Bargain Shopping
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As a kid, I used to look forward to Saturday mornings when I’d make the shopping rounds with my father. While there were always things he had to pick up, what he really liked to do was shop for sales. A broker, he could “unit” price in his head, long before grocery store signs assisted the math-impaired. He loved a bargain, especially on generic merchandise or bulk goods. Needless to say, we had a freezer in the garage.
Our first stop, in deference to me, was often J.J. Newberry, where I’d scour the cut-out bins for decent 10-cent records, while he bought whatever shaving cream was on sale. I learned early the meaning of a nickel sale—no, not everything was a nickel, just the second item when you bought the first at full price. Inventory liquidation sales at consumer electronics stores were, and still are, a favorite—a great opportunity to pick up a piece of stereo equipment you might never use. But you can’t wait to get home and tell your friends about the great bargain you got.
The one thing we never saw, though, was a buy-one-home-get-a-second-one-free deal, which definitely would have warranted a visit. My mother, an avid Green Stamps and coupon collector, might have come along for that ride. That’s what
Michael Crews Development is offering potential buyers in Escondido, Calif. Crews Development isn’t alone--Corazon Homes offered a similar deal in Las Vegas last year. We made repeated calls to find out the specifics on this deal. No response.
But Crews makes his intentions clear on his website—he wants to create good-old-fashioned buzz. “We are inundated every day with negative news about the housing market,” he says. “We wanted to give people something to talk about, instigate some action and unload some inventory while doing so.”
Crews is offering a 2000-square-foot, $400,000 town home for free. But first—and here’s the catch, because, of course, there’s always a catch--you need to buy a nearby estate home starting at $1.6 million on two-acre lots. That sounds like a great deal, if you’ve got $1.6 million. But, as my father might ask, who needs two homes? After all, you can only live in one place at a time.
Crews suggests that you use the second home as an investment and rent it out. Or let family members, such as a boomerang child, live there. If the town home is closer to your office, I suppose, you could live in it yourself during the week.
It’s a relief that Crews Development isn’t offering a second $1.6 million home for free. That would be desperate. Instead, the company is providing only a 20 percent discount, not far from the kind of concession the builder of a $1.6 million home in Escondido might have to offer in today’s market.
I love the idea of getting a great deal, and apparently I’m not alone, given all the auctions that builders are resorting to. A year ago, the auction was a sign of desperation. Now it’s considered a smart business move, especially when you have inventory that you need to convert to cash. Who can resist prices that start at half of a home’s market value, even if the homes never sell for that little? Of course, if prices don’t get high enough to satisfy the bank, bids won’t be accepted. There’s that catch again.
Two-for-one deals, auctions, and free giveaways have what retailers call promotional value. They attract shoppers who might not otherwise ever come out and look. And who knows, maybe they will wind up buying. If a builder were offering a free Prius with a $300,000 home in my neighborhood, I think I’d have to drive out and take a look. I could use a Prius. Not sure I need a new home, though.
The $64,000 question, of course, is whether all the promotions builders are currently running will translate into sales. They seem to distract customers from asking themselves hard questions about whether they really want to move, always an agonizing decision, and one that freebies may not influence. And they force every sales conversation to open with price.
But, hey, if they get people out to see your projects, what’s the harm?