I think that (legal) money back at close option is one that buyers like even more then a lower price. I know on my loan, the buyer paid into escrow. This was a mix of cash towards points and the rest in cash to pay for a furnace that was missing and a condemned fire place. The fire place I am fixing myself and I found a furnace on craigslist for free.
Thus, instead of low balling the price dramatically of the home which in the end only changes the payment by a small amount, I closed 5% off the price got 3 points paid by the buyer (13k) which dramatically lowered my payment and 8k cash for repairs that I put in towards my 6 months of reserves.
I spent 3 years waiting to buy our home and once the market started tanking, the homes that allured us the most were the ones with a price about 8% under comps with 20k or so back for one reason or another (i.e. One was a 30 year smokers house)
If I were selling right now and had some margin I would make it the lowest comp in the neighborhood and offer 20k or so in closing incentives. People like cash.
