Bankrate.comOctober 18, 2013Just as you test drive a car before writing that big check, what if you could take a home for a spin before committing? It would give you time to check the water pressure, see what kind of light the kitchen gets in the morning or find out if the neighbor's dog barks continuously in the evening.
Some sellers are handing the keys over to potential buyers who want to spend time alone in a home to "test drive" its features.
A new concept is taking hold that allows prospective homebuyers to spend several hours alone "test driving" a residence before making offers.
Sights, smells, sounds
Limor Nesher, real estate agent with CORE, a New York brokerage, has arranged for potential buyers to spend up to 12 hours in homes they are serious about purchasing. She says that while most are initially surprised at the idea, they quickly warm up to the opportunity to take a closer look. "Buyers get a chance to take in the details of the building, experience the attributes of an area, potential noise issues and other factors that can't be detected in a one-time visit alone," Nesher says.
There are benefits for sellers as well, Nesher says, because allowing the hands-on experience may encourage the buyer to move forward and could result in a higher sales price or quicker deal. "Sellers that have a unique property or one that is located in an emerging area generally like the idea, as they understand the added benefit this opportunity presents in marketing their home," she adds.
Making sure they have protection
There are obvious potential problems with this arrangement, however, with liability being a hot button for both buyer and seller. "Sellers are generally concerned about the security of their personal belongings, liability factors and the authenticity or credibility of the buyer," says Nesher. Buyers, she adds, "tend to be most concerned about liability as well, being cautious of not damaging any items in the seller's home."
So how can sellers protect themselves? There are no established rules regarding payment from prospective buyers for spending a few hours in a home, Nesher says. She suggests sellers set up written agreements, ask for security deposits and/or install hidden cameras for protection. Additionally, she says, credit checks and preapproval letters from a bank also provide a good source of financial information and show readiness to buy.
Will it catch on?
Although a few other cities are catching on to the trend, Nesher says only time will tell if it becomes a lasting one. In areas where demand is high, buyers may not have the luxury of taking their time. But Nesher says it's a marketing option. "Although we are currently working in a seller's market, especially in New York City, it is important to remain open to alternative methods of marketing a home," she says. "A potential buyer presented with the opportunity to live in a property before making a decision can be a make-or-break moment in the home's sale."
Would you be willing to offer this option to a potential buyer?