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Free parking for one year! A free flat-screen plasma TV! Your choice of a free car or furnished condo!
In the market for a new condo? You may be in luck. With the housing market in a serious slump, these are just a few of the freebies that anxious sellers and developers in Chicago are offering to hook prospective buyers.
Robert Aguilar scored an electric scooter in May when he committed to buying a new-construction unit at the Emerald condos, an eco-friendly development in the West Loop. In addition to the scooter, Aguilar received $5,000 in free upgrades for his two-bedroom, two-bathroom unit, which is slated for completion in April 2008. Aguilar said he will pay $400,000 to $460,000 when he closes on his new home next spring.
Still, he thinks the EVT 168 scooter, valued at $2,000, was a good perk.
"It's eco-friendly, a nice little ride and it's fun," the 33-year-old told RedEye.
The scooters originally were given away in a monthly drawing at the sales center, said Patrick Hawkins, a real estate agent with Property Consultants, which manages the sales for Emerald. The company began offering the scooters as an incentive in April after a number of potential condo buyers expressed interest, he said.
So far, Emerald has given away six; the deal continues through the end of September.
"People would say, if you threw in a scooter right now, I'd buy a unit," Hawkins said. "People love it."
Although Hawkins said the scooter incentive was started in part "to bolster sales," he said the giveaway was not in reaction to a slowing housing market. Instead, "it was another thing to keep things fresh and moving along," he said.
Although the use of incentives is not new in real estate, the tactic has recently gained more attention in the media as the challenging home market forces sellers to become more creative. According to research by the National Association of Home Builders, 75 percent of U.S. builders and development groups are using everything from furniture to vacations to cash to lure buyers.
The real estate agents RedEye spoke to don't deny the Chicago home market is in a slow patch, but most took an optimistic view of it as a great opportunity for first-time home buyers. Existing home sales in Chicago were down 13 percent in July compared to the same time last year, according to an Aug. 28 report from the Illinois Association of Realtors. And condos, which made up 39 percent of the country's new multi-family construction projects in the first quarter of 2007, are being hit the hardest by the slowing real estate market, according to a press release on the NAHB Web site.
RedEye found a showcase showdown of condo freebies in recent Chicago real estate listings -- flat-screen TVs, cash bonuses, free parking and one year of free condo assessments. Among the more unique offerings: CRF Marketing, a division of Koenig and Strey/GMAC recently gave away iPhones with signed contracts for some of its North Side development projects, and the seller of a $499,000 two-bedroom mid-rise unit in Old Town is offering to throw in either all of his condo's furnishings or his Pontiac Solstice convertible.
"We realize there are a lot of choices out there for purchasers," said Brian Merrion of City Point Realty, the seller's agent. "Anything we could possibly do to get (buyers) to choose our unit ... that's why we were thinking of different incentives."
But not everyone is biting. Flashy incentives might sound appealing, but buyers might want to look for more traditional incentives like free assessments that would benefit them more financially, said Chicago real estate agent Jo Ellen Oster.
Oster said buyers may be able to get more for their money if the cost of a giveaway was instead applied to monthly assessments or taken off the price of the condo.
Lakeview condo owner Andra Naylor, 26, who received a 42-inch Samsung flat-screen TV when she bought her first condo in May 2006, said she realizes her freebie likely was built into the price of her place. Still, Naylor, who declined to say how much she paid for her one-bedroom condo, said she felt like she got "a bonus," adding that she would've bought the condo even if the free TV wasn't part of the deal.
Andrew Young, 31, whose two-bedroom, two-bathroom condo in Lakeview has been on the market for six months, is skeptical of the effectiveness of incentives.
"I have to think about what I would do," Young said. "Would I buy a house based on some incentive? No."
Young, who has dropped the price of his condo three times -- a total so far of $30,000 -- blames the slow state of the real estate market for his condo's failure to sell. "People are just really picky right now," he said.
If his condo continues to languish on the market, Young said he is more likely to lower the price again.
How about offering a free TV or scooter?
"I don't think doing something like that is going to sell a house," he said "It might get people in the door, but at the end of the day ... you're buying a condo, not a scooter."
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Quick tips on buying and selling
After working as a real estate agent in Chicago over the past five years, Jo Ellen Oster of Blockshopper MLS knows a thing or two about how to successfully buy and sell a condo. Here are a few tips she has for first-time condo buyers and sellers. [ E.H.L. ]
See as many places as you possibly can. "I like to show my clients everything -- as much as they can stand," Oster says. "I have clients who have seen 100 places. By the time I get done, I don't have to tell them if it is a good deal or if it is well priced -- they know."
Take time to calculate the total cost of a condo before deciding to buy. "Take taxes, utilities, assessments, mortgage after down payment, and know for each place what the monthly cost of that place is going to be," Oster says.
"Narrow the search," she says. "If my clients won't consider a house that doesn't have a certain feature ... there is no sense in everyone wasting their time going to houses without that feature." Oster says.
De-cluttering is key when prepping a home for showings. "You have to go through your house and get things weeded out," Oster says. "Put things in storage."
Put a little money into sprucing up the place. Add a fresh coat of paint, redo the landscaping if necessary, add some flowers here and there. "Anyone who watches HGTV's 'Design to Sell' or any of these other (home-improvement) shows can see, if you want the most money for your house, you have to do a little work," Oster says. "First impressions are the most important."
Price your unit right. "If you are not realistic with your price, your house is just going to sit there," Oster says.
Free for all
Forget plasma TVs and scooters, here's what RedEye would like to see in our condo swag bags.
- Free Wi-Fi
- Free DirecTV (forever)
- Free HBO (forever)
- Annual CTA pass
- Free maid service
- Choice of Cubs, Sox or Bears season tickets
- A condo of equal or lesser value
- An open bar in the lobby
EMILY HISER LOBDELL IS A REDEYE SPECIAL CONTRIBUTOR