Trouble selling your home? Try giving out chocolate-covered strawberries
When Adriana Loschner really needs to sell a home, her secret weapons are chocolate-covered strawberries and Champagne. Maribeth Boisvert will hire a local chef and wine connoisseur and ask them to show off their culinary skills in the owner’s kitchen.
Both real-estate professionals are willing to do whatever it takes to sell a client’s home. In this shaky economic climate, it doesn’t hurt to have wine, a local band, prizes and parties to draw potential buyers.
“In order to make money, you have to spend money,” said Loschner, a real estate agent at Long Realtor Company in Tucson, Ariz. “You need to be thinking outside the box--that’s what the market calls for.”
According to the National Association of Realtors, existing home sales across the United States have fallen from 7,076,000 in 2005 to 5,030,000 in February 2008. Meanwhile, the average national sales price of homes has dropped $23,700 since 2005.
“Desperate times call for desperate measures,” said Dr. Philip Rushing, an adjunct professor of finance at the University of Illinois. He said that property is starting to move, but it may take another six months for the market to recover. “The problem is that many sellers are not in a position to wait for the recovery,” he said.
In this frail market, taking a more innovative approach to selling property has become so popular, it’s even acquired a nickname: extreme open houses. These days it’s not unusual for sellers to offer luxury trips along with the purchase of their home. Others have opened their doors to invite prospective buyers to party at their expense.
Christian Jorgensen, the owner and chef at CJ’s Deli & Diner in Maui, Hawaii, said he catered more than 30 open house events last year. He recently hosted a live omelet station with full breakfast and Champagne at a $20 million estate.
Entertaining in the home has another appeal besides offering free food, brokers say.
“People already know where the closets and bathrooms are,” said Boisvert, a sales director at Thorndike Development in Norton, Mass. “Now you really want to simulate their experience in the home.”
As a seller since the mid-1980s, Boisvert has seen real-estate prices fluctuate and says that the idea of creating a visual example of what life in that home might be like has become necessary. With so much competition in the housing market, it helps when buyers can picture themselves living in a certain community, entertaining in their new home, and using the home’s appliances.
Over the past year, Loschner has found a need to step up her sales approach in order to sell homes in several affluent areas of Tucson. Instead of opening a home to everyone and anyone embarking on a Sunday drive around town, she delivers her open house invitations to country club members or customers of a particular bank.
Recently she was trying to sell a home that featured an exotic cactus landscape. She learned all of the names for various cactus plant species, threw a catered party at the house, and invited horticulture enthusiasts who might be interested in making the buy.
Her efforts have resulted in the selling of just over 6 out of 10 homes, according to Loschner. She says the investment for an extreme open house comes back tenfold because she constantly attracts more clients.
Boisvert agrees with the approach and says that if she spends $10,000 on one home event and the property is sold, the reward is worth it.
About two years ago, Boisvert couldn’t drum up traffic for a million-dollar property that she was trying to sell in Massachusetts. One day, she noticed a painting of the house hanging on the owners’ wall that they commissioned an artist to create for them. She made copies of the painting on open house invitations, targeting buyers from nearby neighborhoods looking to “buy up.”
Her open house event developed into an extravaganza. The house featured a state-of-the-art kitchen, so Boisvert hired a chef to demonstrate cooking techniques using the owners’ gear. She also hired a chocolate company to make confections for potential buyers.
Hosting an event may get people who are not even thinking of moving interested in a new community or development, Boisvert said. “A lot of return investors will remember the parties.”
But for some sellers, the outcome is not worth the effort.
Suzy Anderson, an agent at Coldwell Banker Brokers in Napa Valley, Calif., said she tried to introduce extreme open houses, like parties, into her market but homeowners wouldn’t go for it. The risk of property damage is often a concern, as is the chance that 500 people will happily accept the party invitation without having any intention of making an offer.
As a homeowner currently trying to sell her million-dollar historic home in Vermont, Marion Haines is frustrated with the real-estate agents in her small town, who she said have been reluctant to explore creative marketing tactics to help sell her house. This summer she plans to distribute brochures in neighboring towns and host her own open houses. Despite her discontent, she doubts an extreme open house would work for her.
“I think it’s questionable because my area is so small,” Haines said of Manchester, Vt., which has a population of 2000. “The costs of something like that would be a big consideration.”
Despite the grim news about the sub-prime loan crisis and devastating foreclosures, Denise Donlon, a sales representative with Taylor Warner Realty in Garden City, N.Y., said that property is still selling is many areas.
“We were so far ahead a few years ago,” she said, referring to the price of property. “Now that the market has leveled off, it’s where it should be. Extreme methods sound like fun, but are not always necessary to sell a property.”