Dubai: Forget the five per cent commission. A real estate agent has now been offered a 2008 Cadillac Escalade with just 11,000km on the clock as an incentive to sell an apartment on the Palm Jumeirah. Though all agents demand from clients these days is a well thought-out, competitive price, a few sellers are offering incentives to get their property in the forefront of agents' minds.
"Some sellers and landlords are now beginning to offer incentives to agents in the form of gifts like a car or paying extra commission, etc. For instance, we have a fully furnished three-bedroom apartment on the Palm Jumeirah, with a garden and partial sea view. The selling price is Dh1,850,000 and the agent gets a Cadillac upon clinching the sale," says Mario Volpi, sales manager, PowerHouse Properties.
However, even with such offers, properties can be sold or let only if they are well-priced. "These incentives definitely focus the agent's mind to achieve a sale. But, these properties are not necessarily being sold or let for more than the market rate," Mario cautions. Only competitively priced units are moving fast in the market. "It is not wise to offer agents incentives to get higher prices in a buyers' market for the simple reason that there is so much similar stock out in the market. If your property is priced too high, it simply will not attract any serious attention, no matter how much you have promised your agent. Forget about the incentives, lower your price and get rid of the property. You may not make as much as you had hoped for but you will stop the haemorrhaging. The agent will be happy with a sale... period," believes Tom Bunker, investment sales consultant, Better Homes.
Holidays for selling units
Circa 2008, developers bestowed gifts such as cars, airline tickets and holidays upon agents for selling certain units or entire floors, etc.
Meanwhile, buyers seeking a slice of the Dubai property market's dream run were willing to offer extra commission to real estate agents if they secured units below market price. Sellers too never had to dangle incentives to realtors since property as an asset class enjoyed unprecedented demand. But, good times rarely last long. Today, apart from competitive rentals, landlords are also bundling incentives such as rent-free options and utility payments to lure tenants.
"Landlords are willing to pay for furnishing such as curtains, white goods, etc. In terms of sales, we have a seller that offered a Maserati car if he achieved a certain price. Otherwise, it is all about the right price," adds Mario. Certain sellers are even opting to cover the service fees for the first year.
Meanwhile, most sellers offering incentives are under financial pressure to sell.
"Today, the bulk of sellers are investors who have come to grips with the fact that their property is unlikely to increase in value any time soon. These investors would rather put their money to work in more lucrative investments. Others are those who have cash flow problems and are now looking to liquidate their investments quickly," Tom points out.
- Sellers are offering incentives to focus agents' minds on their units
- A few sellers are offering to cover the service charges for the first year