One San Diego developer says anyone willing to buy one of his million-dollar luxury homes can .In San Diego, where home sales have dropped an unheard-of 23 percent in the past year, these kinds of gimmicks are not uncommon. In fact, homeowners and developers all over the country are resorting to all sorts of wacky tactics to unload their unwanted homes in today’s down market. Here are a few examples of the giveaways we’re seeing:
- A condo developer in Arizona held an open house with a door prize. The prize was a five-day Carnival Cruise!
- A developer in Cleveland Heights is offering a Smart car to any buyer who purchases a new $700,000 unit in his development.
If you are in the position of being able to buy in this market, here are a few things you could ask for that will save you some money:
- Prepaid taxes for a year.
- A year of mortgage payments (or at least until you sell your old house).
- A below-market mortgage rate (a difference of one point on a $300,000 mortgage could save you up to $200 each month).
- Free closing costs (which can add up to $10,000 or more).
- A guaranteed lease-back after you close on the property, where the developer puts a tenant in the unit for one year.
And if you fancy something a bit more frivolous, why not ask for one of the following (all are examples of things that have been given away in the past):
- A free swimming pool.
- Top-of-the-line appliances and countertops.
- A houseful of new furnishings.
- A new covered patio.
- A finished basement.
- A free Toyota Prius with an eco-friendly "green home."
- A new high-end flat panel TV.
If you decide to go this route and negotiate hard, here are a few tips to get you the best deal on a new house:
- Ask for extras instead of a price cut. Builders hate slashing prices, as it angers the other homeowners who paid the full price.
- Offer to close quickly. Builders love to hear the magic words “quick sale,” “no contingencies” and “I’ve got my financing in place.”
- Only bid on an already finished home. Builders need to get their completed homes off their books to keep the bank happy.
- Ask “Which house can you give me the best deal on?”
- Check the builder’s Web site to see how many homes they still have for sale. Big builders always have Web sites. The more homes a builder has to unload, the better deal you’ll get.
- Don’t set the closing date until your house is finished.
Here are a few examples of what some desperate homeowners are doing to sell their houses:
- Some are giving money-back guarantees for the full purchase price of the house once the seller dies.
- A homeowner in Florida is allowing potential buyers to spend a night in their property to “test it out.”
- One homeowner offered a potential buyer a year of free pizza and a subscription to a beer-of-the-month club.
- One seaside homeowner offered a free piggyback ride for buyers who didn’t like the prospect of having to climb so many stairs.
If you’re having trouble selling your house, and want to try something creative, why not offer free snowplowing in the winter, or pool maintenance in the summer? How about offering a year of free heating oil or a free cleaning service for a year? You could pay for a personal chef, free massages, or even offer to send the buyer on a weekend trip to Paris and put them up in the Ritz; the limit is your imagination. Remember, compared to the principle cost of the house, these incentives are all pretty cheap.