Question: If I should have to sell, what is a better tactic: present the buyer with a credit at closing or reduce the asking price?
Answer: I see agents who list properties where their seller offers a credit towards a lacking area in the home all the time. Example, a home has carpet or flooring that needs to be replaced. They allow a $3500 credit towards carpet/flooring at closing. This is all fine and good because it’s a way to acknowledge that you know it needs to be replaced or needs attention.
However, I feel a price reduction is always best. It allows you to have a clean contract and you’re not “mudding the waters” so to speak. You addressed the issue and knocked down the price – then everyone is happy. When you have your home listed, a buyer will use issues like needing new flooring, updating a bathroom, and other minor issues that need to be fixed as a negotiating tool. So if you are offering a credit for an issue upfront on the listing, they may try to get you to offer more credits for other issues. Doing a final offer (price reduction) helps keep the negotiating process from lingering over every little thing and at the end of the day – it’s all about the bottom line .
Caroline Dargan Johnson