A cooling property market often means sellers have to get creative, and offering an out of the box incentive like a free car or a trip overseas could help a listing stand out from the crowd.
But are these incentives ever a good idea for buyers?
Buyers agent Cate Bakos has seen plenty of outlandish incentives offered by sellers during her career.
“I’ve seen furniture packages, large TVs, trips, VISA debit cards and so many more crazy incentives offered by developers,” Ms Bakos said.
She said that buyers need to be aware that these incentives are typically absorbed into the cost of a property.
“While most buyers can see past these things and factor them into the price, some forget that there is no such thing as a free lunch and are wooed into the purchase by the promise of free goodies,” she said.
She said that cash incentives can be a sign that the vendor is asking too much for a property, while rent guarantees can indicate that a property may underperform in future years.
“Two of the worst [incentives] that I’ve seen come in the form of direct cashbacks or subsidy. They include a cash reimbursement on settlement to the purchaser, which clearly illustrates the fact that the purchaser’s sale price was too high, and a popular one; rental guarantees,” she said.
Lenders may value a property lower if they know a cash rebate is being offered, potentially creating an issue for a purchase when it comes time to settle the purchase, she said.
She said that it was important for buyers to approach purchase incentives with a clear head.
“I always say – if it seems too good to be true, ask more questions.”
Out of the box incentives
Free Tesla
Across the ditch in New Zealand, the seller of a new seven-bedroom house in the Auckland suburb of Flat Bush is offering a brand-new Tesla Model Y for the new buyer.
The property, which includes a granny flat, was offered with an initial price guide of $NZ1.8 million ($1.66 million), according to Bloomberg, though the price guide has since been removed from the listing.
Free puppy
Earlier this year ACM’s Illawarra property reporter, Brendan Crabb, gave the scoop on a Wollongong seller offering a free groodle puppy to the successful purchaser of their property.
The owner, a breeder, got the idea after a couple of prospective purchasers had jokingly asked whether a puppy was included in the sale.
The offer came with the condition that a purchaser needed to be deemed a suitable pet owner.
Free land
Last year the Shire of Quilpie, in Outback Queensland, around 1000 kilometres west of Brisbane, offered buyers of land a $12,500 bonus payment.
With blocks of land sometimes selling for as little as $12,500, the grant meant that some buyers could purchase a block for next to nothing.
To qualify, buyers needed to build a house worth less than $750,000 and occupy it for six months.
“Depending on the cost of the land chosen, it can equate to us essentially giving land away,” Council CEO Justin Hancock told ACM at the time.
The grant – which is still available – resulted in an onslaught of enquiries from around Australia and overseas.
Land values in Quilpie have doubled to $25,000 in the year since the grant was announced, according to a recent media release from the South West Queensland Regional Organisation of Councils.
This article was first published on realestateview.com.au.
