Back when I was in college, a good friend of mine owned a large Michigan sod farm with his father – acres and acres of putting green quality sod. They wanted to upgrade their big tractor so I joined him on his visit to the local tractor dealership – International Harvester (my parents tell me I am a distant – really distant – relative of John Deere).
The tractor they were looking at included air conditioning and a surround sound stereo system. It was impressive. The salesman said that if they bought the tractor that month the dealership would throw in an International Harvester truck.
My friend’s comment to me under his breath was something along the lines of “looks like we are actually buying the truck too.”
Jhoanna Robeledo’s New York Magazine piece on the guy who throws in a Tesla if you buy his condo talks about this marketing technique. Using a Tesla is buzz worthy as a well thought of brand – after all marketing is about getting eyeballs on the listing – but is it effective? Does this technique actual sell properties?
In my view throwing in such a large concession is a red flag signifying the property is over priced enough to cover the seller’s cost of the “gift.”
Econ 101: There is no such thing as a free lunch.
The funny thing is, you never read a follow-up article that shows how this marketing technique/gimmick was successful.
A buyer for the condo in Jhoanna’s article would have the financial wherewithal to buy their own Tesla and likely isn’t thinking about buying a car during their visit to the property.
We don’t see these extreme marketing gimmicks tried with low margin properties. “If I buy this $75,000 condo I get a free Tesla!” Of course not – the condo seller in this “Tesla” story is telegraphing to a potential buyer the listing is over priced.
Yes, in a typical suburban transaction, a seller may throw in a used lawnmower to close the sale, but this is not something that is usually promoted during the actual marketing of the property.
NEWSFLASH Buyers are a lot smarter than this Tesla-giving away seller is giving them given credit for.