By LISA SCONTRAS
Custom Publishing Group

Timing is everything. Rather than waiting, intuitive buyers are customizing offers to take advantage of both low interest rates and the seller's competitive interest to sell.

It's part of a national trend.

Why? Two reasons.

First, frustrated that it is taking longer to sell a listing, sellers are more open to negotiating — price, terms, ... pretty much everything is on the table.

And secondly, buyers know that with the possibility of interest rates rising, any savings realized by waiting for prices to dip slightly could be ultimately offset or negated altogether by the significant increase in monthly payments that comes with as little as a half-percent rate increase.

On the Mainland, sellers are sweetening the deal by throwing a car into the sale, or maybe a trip or the furniture. But, generally, those types of incentives are being offered in regional areas where an over supply of homes has shifted the market more dramatically than it has here.

Marshall Mower, Realtor and partner at Prudential Locations LLC, says that the practice of using incentives hasn't become as common here in Hawaii yet. Even while the inventory is up from 2005 levels — and buyers have more choices — inventory is still relatively low compared to figures throughout the 1990s.

"We are not at that stage," he says. "Our market has more of an international appeal than most regional markets on the Mainland."

Still, Mower says the changes in the market could be an opening for buyers to get creative — by coming up with their own incentives. It's more common today, for example, to see offers made which are contingent on the buyer selling their own house before they can go through with the purchase.

"Some sellers that have been on the market longer than anticipated and now may have an urgent need to sell may be open to creative incentives that provide a win-win situation for both parties," says Mower. "If the property they are interested in is priced aggressively high and it has been on the market for awhile, a buyer can offer a lower price and/or ask for a credit towards closing costs."

The philosophy behind deal sweeteners gives way for tire kickers and buyers in general who are on the sidelines trying to time the market perfectly, to name their own price and terms.

"A year ago, we had record home sales and tight supply with buyers bidding over the asking price," says David Lereah, National Association of Realtors chief economist. "This year, sales are slowing, homes are plentiful and sellers are negotiating."

Mower suggests discussing incentives with your Realtor first. Depending on the neighborhood, your Realtor may encourage you to throw out an offer to see if the seller bites. It's critical that you know about the most recent sales in the neighborhood, however, and that you don't take the incentive concept to the extreme.

"If a property seems to be priced well and is a highly desirable property, offering too low or asking for too much may result in someone else getting an accepted offer before you do," he warns.

Mower emphasizes that interest rates are still historically low as are today's 60 to 80 average days on the market.

Other changes in the Oahu market which equate to buyer incentives has to do with the home's condition. Buyers today, according to Mower, are looking for properties that are in move-in condition rather than one that needs all kinds of work. At today's prices, the last thing a buyer wants is to make repairs immediately after they move into their home.

"Sellers who go that extra mile, who take the extra steps to make the cosmetic enhancements before going onto the market, will likely see their homes sell in a more timely fashion."

Owner occupants and those who don't already own real estate are benefitting most from this shift in the market, as the competition among buyers slows down, creating some great buying opportunities for those who are looking.

"Keep in mind that over time, home prices rise at the rate of inflation plus one-to-two percentage points," says Lereah. "Buyers in most of the country who plan to stay in their home for a normal period of homeownership can pretty well bank on those historic averages. People who purchased last year, with the intent on flipping are the ones likely to get burned."

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