Sweetening the Deal

Heard the joke about an iPad, luxury car or vacation being offered to buyers or salespeople to cinch a deal? Well, those possibilities aren’t just jokes.

Barb St. Amant, salesman with Harry Norman Realtors in Atlanta, says she’s shown homes where sellers offer a week’s vacation at beach houses in Florida. “Buyers can be brutal in what they ask for in this market.”

Bill Golden, also an Atlanta salesman, with RE/MAX Metro, concurs. “We’re dealing with emotional sellers who most often are losing money on their largest asset, but, on the other hand, we have keyed-up buyers who have it in their heads that they can just about steal any house on the market,” he says. “The reality is somewhere in between, and it’s often a hard place to get to.”

While the glitzy offers steal headlines – and sometimes work, they’re less common these days, says Timothy Elmes, a salesman with Coldwell Banker Residential Realty in Ft. Lauderdale, Fla. His firm used to offer brokers Rolex watches and all-expense paid weekends to a St. Thomas Ritz-Carlton hotel, but found they weren’t effective. Today, the more common come-ons are for sellers to offer salespeople extra funds, Elmes says. Or, sellers try to reel in buyers by paying closing costs, buying new appliances, having stagers re-arrange furnishings, lowering the listing price or piling on value-added services.

Enticing the Environment

When it comes to staging, now more commonplace, the strategy can cost a buyer from $500 to $1,000, or more, says Golden. “It’s particularly important when a house has a difficult floor plan,” he says. Jennifer Ames agrees. “We are staging nearly every listing to some degree, from aggressive decluttering to a complete makeover. It’s essential in this market,” says Ames, with Coldwell Banker Residential Brokerage in Chicago.

The developers of the small luxe Carriage House Condominium building in New York’s chic Chelsea neighborhood are giving their two penthouse buyers free parking spaces within the building, valued at $225,000. “We have just eight spaces and decided those who would want them most are the buyers of the two most expensive units [$2.7 million and $3.6 million]. They’re also the ones most likely to own a car in New York,” says Eric Gray, one of the three partners at Broad Mill Development Group.

Realtor Barbara Wulfing of Janet McAfee Real Estate in St. Louis told one owner a dated master bath would turn off buyers. The owner remodeled with a white marble counter, frameless glass shower door and small flat-screen TV, and the bait worked –though the buyers insisted on having the TV – a minimal expense at $250 – thrown in.

Because of the difficult climate, prices are being lowered from the get-go, and more home-related services tossed in. In Elmes’ market, prices are 30 percent off what they were five to six years ago, he says. Waterfront lots are 50 percent down, since they were purchased mostly by spec builders, who now are less active, he adds.

These days some salespeople also incur more expenses to close deals. Designer and saleswoman JoAnn Roberts, with Coldwell Banker Residential Real Estate in Miami, purchased a warehouse and filled it with $100,000 worth of high-end furniture to redecorate clients’ homes for free. She also bought a truck to haul everything to them.

Her tactics have helped her attain higher prices and faster sales. She recently redecorated a 1955 home appraised at $235,000. “I redid bathrooms with new vanities and mirrors, painted the inside and outside, added trim, and received a fast offer with no contingencies for $280,000. We spent $10,000 to $12,000, so the sellers still did better,” she says.