JUDY MOORE
Price is the key
At a time when the number of for-sale homes has risen dramatically across the Bay State, real estate agents and home sellers are offering a variety of incentives to entice buyers – from a year’s worth of free home heating oil to thousands of dollars for decorating expenses.
Some listing agents are even offering higher commission splits to Realtors who bring buyers to the closing table.
“When you’re in the marketplace today as a seller or a listing agent you are really looking for a competitive edge to help you market the property and the get the property sold,” said Nelson Zide, senior vice president of the Whitinsville-based ERA Key Realty Services.
According to local Realtors, there hasn’t been an enormous increase in incentive offerings this year, but they acknowledge that there are some real estate agents who are taking creative approaches to marketing. Incentives aren’t a new trend, but as the market shifts and the supply of for-sale homes grows and properties take longer to sell, they become prevalent, according to industry observers.
Zide has tried various promotions this year to draw the attention of homebuyers and their agents, including offering free landscaping and snow plowing services, gift certificates for furniture and a year’s worth of free home heating fuel.
For one home he has listed for sale in Framingham for $500,000, Zide even convinced the buyer to offer a $10,000 decorating allowance. The home, which has been on the market since the beginning of the year, has attracted attention – including two purchase offers that ultimately fell through because, according to Zide, the “buyers got cold feet.”
Zide has opted to offer those types of incentives, instead of price cuts, because he said reducing an asking price by $10,000 or $20,000 won’t attract a different buyer pool.
“If the home is in the right price range, you have to ask yourself: Is this the little extra that might get a buyer’s agent to bring a client there?” he said.
“There are definitely a few agents who are trying some of these different incentives, but there aren’t enough of them,” Zide added. “There are too many agents who don’t realize that reducing a price by $2,000 or $3,000 is not going to do anything.”
The top-performing agent has tried another tactic – offering higher commission splits than he normally would to buyers’ agents. Three of Zide’s listings that are pending sale – a single-family home in Natick and a condominium and home in Framingham – all had higher commission offerings.
Zide said he isn’t sure whether the higher commission split had anything to do with the pending sales, but he noted that the Framingham condo is located in a complex where two other for-sale units – similar in style and size – are still on the market.
“My experience is there’s never any one thing that’s going to make the sale. If you have a lot of a bunch of stuff, that may make the difference,” he said.
‘Healthier Splits’
South Shore Realtor David S. Drinkwater said he is seeing “healthier compensation splits” but hasn’t noticed a big jump in bonus offerings to agents in Scituate, Norwell, Cohasset and the other communities he serves.
However, Drinkwater said he has seen some other types of notable promotions. In Scituate, for example, the owner of a 3,200-square-foot home that has been available for sale for nearly 10 months is willing to throw in a 24-foot 2001 Grady-White boat for anyone willing to shell out the $1.8 million asking price.
Drinkwater questions the effectiveness of providing such perks. Some buyers might find a bonus such as a free boat attractive, while others might wonder why a home seller is trying to attach an incentive to the property, he explained.
“I’m not sure how effective that is in terms of promoting the house,” said Drinkwater, president of Grand Gables Realty Group in Scituate.
In the affluent suburbs west of Boston, such as Lexington, Realtor Judy Moore hasn’t seen a tremendous jump in the number of bonuses and perks being offered by sellers and their agents – even though the number of homes listed for sale has nearly doubled.
Moore, of RE/MAX Premier Properties in Lexington, said she remembers that a slew of promotions and incentives were offered during the real estate downturn in the late 1980s and early 1990s. One real estate firm was giving away free electronics, recalled Moore.
“But we’re not seeing those kinds of things now,” she said.
Moore said some new-home builders in the region are offering freebies like plasma televisions and a year’s worth of complimentary security services, and she has also seen condo sellers who are offering to pay the first year’s condo association fees.
Like Drinkwater and many other agents, Moore agreed that pricing is one of the most critical aspects of successfully marketing a property. Currently, Moore said she is focusing on reducing prices to attract buyers.
“It seems that price is the first thing that the buyer will look at,” she said.
And Moore is also advising sellers to be more flexible and leave some negotiating room if their property is inspected. Home sellers – realizing that there are many more homes on the market – are more willing to provide a credit or make an improvement following a home inspection in order to keep the buyer from walking away from the transaction, Moore said.
Drinkwater acknowledges that there are many more properties available for sale today than there were in recent years, but he says some homes are still moving quickly – particularly if they are “appropriately designed” for baby boomers and empty nesters.
What’s becoming most clear in today’s real estate market, according to Drinkwater, is that consumers need the expertise of a Realtor.
“This is the time you need experienced professionals helping you promote your property in the best way you can,” he said.
