Hardly seems headline worthy - a brokerage asking their sellers to cut their prices? What else is new? But this latest Coldwell Banker promotion, tied to the expiration of the homebuyer tax credit, is one of the dumbest real estate marketing ideas I've heard of. It has Corporate Marketing Program written all over it.
Basically, they're suggesting to their sellers that they should offer a 3% credit at closing of up to $8,000 to make up for the expiration of the tax credit. In exchange, Coldwell Banker will include the subject properties in their advertising.
Aside from the fact that there is nothing promotion worthy about a seller cutting their price - happens all the time - the biggest problem with this promotion is that the vast majority of buyers will never know about it. The reason is that most buyers search for properties online - either through the MLS or some other real estate search engine tied to the MLS. These online venues flag price reductions. Buyers using the MLS even get an automated email with a list of price reductions. Consequently, the price reduction is an extremely powerful attention grabber and usually directly results in an increase in showing activity.
However, this closing credit will not go into the MLS as a price reduction. Instead, it will end up somewhere in the remarks section. In fact, because the remarks section has a rather small character limit that is usually filled with descriptive information, these credits may even end up in the agent remarks section that buyers can't see. So basically sellers are being asked to pay up to $8,000 for some additional advertising exposure. I wonder how many of the participating home sellers understand all this?
I had heard that this promotion was coming. A Coldwell Banker agent told me about it a few weeks ago. She didn't seem impressed. I bet the sellers won't be either. Can you imagine trying to convince a savvy seller to participate?