Agents going to extremes to get real estate moving
The open house of boom times yields to full-house events.
When Adriana Loschner really needs to sell a house, her secret weapons are chocolate-covered strawberries and champagne.
Maribeth Boisvert will hire a local chef and a wine connoisseur and ask them to show off their culinary skills in the homeowner's kitchen.
Both real estate professionals are willing to do whatever it takes to sell a client's house. In this shaky economic climate, it doesn't hurt to have a local band, prizes and parties as well, to draw potential buyers.
"In order to make money, you have to spend money," said Loschner, a real estate agent in Tucson, Ariz. "You need to be thinking outside the box - that's what the market calls for."
Philip Rushing, an adjunct professor of finance at the University of Illinois, agreed, saying, "Desperate times call for desperate measures."
Property is starting to move, Rushing noted, but it may take six more months for the market to recover. "The problem is that many sellers are not in a position to wait for the recovery."
Innovative approaches to selling real estate have acquired a nickname: extreme open houses. These days, it's not unusual for sellers to offer luxury trips along with the purchase of their homes. Others have opened their doors to invite prospective buyers to party at their expense.
Christian Jorgensen, owner and chef at CJ's Deli & Diner in Maui, Hawaii, said he recently hosted a live omelet station with full breakfast and champagne at a $20 million estate.
Entertaining in a home that's for sale has another appeal besides offering free food, brokers said.
"People already know where the closets and bathrooms are," said Boisvert, a sales director at Thorndike Development in Norton, Mass. "Now, you really want to simulate their experience in the home."
As a seller since the mid-1980s, Boisvert has seen real estate prices fluctuate and said that creating a visual example of what life in that home might be like has become necessary. With so much competition, it helps when potential buyers can picture themselves living in a certain community, entertaining in their new home, and using the home's appliances.
During the last year, Loschner said, she has found it necessary to step up her approach to sell homes in several affluent areas of Tucson. Instead of opening the doors to everyone, she delivers her open-house invitations to country-club members or customers of a particular bank.
Recently, she was trying to sell a house that featured an exotic cactus landscape. She learned the names of various cactus species, threw a catered party at the house, and invited horticulture enthusiasts who might be interested in making the buy.
Her efforts have resulted in the sale of more than six of 10 homes, Loschner said - the investment for an extreme open house comes back tenfold because she constantly attracts more clients.
Boisvert said that if she spends $10,000 on one home event and the property is sold, the reward is worth it.
About two years ago, Boisvert said, she couldn't drum up traffic for a million-dollar property she was trying to sell in Massachusetts. One day, she noticed a painting of the house hanging on the owners' wall. She made copies of the painting on open-house invitations, targeting buyers from nearby neighborhoods looking to "buy up."
Her open house developed into an extravaganza. The house featured a state-of-the-art kitchen, so Boisvert hired a chef to demonstrate cooking techniques using the owners' gear. She also hired a chocolate company to make confections for prospective buyers.
Such events may get people who are not even thinking of moving interested in a new community or development, Boisvert said: "A lot of return investors will remember the parties."
But for some, the outcome isn't worth the effort.
Suzy Anderson, an agent at Coldwell Banker Brokers in Napa Valley, Calif., said she tried to introduce extreme open houses, such as parties, into her market, but homeowners wouldn't go for it. The risk of property damage is often a concern, as is the chance that 500 people will happily accept the party invitation without having any intention of making an offer.
As a homeowner trying to sell her million-dollar historic home in Manchester, Vt., Marion Haines is frustrated with the real estate agents in her town, who she said have been reluctant to explore creative marketing tactics. This summer, she plans to distribute brochures in neighboring towns and host her own open houses.
Despite her discontent, she doubts an extreme open house would work for her.
"I think it's questionable because my area is so small," Haines said of Manchester, which has a population of 2,000. "The costs of something like that would be a big consideration."