A Price Cut By Any Other Name
When is a home price cut not a price cut?
When it’s billed as “Seller financing” (or other creative Buyer inducements).
In a soft rental market, landlords will do practically anything to entice prospective renters without actually lowering their nominal rental rates.
By far the most popular gambit is free rent (typically, one or even two months). Next most popular are “freebies”: free plasma TV, free tickets to Hawaii, etc.
Similarly, home owners who are loathe to take (more) price reductions are starting to offer other Buyer incentives.
Anecdotally, I’m seeing more instances of Sellers who are trying to move upper-bracket homes dangle attractive financing terms: second mortgages on attractive terms; contracts for deed (essentially, a Seller-provided mortgage, but one where title doesn’t transfer until the last payment is made); etc.
Which makes sense: one of the big impediments to selling an expensive home today is the premium attached to jumbo loans.
I’ve yet to see the “Buy this house, get the [collector sports car in the garage free] pitch,” but it may very well be coming . . .
