Why You Should Not Use The Word "Allowance" In A Listing

To many times I come across listings that have the phrase "seller willing to give X amount in "allowance toward (fill in the blank)". What does that say about your listing? Are you doing your listing justice by writing that in there? Is your seller portraying the home in a negative light?

The first thing I think of when I see that is the home needs work. Most times the allowance is designed toward carpet or appliances. However; since the seller cannot actually give you money at the closing table what good does it do to advertise you are willing to give X amount in allowance for floors, paint or aplliances? Why would the seller not jsut price the home accordingly to the condition of the house and let the buyer decide if the work is worth it or not?

A lot of buyers today are looking for homes that are in move in ready condition. By that; unless the price is below market value they want a home that needs little to no work when they move in. So, the question remains are you doing your listing justice by writing that in the remarks section. Are buyers automatically bypassing the home? Most buyers today are asking the seller for concessions on closing costs already. So, they have saved enough money for the downpayment and maybe a little extra for some paint and moving expenses. But do they really have enough money to do the additional updating you are asking for? Probably not.

When you start to write allownace in your remark sections it portays the home immediately in a negative light. I talked with a few buyers who looked at homes online with that phrase in it and they said the first thing they thought of was the home was not cared for or outdated. It could be something simple as not having the time or the money to finish it...yet, it is viewed in a different light among buyers.

I tend to tell sellers adjust their price accordingly to the condition of the house. Let the buyers make an offer knowing the home needs X amount of updating. What you may think is horrible might be a gem to someone else. You do nto know what the buyer feelings are going to be when they walk in the house. If it is priced according to the condition and updating inside the house then the house will sell... Buyers know if a home is priced below market value for the neighborhood there is some work to be done to the house. But,you may never get them in the house to begin with by putting in an allowance for something and keeping your price up to offset the allowance.

Price your home accordingly to the condition of the home and the neighborhood comparables and let the buyer decide if it is something that needs to be done NOW or can wait...You never know your home may sell sooner than later.

Dave dicecco
Realtor/Broker
www.davedicecco.com