Let's Make a Deal

Is slashing the price the only way to close a deal in this market? What it takes, say area developers, is getting creative with buyer incentives.

Take a look at what McCann Development Series II LLC put on the table recently for homebuyers at Palmetto Cove, its Fort Myers condominium community: If you buy now, the company will pay your closing costs and two years of condo association dues. McCann also had a limited-time offer to include golf club membership for a year in the price of a home.

"We’re not waiting for the market to correct itself; we’re doing something helpful now," says Marty Berger, a McCann managing member. "It’s all about worry-free living. Plus, our homes are now priced from the $160,000s."

West Bay Club has implemented a "Value Protection Program" for its luxury residential towers in Estero. With units priced from $480,000 to $2 million, the program ensures the value of your investment and guarantees that West Bay Club will either sell or buy back your residence at the full cost of the purchase price three years after closing.

"We are confident that the Southwest Florida real estate market is strong over the long term," says Carmine Visone, managing director at Lehman Brothers, owner/developer of West Bay Club. "That is why we have created such a powerful and protective guarantee for our buyers. The Value Protection Program gives peace of mind to buyers who would like to purchase their dream home now but are unsure of the timing of the market."

Kaye Homes offers a menu of enticements with its New Hope for New Homebuyers program. Potential buyers are presented with a long list of incentives and packages for Kaye’s new homes, which are priced from under $200,000 to $2 million. For instance, if you buy today and the appraisal comes in lower at time of occupancy, Kaye will credit you the difference at final close. If you lose your job though no fault of your own, your monthly mortgage payments will be made for up to nine months.

"The goal of our recent campaign is to instill buyer confidence so customers can focus on finding the right home for them," says Stuart Kaye, president of Kaye Homes. "If people are concerned about price drops or job loss, they won’t pull the trigger. We feel our New Hope for New Homebuyers program removes this layer of objection that has arisen from the current economy."

Mark Wilson, president of London Bay Homes, feels superior customer service leads to success—even in a down market. He points to his own company as proof: London Bay, a luxury homebuilder focusing on the $1 million to more than $5 million market, has earned a 93 percent referral rating from its customers, he says.

To build his service model, Wilson turned to customer-service experts at the Ritz-Carlton for advice. The result is a top-down initiative: Wilson himself routinely calls customers to build rapport and ensure satisfaction. In addition, construction supervisors regularly speak with clients to update them on the status and progress of their homes. A private "entrance" on the company’s Web site also provides current information and photos for its custom-home clients to review.

"Since we serve a very affluent and discerning client, I believe they look beyond the price of the home," says Wilson. "They want to understand the quality of the home, the design and functionality of the home, and they want the process to be very accommodating. Our comprehensive focus on the customer allows us to deliver on all of these considerations."

Wilson believes problems are best solved by eliminating them altogether. Feedback from customers is shared with the responsible staff members in an effort to identify recurring problems and then solve the root cause.

Engle Homes has come up with a combination strategy of incentives and price reductions. The company is offering to pay 3 percent of closing costs and 50 percent of the options a buyer chooses in homes at Reflection Lakes in Naples and Reflection Isles in Fort Myers. Pricing starts from $183,900 in Reflection Isles and $249,900 in Reflection Lakes.

Of course, straight discounting never loses its appeal. Engle held a half-price sale in April for its Reflection Key community in Fort Myers. The reduction took products priced from $300,000 one year ago to a range of $139,900 to $299,900. The company sold all but 20 of its 66 remaining homes within seven days of the initial offer.