SHOULD YOU OFFER BUYER INCENTIVES IN THE 2025 HOME-SELLING MARKET?
As we move through 2025, the housing market in Canada and specifically in regions like British Columbia continues to evolve. Economic pressures, interest-rate dynamics, changing buyer behaviours and policy shifts mean that what worked yesterday might not work today. One question many sellers are asking: Should I offer buyer incentives? Let’s dig into when it makes sense, when it doesn’t, and how to do it smartly.
Why Buyer Incentives Can Make Sense
1. Weaker Buyer Demand & High Inventory
Recent economic commentary suggests that demand is not as frenzied as in past years. In some U.S. markets, sellers are already offering concessions to close deals.
If buyers feel they have more choice or leverage, incentives can tip deals.
2. Affordability Pressure on Buyers
With elevated borrowing costs, many buyers are more cautious. When the barrier to purchase is higher (due to interest rates, down-payment-stress, etc.), an incentive from the seller can soften the psychological or financial hurdle.
3. Standing Out in a Crowded Market
If many homes look similar, an incentive can differentiate yours: maybe covering certain closing costs, pre-paying strata/condo fees, offering a home warranty, or including certain appliances/furnishings.
4. Speeding Up the Sale
If you need to move quickly (job relocation, divorce, downsizing), offering incentives may accelerate the sale and reduce carrying costs (taxes, heating, maintenance, etc.).
Why Incentives Might Not Be Right
1. Risk of Undervaluing Your Property
If you offer large incentives, it might set a psychological floor for buyers (“If they’re giving that, maybe the price is too high”). Also, you may be giving money away when you might instead reduce the list price or adjust conditions.
2. Incentives Can Signal Desperation
Sometimes buyers interpret big incentives as a red flag (“What’s wrong with the property?”). It’s important that incentives are framed carefully so they don’t undermine buyer confidence.
3. Market-Segment & Location Dependence
In hot markets or for highly unique/sought-after homes, you may not need incentives. If demand is still strong in your neighbourhood and your property is well-positioned, standard pricing + presentation might suffice.
How to Use Buyer Incentives Smartly in 2025
• Set a clear goal: Do you want a faster sale? Higher net proceeds? More favourable closing timeline? Match the incentive to your goal.
• Keep it relevant: Incentives that directly reduce the buyer’s cost or stress tend to work best — e.g., covering inspection costs, paying for moving costs, offering a one-year home warranty, or finishing landscaping.
• Cap the incentive: Define a maximum cost to you so you don’t erode your margin.
• Highlight the value: Make sure the incentive is visible in your marketing (“We’ll pay your first 6 months of strata fees”, “Includes $2,000 moving allowance”).
• Partner with your agent: Make sure your listing agent knows the incentive and presents it as a strategic benefit, not a “must-had” correction for a flaw.
• Monitor the market dynamics: If buyer demand in your area is still strong (low inventory, many competing offers), you may not need to offer incentives; but if you’re seeing longer days on market, incentives can help.
Specific Notes for British Columbia / 2025 Context
• The market is facing affordability headwinds, construction cost pressures, and policy shifts in BC.
• Because many buyers may feel stretched, offering buyer incentives can help your listing stand out.
• However, local factors (neighbourhood, property condition, pricing strategy) will heavily influence whether the incentive is appropriate.
Yes, in many cases in 2025, offering buyer incentives can make sense, but it isn’t a one-size-fits-all solution. It’s a strategic tool you should use when your situation aligns with market realities: slower demand, higher buyer stress, or a need to move quickly. Be intentional, keep the incentive focused, and ensure it adds value without undermining your position.