Incentives are no stranger to Tucson

One of the nation’s housing markets that have been most affected by the slowdown is probably Arizona.

Arizona experienced tremendous growth throughout the housing boom from 2000-2005, and are now paying the price.

Homes are taking longer to sell than ever, and homeowners are going to great lengths to get their homes off the market.

Now homeowners are offering everything from a new car to gift certificates in order to get their homes sold and attract buyers.

A November 12, 2006 article by Joseph Barrios of The Arizona Daily Star, “They’re sold on creative ideas,” looks at how sellers are coming up with some interesting incentives to get their homes sold in Tucson.

“Even though Michon Javelosa's three-bedroom, two-bath home on the far East Side is newly built and never lived in, she just couldn't raise much interest from buyers after listing it for sale in May. The same was true of two other homes in the same neighborhood she later listed for sale.”

“So — borrowing a page from home builders who offer everything from free swimming pools to six months of mortgage payments — Javelosa is offering a brand new Toyota Corolla with each home at the time of closing.”

Sellers and their agents across Tucson, and every other part of the country for that matter, are offering everything under the sun to get their homes off their hands.

They are not limiting themselves to material possessions either, many are even offering discounts on the home itself or help with the mortgage payments.

“The reason: Buyers have more power than they have had in years. Mortgage rates are still historically low while Tucson's inventory of houses for sale reached an all-time high of 9,401 in August, according to the Tucson Association of Realtors Multiple Listing Service. The number was down, but just barely, to 9,336 last month.”

Despite many people becoming increasingly creative with their incentives, the one that seems to work the best is for plain old discounts on the price of the home itself.

Since it is getting harder and harder for first time homeowners to get into houses, most don’t really care about cars or trips, but would rather see the incentives in the form of cold, hard cash.

“In the resale market, by far the most common tactic is reduced prices, said Paul Olson, MLS president and broker at Vantage Point Realty. Still, incentives are more common and buyers are in a good position to ask for extras, Olson said.”

“‘I think they can consider asking for anything,’ Olson said. ‘It could be a paint job, repairs that wouldn't normally be asked for, perhaps new carpeting. You don't want to take it up over a couple of thousand dollars, normally.’ Sellers might also pay up to $5,000 in closing costs, offer an allowance to the buyer for repairs or throwing in new carpeting.”

The best advice that professionals have for sellers in this market is to not to expect to sell their home at the price levels they were at a year ago. They can offer all of the incentives they want, but if the property is priced to high, it’s not going to sell.