After trying for more than a year to sell his home with no luck, a Florida man made what some car aficionados might consider a shocking decision: He sweetened the pot by throwing in his classic Rolls-Royce free.
Jim Benson, an 81-year-old real estate investor who bears a striking resemblance to Abraham Lincoln, bought his 1967 Silver Shadow more than three decades ago while visiting a friend in England. Now, he says he's ready to give it up, along with the four-story, downtown Orlando house he put on the market for $699,000.
"I'm trying, at my age, to downsize both in my life and my activities," Benson said.
Benson's son, Tom, is helping his father with the sale.
"We know with the level of competition out there, you have to be creative in trying to market the house," Tom Benson said. "That's what we tried to do with pairing the classic Rolls-Royce with a classic home."
Such creativity isn't unique to the Bensons. Although the once-free-falling U.S. housing market has shown new signs of life recently -- the number of homes under contract for sale in April was up 6.7 percent from the month before, according to the National Association of Realtors -- the ease with which homes are sold continues to vary from region to region. It's often still a buyer's market, leaving sellers scrambling to find new ways to entice buyers, which can entail giving away big-ticket items like cars or even boats.
Smaller-scale perks include pre-paid homeowner association dues, free parking, free flat-screen televisions or new furniture. Among home builders, in particular, such incentives have become more common as they struggle to quickly move units off a crowded market.
Unlike many individual home sellers, the builders stand to lose more money the longer their homes stay on the market, said Scott Nagel, the vice president of real estate operations for the online realty company Redfin.
"Most of the time, they've got their costs sunk," he said. "They're making payments on the construction loans that they used to build those condos and those homes. Every month they're not selling, it's another month it's eating into their profit margin."
Fewer Costs, More Complications?
The incentives offered by developer Urban Seattle LLC helped the company sell 35 of the 36 units units in Mode, a 10-month-old Seattle condominium complex, said Rian Cool, the condo's real estate agent. The developer has offered buyers free custom furniture packages valued between $3,000 and $8,000. The packages, which include everything from leather couches to bedroom furniture, are arranged by an interior designer. Like many other sellers these days, Urban Seattle also covers buyers' closing costs.
It's all about "minimizing all the costs out of their pocket," Cool said. At a time when many people are concerned about job security, he said, benefits like these "get people off the fence."
For buyers, however, getting all the perks offered with a home isn't always as simple as signing along the dotted line. Seller incentives can sometimes complicate buyers' efforts to secure financing, said Dianne Patton, a sales manager and broker at Coldwell Banker Grassroots Realty in Grass Valley, Calif.
An incentive like a car, Patton said, may lead some lenders to set lower limits on a loan. For instance, if a lender sees that a $50,000 car was included in the purchase of a $500,000 home, the lender could choose to appraise the home for only $450,000 and cap the size of the corresponding home loan.
"They want to make sure that the value's there, If someone's throwing in something as huge as a Rolls-Royce, they have to assume that the house value isn't going to stand alone," Patton said.
The complications stemming from such a situation, Patton said, ultimately led a homeowner in her area to scuttle plans to offer a Ford Mustang as part of his home sale. The homeowner eventually succeeded in selling his property, she said, but it meant dropping his asking price.
Benson's real estate agent, Margaret Barnes, said she's aware that the Rolls-Royce -- which Benson estimates is worth between $20,000 and $50,000 -- could make the home sale more complicated down the road. Whoever does buy the home, she said, may decide not to take the Rolls with it.
For now, she said, the car offer is paying off; more people are calling to ask about the house, which is located in Orlando's historic Eola Heights neighborhood.
"The philosophy is that it's going to bring attention," she said, "and bring some people to take a look who might not have otherwise."