by David Chapman
Staff Writer
Want a car?
Does a cruise sound like something you’d be interested in?
How about a gift card to a top-ranked steak house, or a shopping spree?
All of these perks can be had, on top of a normal income and commission, for selling the right home for the right builder.
In a time when the temperature is rising but the market remains cool, builders are always looking for ways to capture the attention ... and the business of new clients. Though Northeast Florida is better off than many places when it comes to the nationwide housing slump, the effects are still felt across the board by all members of the industry.
Enter incentives. They’ve always been around but, in times of struggle, sometimes the right idea and promotion can peak interest by both homebuyers and Realtors and increase the number of contracts that are signed.
“Absolutely, we offer incentives,” said Sheryl Vaughn of Ryland Homes. “Everything that can help, we try.”
Local builders also use incentives to try and land a marketing and business advantage.
“There is a difference in national and local builders,” said Mark Downing, president of CornerStone Homes, “but we do offer incentives and, from our perspective, each community is a separate marketplace.”
Like CornerStone, some builders offer incentives that tailor to an individual community while others have perks that blanket all their developments.
For homebuyers, one of the main forms of incentives comes in monetary savings. From discounted prices to builders handling all closing costs to better interest rates, buyers have more options, mainly through financing, and often when the buyer goes through a builder’s preferred lender.
“We try to cater to each individual buyer’s needs and wants,” said Amber Williams, sales and marketing director of Standard Pacific Homes, “because what’s right for one buyer isn’t necessarily right for another.”
Another common form of builder incentives for buyers is giving upgrades.
For example, CornerStone’s Austin Park at Nocatee offers a menu, literally, of customizable packages for homebuyers. With up to $15,000 to work with, homebuyers select an option from each of the five-course “meal” options. An “appetizer” includes options such as half-off lot premiums or third car garage, while an “entree” might be a 40-inch LCD television or granite counter tops in the owner’s bathroom. Other builders also offer similar amounts to go toward upgrades.
Homebuyers aren’t the only ones benefiting from incentives. Realtors can also take advantage of the system’s perks and, while not usually as costly as the offers to homebuyers, the offers are creative and often extravagant.
Vacation packages are a common theme among Realtor programs.
From a three-day, two-night stay at the Biltmore Hotel in Coral Gables (Arthur Rutenburg Homes/Plantation Housing Corp.) to a five-day cruise on the Royal Caribbean (Standard Pacific Homes), chances for trips such as these can be an enticing allure and bonus for Realtors to sell a builders’ home.
“So far it’s (the incentive program) been greatly received by homeowners and Realtors,” said Victor L. Buscaino Jr., president of Plantation Housing Corp. and franchiser of Arthur Rutenberg Homes on Amelia Island. On top of Plantation Housing Corp.’s Biltmore trip opportunity for Realtors, homebuyers incentives include shutters and a $15,000 credit toward a swimming pool.
Trips aren’t the only eye-opening perk.
SRG Homes offers a Kurrent electric car for three closings and home buyers get a car with the purchase of any new SRG home. The street legal and environmentally-friendly car is valued from $9,800 to $13,800 and will soon come in 10 different colors.
“In Springfield, we have a lot of people who use golf carts for neighborhood events,” said Jennifer Holbrook, SRG’s development vice president, “so I did the research on it and think the cars can be of great value to areas like that.”
The car, though, is not simply a toy and SRG president Mack Bissette believes in the vehicles value to downtown neighborhoods.
“They’re also very culturally cool and eco-sensitive,” said Bissette. “The Kurrent is the ultimate home accessory.”
One Realtor is attempting to earn one and is well on his way.
“Oh, sure,” said Randy Jackson of Lifestyles Realtors. “I tell every person that comes in. Sure, it’d benefit me, but it also benefits the buyer.”
Jackson has been a Realtor for four years and said he has seen an increase in incentives over the past few years when dealing with a down market. He has already been a part of earning an incentive, receiving a mall gift card for a previous sale.
“It’s all about supply and demand,” said Jackson. “Builders are doing it now but the incentives will go down once the market perks up to a seller’s market.”
Coming up with an idea for an incentive for Realtors and homebuyers is frequently a group effort.
“Generally it’s a collective idea,” said Wayne Scheiner, senior vice president of Trident Realty at the Water’s Edge condominiums. Trident is offering home buyers $25,000 toward upgrades for homebuyers and a $5,000 package for Realtors.
Sometimes the ideas come everyone in the company.
“It’s a group of folks,” said Downing, “between sales, support staff, myself and marketing. We work together.”
While incentives are an effective marketing tool, the effectiveness on inventory varies.
“It’s hard to say if it’s been effective,” said Downing. “It’s a tough market but we’ve seen some gradual progress.”
Others are more optimistic with their results.
“They are always well received and provide an increased interest in our homes,” said Williams.
“Our last incentive program was well received,” said Vaughn. Ryland had an upgraded kitchen feature but now offers a $500 Pottery Barn gift card to homeowners as well as $20,000 in upgrade options at its design center. Realtors also receive a Pottery Barn $500 gift card per closing.
With varying results at times, the cost versus effectiveness question is one that was overwhelmingly the same.
“Let’s put it this way,” said Buscaino. “If you don’t make sales, you won’t be in business. Of course it hurts the bottom line, but it is worth it.”
Others agreed with the sentiment.
“It hurts,” said Downing. “It’s a decision you make. Should we still do it? If we don’t make sales, we won’t stay in business.”
Some see it as a part of costs.
“It never costs,” said Scheiner, “you have to do things at the appropriate time in the marketplace.”
In the end though, if the incentives generate sales, even if they come from the bottom line, a closing is better than nothing. If incentives bridge the gap, then so be it.
“I have seen they do help,” said Jackson, “but in the end there really is no free lunch.”