HOMEBUYERS ON THE FENCE DETAIL WHAT THEY WANT
INDUSTRY NEWS, TIPS FOR BUYERS, TIPS FOR SELLERS
February 6th, 2009
An article recently published in the San Fransisco Chronicle listed 
incentives that would need to exist before buyers waiting on the sidelines will make the plunge into home ownership. A poll of more than 700 “on-the-fence” buyers finds that:
- 44% are holding out for lower interest rates
- 41% are uncertain they would be approved for a loan
- 38% are waiting for lower home prices
A tax credit of up to $22,000 for home buyers being pushed by a builder trade group lobbying the Obama administration would not be enough to motivate buyers. The most effective incentive that would persuade buyers 
to get off the fence is mortgage rates: specifically a 3% rate on a 30-year fixed-rate mortgage. Lenders I’ve spoken with don’t see this in the cards. They say there is no profit at that interest rate level.
Guarantees that a lender will approve a buyer’s loan with “fair” credit also ranked high in the survey. Price concessions of
about 10% would also be a high motivator.
Incentives of little value to new home buyers include:
- Free upgrades and amenities
- “Green” features such as energy efficiency certifications
The bottom line, according to writer Kenneth Harney, is a combination of incentives of “special financing, price concessions, lower down payments and perhaps application guarantees.” Is that asking too much?
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
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