Incentive: A TV Special Offer
Real estate sales associate Julie Nearing bought a pre-foreclosure house from her client and gave it a complete rehab. But when it still wouldn't sell, she decided to throw in a big incentive to draw interest.
April 1, 2009
Location: East Hartford, Conn.
Square footage: 1,244
Lot size: about ¼ acre
Year built: 1910
Extras: Large side yard, new kitchen, and ceramic tile floors.
The challenge: Julie Nearing, a part-time sales associate with SSG Real Estate LLC in Glastonbury, Conn., bought the pre-foreclosure home from the seller in January 2008 for $110,000 and gave it a complete makeover.
With a new boiler, ceramic tile floors, and new kitchen, bathrooms, carpet and paint, the 1900s two-story charmer was like a contemporary home in an old shell.
But even with a new look, the same problems that hampered interest previously were still keeping buyers away. The single-lane road leading up to the home provided tight quarters for local residents and little on-street parking proved to be an added deterrent. The previous owners had to park on the grass in front of the house.
Despite a withering market, Nearing remained positive. She listed the home at $164,900 and waited. Nothing. So she dropped the price to $159,000. Still zero activity or interest.
By summer, Nearing—who works full time as art therapist in a Connecticut juvenile prison and residential facility—was getting nervous about carrying the costs of the East Hartford house, as well as her primary residence, through the holiday season.
“I didn’t want to get into winter with no sale," she says. "I knew I needed to find a creative solution."
How did you overcome the challenge?
NEARING: As an art therapist in a juvenile prison, I often hear the men I work with talk about big screen TVs with such enamor. I realized that like these guys I work with, a lot of home owners want the big TV but don’t always have money for it or can’t bring themselves to buy one. So I decided to offer a big-screen incentive and changed my advertising to reflect this by putting “free big-screen TV" in the remarks section of the listing.
I didn’t want to reduce the price another $5,000, and this was a good way to test the market.
I decided that if it didn’t work, I could always drop the price later on. But I didn’t have to. Within about a week of the big-screen incentive, two offers came within minutes of each other and a bidding war ensued.
Ultimately, the credit ended up being a $1,000 gift card to the buyers’ store of choice. But the couple who bought the home did buy a big screen TV. It’s an expensive item. So to get a free one is a big deal
How long did the sale take? What was the selling price?
NEARING: While negotiating the first offer, which was on the low side, another sales associate called with a second offer. I told them I had another offer on the table, and they came back quickly with $160,000, which was $1,000 over the list price.
When did you get the initial listing?
NEARING: A lot of sales associates I knew had been interested in rehabbing homes. This property came to me as a pre-foreclosure referral from another agent in January 2008.
How much did you spend marketing the property?
How many times did you show the property?
NEARING: I personally showed it about three times, but other agents showed it about five times.
Can you tell me about the buyer?
NEARING: I sold it to a young couple, first-time homebuyers with a son. They loved that it was move-in ready. The wife loved that it was clean and spotless, and the husband loved the idea that he wouldn’t have to watch the game on a 32-inch TV. It was a win-win.
What do you attribute to closing the deal?
NEARING: The fact that the home was completely renovated helped, but I think my decision to advertise the listing with a free big screen TV proved to be the biggest incentive.
When you give new owners—who in many cases can barely afford new furniture—the opportunity to have a shiny new toy without paying extra for it, I think it really provides an added incentive to close the deal.
Why did you get started in real estate?
NEARING: I got my real estate license in January 2008 because I wanted to rehab houses and thought getting my license would give me good access to properties and the MLS. Little by little, mainly through word of mouth, people started asking me to help them find homes and investment properties.
What lessons did you learn from this transaction?
NEARING: I think it helped me to understand that in this particular market, you need to provide an incentive—and it doesn’t have to be complicated. My solution was simple, but it made a big difference in a slow market.
Also, I learned that listings need to be buyer ready, because it takes just a few seconds for a buyer to decide if they are interested or not.
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SSG Real Estate LLC