Home sellers take incentives to new heights

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If 9,800 square feet, 35 acres, five bedroom suites, a gourmet kitchen and an oversized “man cave” with a home theater, pool table and bar aren’t enough, Brad and Kim Oaster are ready to throw in a little something else to lure a buyer for their $2.5 million home.

They’re offering a 2001 collector’s edition red Ferrari convertible. Free.

Desperate times call for desperate measures.

The rickety economy is causing home sellers in all price ranges do a little more than go the extra mile to seal a deal.

Sellers have for some time offered perks that include covering closing costs, cash-back offers and lease-to-own options. But as the economy has worsened, the offers have gotten better.

Sellers are now offering things such as:

Trips to Europe.

Payment of Home Owners Association dues.

Free landscaping.

Cash bonuses.

With trends like that, it’s hardly surprising that one inventive seller at the new Flying Horse community in the northern part of the city offered to pay the Flying Horse Club’s $7,000 initiation fee.

Another Kissing Camels’ home owner knew his upscale community attracted golfers, so he bought a used golf cart to leave in the garage — and included a year’s worth of lawn service. His house sold in less than 60 days.

The Oasters knew a golf cart wouldn’t do it for their  $2.5 million abode north of Monument.

“We’d had it on the market before at a higher price, but it didn’t draw the attention we were hoping for. By adding the car, we hope we’re differentiating ourselves,” said Ken.

Alan Wilaby, a veteran broker selling the Oasters’ home, said he’s “seen it all” but was amazed at the prospect of including a Ferrari, that, by the way, has just 4,800 miles on it.

The tactic might be working.

“We already have two showings set up,” Wilaby said. “At most we might see one or two sales in that price range every month or two, so it pays to stand out.”

Others, however, don’t think gimmicks will help.

Prudential Professional Real Estate managing broker Becky Gloriod, like Wilaby, has been selling million-dollar properties for years.

“The Ferrari is a nice touch. But I really don’t think that will sell the house. It’s all about price, even for buyers at that level,” she said.

Still, that hasn’t deterred sellers and brokers, who are watching the list of the highest-priced homes on the market grow longer each year.

There are about 600 homes in the area listed for $500,000 or more.

Wilaby said there are 27 homes in the million-dollar price range listed on the realty board’s multiple-listing service and that only two sold last year.

“We’ve got 33,000 brokers and they see all kinds of seller incentives,” said ERA Franchise Systems CEO Charlie Young. “Some offer trips to Paris or sell homes furnished. So far in 2010, we’re up 16 percent in sales closed compared to 2009. Prices are starting to stabilize or are slightly on the rise.”

So, how are the incentives working for homes on the market for $500,000 and up?

“Not so much,” he said.

One Response to Home sellers take incentives to new heights

  1. I’m sure the property is beautiful and the Ferrari is a nice touch. However, the customer pool to draw from for $1 million plus priced properties is shrinking. Those who have the financial resources for such a residence are paying 50 to 75 cents on the dollar of what is being asked. Especially to those owners who must sell. In todays devalued economic environment and the very uncertain economic future, what kind of exit strategy can a purchaser formulate for this kind of property. The home will not be a cash flowing income producer. It will be a financial liability. Plus, in my opinion, it is “a flip of a coin” if the property will appreciate in value. The belief that “real estate always appreciates in value” has been painfully proven untrue.

    The Buyer of the property will be that person or couple who falls in love with it, wants it and may overpay what they should to own it.

    Joe Valdez
    March 5, 2010 at 12:31 pm