A Maserati -- as bait
Stopping short of installing glue traps to ensure that prospective buyers can’t get away, sellers, builders and real estate agents have been reaching deeper into their bag of tricks in their efforts to move the ever-increasing homes-for-sale inventory.
They are giving away new cars, trucks, plasma TVs and chances to win expensive vacations to those who buy, refer a buyer or, in the case of Coldwell Banker, even just agree to chat with them without using a pseudonym.
The market’s slowdown has spurred a flurry of buyer incentives -- and some creativity -- on the part of people trying to sell homes, new or otherwise.
So, how creative are they?
A Denver-area couple, whose condo was listed for more than a year, made national news when they announced they would give away round-trip, first-class tickets to Europe or a bottle of Chateau Lafite Rothschild -- worth thousands -- to a buyer willing to sign on the dotted line.
Closer to home, Mark Tacconelli, an agent with Noble Real Estate in Ladera Ranch, has clients who are offering a brand-new Toyota pickup truck to whoever buys their 2,300-square-foot La Habra home, listed at $750,000.
“If they don’t want a pickup, they can have a Prius,” Tacconelli said, covering all bases. “Or if they don’t need a new car and just want to knock $15,000 or $20,000 off the price, that’s fine too.” The man is practically begging here.
Then there’s this spin on the car giveaway: Instead of giving the car to the buyer, the seller of a new Tuscan villa with five bedrooms and seven bathrooms in Bel-Air will give a 2006 charcoal Maserati to the realty agent who brings him a buyer. The house is listed at $5,280,000, says listing agent Michael Mandekic, Prudential Realty Beverly Hills, who has co-listed the property with Todd Marks of the same agency. The Maserati is already parked in the driveway; the seller will pick up the lease for two years. Please, no drooling.
Thinking “green”? Builder Clarum Homes, trying to sell five energy-efficient homes in a Watsonville senior citizens housing development, is giving away the popular Toyota Prius hybrids to buyers of their units. Clarum, which incorporates solar panels and water-conservation features into its homes, hopes the hybrid will be more tempting buyer bait than upgraded counter tops or fancier appliances.
Appealing to a different market are the developers of a San Diego condo complex with a primo downtown address and relatively low prices, starting at $300,000. They’ve resorted to giving away free plasma TVs and gift certificates worth $5,000 toward decorating.
If you buy a Beazer Homes town house in its Iris Landing project in the Moreno Valley, you’ll also get a free 42-inch plasma TV.
When it comes to giveaways, Ron Phipps of Phipps Realty in Warwick, R.I., may rule the roost. He offered a Lexus last November with one of his listings. The buyer wound up rejecting the car and taking a price cut instead, but the gimmick generated a lot of interest in the house, he said.
Phipps’ personal favorites on the creativity scale: $5,000 toward the installation of solar panels; a tradable time share; a $10,000 gift card and a personal shopper to help use it; and, one that his wife abhors -- a fur coat -- apparently a popular giveaway in the colder climates of the East Coast.
Phipps now tries to tie his own promotions to some specific aspect of the property he is selling -- things like free landscaping for a year or paying the homeowner association fees for a fixed period of time.
What’s in a name?
Sometimes, it’s just a matter of getting clients in the door -- even just to talk.
That’s why Coldwell Banker is offering to send a lucky Californian on a $10,000 trip to New York just for giving the agency his or her name and contact information. The sweepstakes program offers three or four trips a year, said Coldwell Banker’s Sarah Mac Donald, who sent the contest mailings to the Santa Monica neighborhoods she sells in.
Agent Mac Donald considers it just one piece of her overall marketing pie. She’s been selling real estate for 22 years and says she personally would never advise clients to offer cars or trips when they list their homes.
“It’s silly,” she said. “This is a price-driven market; it’s that simple. If it’s priced right, it will move.”
Go tell that to home builders with unsold inventory who have joined the giveaway bandwagon.
Greg Paquin of the Gregory Group of Folsom, which provides market research and consulting services to the new-home industry, has seen builders in the Sacramento area offer free trips to Las Vegas, home-entertainment systems, gift certificates to local furniture stores and an annual membership in the golf club.
Dallas-based Centex Homes gave away in-ground swimming pools to buyers of their last few, lingering houses in a Northern California development, Paquin said.
Then there are home builders who figure that the best way to reach someone may be through their wallet. They “buy down” interest rates to make their homes more affordable or absorb closing costs for their buyers. Some builders offer special incentives to those who already own one of their homes if they refer a friend.
Centex, for an unspecified “limited time,” is offering Southern Californians special financing programs with initial interest rates starting at 0.875%.
Cars, TVs, free vacations -- does it really make sense to do business this way?
Not from a buyer’s property-tax perspective. If the value of the car being given away is $40,000, why not just lower the price of the home by that much and be done with it? After all, the new buyer will be paying property taxes based on the purchase price of the home. The lower the purchase price, the lower the annual tax bill. Of course you may not need the tax break, given that the interest on that hefty mortgage payment is tax-deductible.
In this market where competition for buyers’ attention is fierce, it may be that the agent with the most clever gimmick will win the prize.
Times staff writer Gayle Pollard-Terry contributed to this report.