Dos and Don'ts of Homebuyer Incentives

The Do’s and Don’ts of Homebuyer Incentives

Should You Offer Buyer Incentives When Selling Your Home?

As a seller, it's natural to want your home to stand out. But should you offer buyer incentives — like covering closing costs, paying for new carpet, or throwing in a flat-screen TV?

The short answer: sometimes. But it depends on the market, the property, and how your offer compares to the competition.

When Buyer Incentives Can Help

In a buyer’s market — or when you're selling a home with dated features or unique floorplans — strategic incentives can tip the scale in your favor. I've seen incentives used successfully to:

  • Offset cosmetic flaws — Like offering a $3,000 flooring allowance instead of replacing outdated carpet.
  • Attract first-time buyers — Covering part of the buyer’s closing costs can be a big win for FHA or VA buyers.
  • Differentiate from the competition — If your home is comparable in price and features to nearby listings, a thoughtful incentive can grab attention.

Buyer Incentives That Work in Minnesota

  • Seller-paid closing costs (up to allowed limits)
  • Home warranties ($500–$700) — give peace of mind to buyers
  • Credit for new carpet or paint — when condition is holding buyers back
  • Flexible possession dates — helping buyers time their move smoothly

Buyer Incentives to Avoid

Some incentives can backfire, making your home seem like it's struggling to sell or causing confusion during financing.

  • Offering gift cards or TVs — lenders may see this as a concession or improper inducement
  • Huge allowances with unclear terms — they muddy negotiations and raise red flags with appraisers
  • Discounts for using a specific lender or agent — often discouraged or restricted under real estate law

Strategy First, Incentives Second

I always advise my sellers to lead with strong pricing, great presentation, and professional marketing. Only if we’re seeing slower activity — or if the comps suggest it — do we layer in incentives as a strategic move.

Sometimes, just the right incentive at the right time can revive buyer interest and close the gap in a negotiation.

Let’s Build a Smart Selling Strategy

Whether you’re prepping your home for market or already listed and want a second opinion, I’d be happy to help. I’ve worked with dozens of Minnesota sellers to price correctly, negotiate confidently, and offer incentives that work — without leaving money on the table.

💡 View my Seller Resource Hub for more strategy tips
✉ Contact me for a no-pressure listing consultation

Joe Houghton
Broker Associate | RE/MAX Results
Founder – Minnesota Property Group
📞 (763) 300-2702
🌐 www.mnpropertygroup.com

Location: Wayzata, MN, USA

Popular posts from this blog

Importance of Home Staging When Selling a Home

The Importance of Home Staging When Selling Your Home Sell Faster, for More — by Making Buyers Fall in Love In today’s competitive real estate market, great staging isn’t a luxury — it’s a smart selling strategy. Whether you're listing a starter home in Robbinsdale or a luxury lakefront property in Wayzata, how your home looks online and in person can dramatically impact your final sale price. As a full-time Realtor , licensed home builder, and investor, I’ve seen staging make the difference between a home that sits... and one that sells in the first week. In fact, staged homes consistently sell faster and for more money than unstaged ones — and there’s solid data to prove it. Why Staging Works Buyers shop emotionally – When a space looks clean, welcoming, and move-in ready, buyers imagine themselves living there. That emotional connection leads to stronger offers. Staging highlights your home’s strengths – The right layout, lighting, and minimal décor make rooms f...
Read more

Pricing your house right the first time is the best way to go.

Pricing Your House Right the First Time Set the Right Price. Maximize Your Results. One of the biggest mistakes Minnesota homeowners make when listing their property is overpricing it from the start. As a full-time Realtor with over 22 years of experience, I’ve seen firsthand how critical it is to price a home correctly right out of the gate. Those first 7–10 days on the market are your sweet spot — that’s when your listing is freshest and gets the most attention. It’s your best shot at generating buzz, showings, and strong offers. If your price is too high, you risk losing serious buyers before they ever walk through the door. Why Pricing Correctly Matters First impressions count – Buyers (and agents) are constantly comparing listings. If your home looks overpriced, they’ll scroll right past it. Online activity peaks early – Sites like Zillow, Realtor.com, and your MLS feed give your home a quick visibility burst — but only once. Price reductions can backfire – Dr...
Read more

How to Use Comparable Sales to Price Your Home

How to Use Comparable Sales to Price Your Home Understand the Market Like a Pro Before You List One of the most powerful tools in pricing your home accurately is the use of “comps” — comparable sales. These are recently sold homes that closely match yours in size, layout, condition, location, and features. If you're planning to sell your home in Minnesota, understanding how comps work can help you price your property to sell quickly — and for top dollar. What Makes a Good Comp? Not every sold home qualifies as a strong comparable. The best comps will have the following similarities: Same neighborhood or school district – A home just a few blocks away might not be comparable if it’s in a different zip code or feeds into a different school. Similar square footage and layout – Split-level vs. two-story, 1,800 vs. 2,800 sq ft — big layout or size differences skew pricing. Sold recently – Ideally within the past 3 to 6 months. In fast-moving markets, even 90 days ag...
Read more