Coldwell Banker's new promo 'extends' home-buyers' tax credit? Not exactly
"The Buyer Bonus Sales Event will allow participating Coldwell Banker home sellers to essentially extend the benefits of the (tax) credit," said Jim Gillespie, president and CEO of Coldwell Banker LLC. "Without restrictions such as household income caps, the Coldwell Banker Buyer Bonus Sales Event allows for greater participation for all home buyers. And our sellers have a unique opportunity to allow their home to stand out from the competition in the marketplace."
What CB is doing is asking its listing clients to commit to giving 3% of the purchase price (up to $8,000) back to the buyer.
But, as even Gillespie admits, the home-buying process is one of negotiation anyway. A seller lists their home for what they think it's worth. A buyer comes in with an offer of what they are willing to pay. The two sides negotiate. And one thing invariably negotiated is the price. So if you're a buyer who wants a 3% reduction up to $8,000, why not just ask for it when you make your offer? Additionally what buyers typically do to nibble away at the purchase price is insist that the seller cover the closing costs instead of splitting them. Buyers can also ask for appliances to be included, repairs to be made, and a "credit" be given to finish the landscaping, replace the roof or remodel the outdated bathroom and bring the electrical system up to speed. (A buyer's best friend is the home inspection, which provides a laundry list of things buyers can ask for all with the endgame of trying to squeeze every last nickel out of the seller.)
But back to the CB Buyer Bonus Sales Event. What's in it for the listing client? Coldwell Banker, should you agree to participate in this sales event, will market the heck out of your home. I'm sure they were planning on doing that anyway, but there is a $1 million national media blast planned -- which is, in part, why you are reading this here now -- that includes national TV ads set to begin May 1, as well as extensive online advertising. While searching for homes online, potential buyers can check a box to find which homes are participating. There will also be a video posting to the Coldwell Banker On Location channel, highlighting the practical value of $8,000.
Oh, and participating homes will be identified by Buyer Bonus Sales Event yard sign riders. My heart be still.
"This is going to help our sellers -- all of them," said Gillespie. The sales promotion is designed to tag on to and extend the momentum caused by the federal tax credit offer of $8,000 to new home buyers and $6,500 for repeat buyers. That credit expires April 30. "This is good not just for our sellers, but the economy," Gillespie said. "We welcome copy cats."
"As the tax credit expires," he said, "Coldwell Banker Real Estate is encouraging buyers who haven't found a home yet to continue looking, while bringing a new audience of home buyers who were unable to qualify for the tax credit into the market."
A private sector solution -- how revolutionary for our times.
The CB program is voluntary to the agency's listing clients and CB wasn't venturing a guess on what percentage would sign up for it.
When asked whether sellers wouldn't just inflate their listing price to accommodate their commitment to refund 3% out of escrow, Gillespie said the marketplace will dictate sales prices and wise sellers would heed the advice of their agents to list competitively.
The program was launched after nearly half the Coldwell Banker agents surveyed by the company reported that they had worked with home buyers who would have missed out on the first home buyer tax credit in November had it not been expended. Additionally, 34% of them said the current tax credit was the primary reason their customers were actively searching for a home. And 28% said they believed the limitations of the tax credit stopped some buyers from taking advantage of it.
Under the Buyer Bonus Sales Event, buyers must sign a contract before July 31, 2010. There is no closing date deadline.