7, and the program is still a full 30 year fixed type mortgage.

I say go for it, what can it hurt. Any smart person will at least see that since your willing to pay 6 months of mortgage that if they prefered it be taken off the price, that they can make their offer on that.

Are you getting showings still? will a 9K price reduction put you in a lower price bracket? (ie 299K instead of 308K?)

[MikeJaquish]

Originally Posted by GregTraub

Banks are rolling these programs out to the public now. They have been available through builders for a long time now. Everything is 100% legal and it's something unique to offer buyers that helps differentiate your home from someone elses.
Some people see 9,000 off of a 300K home and say that's piddle, but tell the same people they won't have to pay a mortgage for half a year and it might pique interest. Some people just think about how much a home will cost monthly.

How this works is like this. The property is sold, you the seller are off title and you walk away with your check. The 6 months of mortgage payments are escrowed at closing into an account with the lender. The size of the account is established before closing and is limited by certain lender standards. For the next 6 months the buyer's mortgage payments are made from this escrow account. Come month 7 the escrow account is at $0 and the new owners have to make their first payment.

The bank DOES qualify the buyer on what the payment will be on month 7, and the program is still a full 30 year fixed type mortgage.

I say go for it, what can it hurt. Any smart person will at least see that since your willing to pay 6 months of mortgage that if they prefered it be taken off the price, that they can make their offer on that.

Are you getting showings still? will a 9K price reduction put you in a lower price bracket? (ie 299K instead of 308K?)

I can't give Greg a Reputation another rep point yet.
Excellent explanation.

My prelicensing instructor told us, "Learn how Money works, and you will succeed in Real Estate."

It is not a gimmick, just a good marketing ploy, and offering another avenue for "money to work."
There will be a certain amount of money to cross the table, in various directions.
As long as the Seller's net and the Buyer's funding are agreeable and above board, it sounds like a win-win for some folks.

[turnerfamily]

After 45 days I reduced it 10k(now 245k) after 3 showings which includes first open house.I'm still flexible, but with that program it would change things somewhat.It has been on the market 2 months now and I'm really not pressured for time but my realtor makes it sound like the longer you wait the less you'll end up with.The problem is that ,those who are "having" to sell now,for whatever reason necessary, are dragging down the expected sale prices on those of us who really are not in dire straights.My neighbor just packed up and left his house after 1 year.Looks like *@#? all around it outside.