In Slow Market, South Florida Sellers Throw In Unusual Incentives To Facilitate Sales

In a slower South Florida real estate market, prospective sellers are trying anything and everything to lure buyers. Including…

• A five-day cruise
• $2,500 for furniture
• A one-year buyback guarantee

Crazy as it sounds, all of the above have been offered by Floridians in the past few months to make their properties stand out from the rest. According to the Sun-Sentinel, even that isn’t always enough. Maria and Tom Flynn put their five-bedroom Parkland property on the market a month before Hurricane Wilma struck in October. With the exception of damaged landscaping and a few missing roof tiles, the house make it through just fine.

But it’s still on the market. The couple thought they had the house sold in January, only to watch the contract fall through. Interest has been tepid since. In order to make their property more attractive, the Flynns have knocked $76,000 off their initial $975,000 listing price and will give the buyer — and the broker — one year with a personal trainer at the fitness club they own. That’s a nice $9,000 perk.

“Sometimes, people just need a little motivation,” Maria Flynn said.

The Flynns’ unusual incentives are hardly unique. In a cooling market, builders routinely offer cabinet upgrades and other freebies to new-home buyers and bonuses to agents. Sellers of existing homes have often paid buyers’ closing costs and broker bonuses in the past, but they’re taking the incentive game to another level now that the five-year boom is over.

“You have to do something to stand out in this market,” said Brian Boles, an agent for Re/Max Services in Boca Raton.

February home sales dropped more than 20 percent in Palm Beach, Broward and Miami-Dade counties, and median prices are leveling off, according to the Florida Association of Realtors. With the number of listings rising rapidly across the region, sellers simply can’t stick for-sale signs in their front yards and expect the homes to attract interest.

“Sellers definitely have to be creative,” said Debbie Anderson, the Flynns’ Coral Springs agent. “They need as much help as possible.”

Although perks get attention, some agents think they are unnecessary, even in a slow market. They say the best incentive is a fair price.

“I don’t think sellers have to offer the moon,” said Inez Fleming, a Delray Beach agent. “People will buy it if it’s properly priced.”

Real estate agent Jose Azcarate is willing to send some buyers and agents on a five-day, four-night cruise to Mexico, the Bahamas or the western Caribbean — a value of about $1,800. One prospective buyer said she could have bought any of a handful of condotel units that are for sale in one Sunny Isles Beach complex, but dealt with Azcarate because of the cruise offer. The deal ended up falling through, but the marketing succeeded.

Wes Spicer, a Delray Beach real estate developer and investor, tried another approach. He couldn’t stop wondering how to attract buyers in a market that already was cooling down, so he decided to try a particularly novel concept — a buyback guarantee. If buyers are unhappy for any reason, it’s written into the contract that Spicer will take the property back within a year at the same price, assuming it’s in the same condition.

“People are looking for the gimmick, but there is no gimmick. It’s very stale right now. I’m trying to offer a spark,” Spicer said.

A couple from Atlanta agreed to pay $550,000 for a three-bedroom property listed by Spicer in Delray. The closing is set for May 15. While they had plenty of homes from which to choose, the couple decided to deal with Spicer because of his guarantee, said their agent, Justin Van Wie.

“That’s what turned their heads,” Van Wie said. “His buyback program gives them the incentive to put themselves out there, to make the investment. There has to be some incentive for buyers to get involved in this market and feel safe.”

Holly Schiller, an investor in Weston, has been trying to sell a three-bedroom townhouse under construction in Fort Lauderdale for six months. Schiller first dropped the price by $41,000 to $599,000, but then made it even more interesting. The selling agent will receive a $2,500 bonus on top of the commission, and the buyer gets a $2,500 credit toward furniture at Robb & Stucky in Boca Raton. Plus a free design consultation, free setup and delivery.

Schiller said she doesn’t mind forfeiting $5,000 in profit if it results in a sale. Her agent, Rob Rose of Fort Lauderdale, normally discourages perks among his clients but said the furniture credit is not a bad idea.

“If a house doesn’t have a dining room or a fourth bedroom, offering a cruise isn’t going to make up for that. Honestly, it’s all about price,” he said.

It really does come down to the price. Incentives are great and all, but make sure above all else that you get the home you want at good value. Prospective Florida home loan applicants are in good position now, with plenty of properties to choose from and many sellers willing to drop their initial asking amount. That said, if a perk helps you decide between two reasonable options, there’s no harm in that!