Although you might be used to the concept of test driving a car, you probably have never really heard the same concept applied to homes. There have probably been many different situations in which those that have purchased homes have wished that they had the opportunity to try the home out before obligating themselves to years of mortgage payments. However, over the course of the last few years, likely in response to the financial crisis of 2008, the practice of trying a home out before making a purchase has become increasingly common. It is a relatively new concept for potential homebuyers. Will the concept of ‘test driving’ a home continue to gain in popularity? It will likely remain an oddity in the real estate industry, but one that a small subset of shoppers will always be interested in.
Why It Works
A number of real estate agents and brokerage firms have started to arrange trial periods for sellers to test out a home before taking the plunge and making the purchase. Limor Nesher, a real estate agent with CORE, a New York brokerage firm has started to arrange 12 hour trial periods for potential home buyers. If they have shown serious interest in purchasing, they can be approved to spend some time in the home. Although most sellers (and buyers) are initially surprised by the idea, there is a number of benefits that both will enjoy from the arrangements.
Buyers are able to get to know the home more intimately. It can be difficult to get a real feel for the home just by walking through it and checking out the space. It can be difficult to see how the dimensions and layout will affect your day to day life. Getting to spend a trial period in the home will certainly allow you to gain a better understanding of the home, and get to know it inside and out. Noticing the finer details of the property and experience what a specific area has to offer can help home buyers to make their decision and feel more comfortable with the decision that they have made.
There are also benefits for sellers as well, as well as a few worries and risks. Allowing a potential buyer to have some time to themselves in the home could encourage them to move forward much more quickly. Giving them the opportunity to check the home out in depth and check out the surrounding area may also cause them to strengthen their bid or be willing to proceed immediately for fear of losing a home that they have already fallen in love with. Giving them some time with the home allows them to gain a deeper appreciation for all that the home offers, and will help to make it much easier for them to take the plunge and secure a mortgage.
There are obvious issues with granting people access to a home that is for sale. A big part of the process is working with a real estate agent that is a good judge of character. This wouldn’t be the type of deal that you would extend to anyone that was showing interest, and instead should be an arrangement that is exclusively offered to those that have shown a large amount of interest in the purchase. Sellers will be concerned about the security of their home and the belongings that are contained within the home. Liability is another very serious concern that most sellers will raise for the purchase. In most cases, the seller may express interest in meeting with the buyer before agreeing to the arrangement.
In order for a seller to protect themselves in this type of dealing, a few things need to be taken into consideration. A basic security deposit can be a great choice as it ensures that any damage that befalls the property can be repaired through the use of the deposit. Sellers should always consider setting up written agreements in order to ensure that they are fully protected from any damages.
Sellers should also always run credit checks before allowing anyone into the home. A credit check can be a very simple and straightforward way to gain a better understanding of a potential buyer and help you to determine if you believe they would be too much risk for the reward.
Will It Continue to Grow?
Will allowing potential buyers to have a small trial period in the home before committing to the purchase catch on? Only time will be able to tell. There is certainly a growing interest in it over the course of the last few years and that upward trend is only expected to continue well into the future. As of right now, the practice is nothing but a marketing tactic for sellers, but if buyers have a genuine interest in these arrangements, you can bet that more sellers will show interest in pursuing them.
The tactic is particularly interesting for homeowners that are having trouble selling their home. Depending upon the part of the country that you live in, and the current state of the real estate market in that area, allowing buyers to have a good look before they purchase could help to get a cold market moving in your favor.
Whether or not these ‘trial inspections’ catch on remains to be seen. It is important that sellers remain open to different marketing methods for their home, especially if they are seeing a general lack of interest in their local market.