Toy Surprise Inside

Apparently it works for selling breakfast cereal,  but does it work for selling houses?

There is no doubt in anybody’s mind that seller’s are having a tough time of it these days. Buyer’s are rarely buying, and in fact, it’s a major success if a seller can even get somebody to walk through their home these days. So, it seemed like a good time to take a look at some seller’s tactics that I’ve seen recently… 

• Price drops. No frills, nothing fancy here, just your standard price reductions. These days even price drops don’t have as much impact as they used to since all of your neighbors are doing the exact same thing, that is, unless you put a spin on it and call it a “reverse auction.” Remember our friend Justin Wilcox at Bothellcountdown.com, who managed to get a whole lot of media attention for standard price drops. So far, the gimmick didn’t work and the home still stands at $75,000 below original list price.
• Auctions. Take a chance here and see what you can get on your home working from a low price going upward. In today’s market, I wouldn’t want to take a chance on this type of gimmick, unless you’re really willing to give away your home. Recall desperate homeseller, Ian Usher of Australia, who tried to auction off his home and his life. He tossed in all of his belongings, including his Mazda’s, his Kawasawki’s, and his friends (no kidding), Melanie, Em, Paula, Marty, et.al. The auction ended 7 days later at a disappointing closing price of about $381,000 USD–Usher had been anticipating about $100,000 USD more than he got.  (Maybe Melanie, Em, Paula, Marty, et.al, just weren’t quite hot enough to pull in that extra $100k??)
• Freebies. Toss in Freebies to sweeten the deal. Normally you’d think of standard upgrades that new home builders will throw in to encourage a sale, but these days on existing homes, I’ve seen or heard of everything from a Nintendo Wii, to a Lexus SUV, to a job and friends (see Ian from the paragraph above) thrown in to close a deal. I, for one, fail to see how a free Nintendo Wii could throw me over to the the flip side of a decision to buy a couple of hundred thousand dollars in property.
• Bonuses to the buyer’s agent. Here’s one of those ethical dilemmas that people grapple with all the time–is it morally acceptable (or even effective) to offer an additional bonus to the agent who brings in a buyer who successfully closes the deal? I personally know of one condo sale, which sat and sat and sat until it (coincidentally) sold two weeks after the offering of a significant bonus (it turned out to be one heck of a Nordstrom’s gift certificate) to the buyer’s agent.

Have I missed anything? There are some loan options like 3-2-1 mortgage buydowns that new builders can offer, as well, as offers to pay for closing costs and fees. Again, really just more permutations of price drops. In fact, when you look over this list, it’s interesting to note that the underlying basis for all of these tactics is really just a lowering of price, though some have been more successful than others in generating buzz about their home/price drops than others. In the end, simple economics, right? Lower the price until you find demand, however, if you can be a little more creative, you’ll certainly benefit from the bigger buzz.