Free Bentley? Are Concessions Out of Control?

So many properties are offering concessions to attract new customers and close more leases. If you ever look at your financials and are down and out over the money that you are concessing, this article will make you feel better.

Our step sisters and brothers on the for sale side of real estate have it pretty tough these days. To move a few houses in Paradise Valley, AZ, the builder is throwing in a Bentley or 50 hours on NetJets. Kind of makes “one month free” or “free 42″ plasma tv” look like a prize in a Cracker Jack box! However, the builder knows what this unique offer can do to sell these houses…it gets people talking. After all, if you are buying a five million dollar home then you can certainly buy a Bentley (order mine too, I would like a silver convertible!).

This unique offer got the attention of Associated press and therefore picked up by the Columbus Dispatch which is delivered to the door of my Mother (thanks Mom) who lives in Lancaster, Ohio, and passed on to her daughter (me) who lives 4 miles from Paradise Valley. That makes this free Bentley offer one powerful marketing tool! Let’s learn this lesson and create concessions, if needed, that are unique and memorable and meet the conditions of the market and target customer.

Builder gets creative with incentives to buy
Sunday, January 25, 2009 3:35 AM
By Alex Veiga

Associated press

Five Star Development will throw in a new Bentley or other incentives to anyone willing to buy this $4 million home. If you build it, they will come. If you want them to buy it, throw in a free $200,000 Bentley. At least that’s what an Arizona homebuilder is hoping as it tries to unload a pair of multimillion-dollar custom homes that have been languishing on the market for about a year.

The homes are in Paradise Valley, a wealthy Phoenix suburb that’s part-time home to heavy-metal pioneer Alice Cooper. Each home is selling for about $1 million less than the original price, according to Five Star Development Group.

One property, dubbed the Old-World European Villa, measures more than 7,800 square feet and is priced at almost $5 million. The second one, the Tuscan Estate, has five bedrooms, 5 1/2 baths and measures around 7,500 square feet. It’s listed at about $4 million.

To sweeten the deal, Five Star said it is offering buyers for each of the homes a 2009 Bentley Continental GT valued at around $200,000.

For buyers who don’t want the Bentley, Five Star is offering either a 50-hour card good for rides on a NetJets aircraft or an annual one-month vacation stay at a New Port Beach Marriott hotel for life.

Should a buyer prefer to knock off $200,000 from the price of the homes, that’s another option.

The glitzy incentives definitely raise the stakes in the industry. For more than a year, homebuilders have been slashing prices and offering all sorts of incentives, including upgrades on interior finishes such as countertops or flooring, as well as flat-screen televisions and cars. Last summer, one San Diego developer offered a two-for-one deal on homes.

One might expect that for a wealthy buyer, who likely could afford a Bentley on their own, the incentive on its face might not be a significant lure.

But Five Star says its offer is more about generating buzz and getting the rich folks out to open houses.

“The people that we’re speaking about can go buy anything they want; it isn’t really about that,” spokesman Brendan Mann said. “We just want people to tune into us.”