Not Even for a Car?
Friday, May 23, 2008
Mark and Elaine Hendricks recently offered their 2000 Mustang convertible as a freebie to anyone who would buy their Woodbridge house, but even that failed to distinguish it from the roughly 700 other homes for sale in their Zip code.
"We wanted to try something unusual, thinking maybe it might be crazy enough to bring somebody in," Mark Hendricks said. "But with so many houses on the market, a free car doesn't do the trick."
Frustrated home sellers are adopting extreme tactics, with mixed results, as they try to stand out in a crowded market. They're giving away prizes, sweetening commissions for agents, and trying to auction or raffle off their homes when all else fails.
These measures are another symptom of the fallout from the subprime mortgage crisis. In many cases, sellers are struggling to compete with the record supply of foreclosed homes listed at rock-bottom prices. In Prince William County, for instance, the number of single-family houses listed for sale for less than $200,000 shot up 15,000 percent last month compared with a year earlier -- from 5 to 768. There was a 66 percent increase in listings under $500,000.
That's what the Hendricks family was up against when they tried to give away their Mustang. At the time, at least 30 homes were for sale within a mile of their house, they said. One similar to theirs was listed for $199,000. They were asking $375,000.
"It was probably an extreme fixer-upper, and our house is not," Mark Hendricks said. "But we had to do something. So we suggested the car idea to our agent. Why not try?"
The car failed to stir buyer interest, and they gave up on the idea after three weeks. Instead, they slashed their price a second time to $339,000.
So far, no offers, no foot traffic.
Many real estate agents say flashy giveaways are usually ineffective, and in fact, may complicate the appraisal process or give the impression that a home's base price is inflated to make up for whatever perk is offered.
The most powerful draw in a down market is setting the right price, they say, keeping in mind that the value of a home is determined by what else people can buy for the same price when they're ready to spend.
"Price is king," said Mike Schmidle, a real estate agent at Real Estate by Owner in Arlington. "Sometimes you just have to reduce it until it hurts and then some."
Al and Margaret Conte did that. They cut the $600,000 asking price on their Centreville home three times before accepting a $500,000 offer this week.