The real-estate market has been giving off conflicting signs for months. That’s making anybody who has a property to sell eager to get rid of it, just in case the signals go from confusing to bad.
Most expert observers agree that the worst-case scenario-the bottom dropping completely out of the local housing market-is not going to happen in Chicago. Still, nobody wants to be the one who sent up a signal flare by cutting prices-which is why builders and some individuals selling their own homes have been offering incentives to buyers. Throw something in without raising the price and you have effectively discounted the price without asking for less.
“We’re seeing incentives galore,” says Jim Merrion, the northern Illinois regional director for RE/MAX. Which means that if you are shopping for a home this spring, you might have an opportunity to snag some freebies. A condo builder might throw in a garage space with each condo purchased. A builder of single-family homes might sod the whole lot rather than just out front. And a family selling its own home might offer a buyer cash back for a quick closing, or offer to leave the plasma screen TV in the family room. There have even been wild tales circulating of sellers offering a free car to potential buyers-or a trip to the Caribbean.
True or not, those types of outlandishly tantalizing offers may not be the best incentives to move a home. Instead, take a cue from developers, who have been putting forward offers of enhanced financing terms, kitchen upgrades, and free laundry appliances. “The best incentives are the ones that are closest to the buying process,” says Steve Hovany, the president of Strategy Planning Associates, a Schaumburg-based consultant to housing developers. “They’re the ones that make people decide to buy.”
According to both Hovany and Merrion, buyers shouldn’t hesitate to ask for incentives. These days, builders expect most buyers to come in looking for goodies, Merrion says, and individual sellers may be receptive as well. “If you offer them a good price and good terms, and then say, ‘Hey, can you also throw in the Weber Genesis [grill] I saw out back?’ you have a reasonable chance of getting it this year,” Merrion says. “You wouldn’t have last year.”