I think this is a fantastic marketing strategy for a developer in Chicago trying to close out the last of the townhomes in University Village.
The general plan:
- On Sept 26th he is holding a 1 day only, last chance sale.
- Units open for show at 9am and they'll start taking contracts at noon. Appts can be made to view the homes prior to this date.
- At noon, it is then a first come, first serve.
- 1st buyer gets 30% off
- 2nd buyer gets 27% off
- 3rd buyer gets 24% off
- 4th buyer gets 21% off
- 5th buyer gets 19% off
- 6th buyer gets 17% off
- 7th buyer gets 15% off
- In order to qualify, you must be pre-approved for a mortgage and prove that you have certified funds for the down payment.
Why I like this idea:
1) It creates urgency and makes it appear as if there is a large market for these last units. It makes it look like you have to act fast with this language in the ad "people in line will receive numbers..." Can you imagine having to give out numbers in today's market to see your listing? This development has been on the market for over a year, and now all of sudden there is going to be a huge rush? They sure do a great job of making it appear so!
2) Who wouldn't want to get a 15-30% discount! Sounds awesome! The reality is, you can get this discount on just about any house right now. I like to think about Car Max for this point. I know that if I go to just about any car dealership in Chicago right now, I can probably get them to come down off the price. But if I were going to buy a car, I'd probably go to Car Max- no haggling prices. You pay what is on the sticker, some people really like this idea. They never have to wonder if they would have gone lower or have to bother with the haggling.
3) By requiring pre-approval, they should be increasing the quality of the buyer to better assure an easy closing.
I looked these units up in the MLS to try to get an idea of the list to sold price to see if this was actually a good deal. There were over 250 sales, so I couldn't go thru them all. And because they are new construction, it is so hard to get a grasp on this ratio because one doesn't know what all was negotiated into the contract. I saw some that were sold right at list price, and I saw some that were actually more than 30% off. So apparently this deal has existed all along, but the advertising campaign does a great job making you think otherwise.
University Village has a good thing going here. They just need to make sure they do a good job exposing the promotion to a wide enough audience to truly create a market. (for starters, they should put it on their website....)