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Giving the house away

Frustrated as her house languished on the market for three straight summers, J.J. Rodgers is trying a new sales tactic: giving the two-story home away in an essay contest.

She's received more than 500 entries — each essay requires a $100 entry fee — for her four-bedroom home in Red Feather Lakes, Colo. She's hoping for a minimum of 2,000 entries, or $200,000 in fees, by the May 25 deadline to pay off the mortgage, cover closing costs and have a little left over. Rodgers last listed the property at $169,000 after cutting the price three times.

"We don't have anything to lose," Rodgers, 45, said. "If we're unsuccessful, at least we did something different from what we've already tried."

Rodgers isn't alone in turning to unconventional sales incentives to unload her house. Aside from cash, home sellers across the country are giving away luxury cars, homeowner warranty plans and furniture to entice buyers.

The inventory of existing homes on the market rose in January to a 10.3-months supply, meaning it would take that long to unload existing inventories, while the supply of new homes increased to 9.9 months, the longest period in more than 26 years.

The glut has battered sales volume and prices. Sales of existing homes dropped to the slowest pace on record in January, with the median price sliding to $201,100. New home sales in January fell to the slowest rate in nearly 13 years.

To avoid getting lost in the crowd, homeowner incentives vary widely. One Colorado homeowner offered a club membership and golf lessons, worth about $4,000, on his $349,000 house on a golf course. Another seller in the state is willing to part with his tractor and pickup truck to remove snow around his home on 40 acres.

Daniel Lasnick, a real estate lawyer in Stamford, Conn., recommends discussing deals involving quirky incentives with a real estate lawyer. Depending on the incentive, a side agreement may be needed. Additionally, Lasnick said a buyer may want to consult with an accountant, especially regarding contests.

"If you're a winner and it's a prize, you'll have to pay income tax on the house. It's no different from winning a lottery," he said.

Once a popular arrangement in the 1980s and 1990s, owner financing is back in vogue as banks shy away from making home loans to anyone except the most creditworthy. Greg Winfield, who runs the Web listing service OwnerWillCarry.com has seen a recent increase in owner-financed and lease-option properties for sale, especially in California and Arizona.

In owner-financed sales, sellers lend all or part of the money needed to buy the property. Often, the mortgage payments are held in an escrow account and a real estate lawyer arranges the transaction.

"People are offering all kinds of goofy things to get their houses sold," said Surprise, Ariz., real estate agent Allen Butler. "But what gets a house sold really is going to be based on price and price alone. The incentives, they can attract traffic and interest."

Buzz was all Bob and Ricki Husick needed to sell their Wexford, Pa., home. In October, the couple advertised that the buyer would get the purchase price back upon the pair's death. After vetting more than 100 offers, the couple found a buyer 80 miles from their two-story colonial and plans to close before the end of April.

Excerpts from the home essay contest

A few examples of the more than 500 entries from J.J. Rodgers and Wes Ludlow's home essay contest. The essay is open to any subject and limited to 500 words. "We've been overjoyed by some of the stories. Some are sad, inspiring, just amazing," Rodgers said. "We feel as though we could give the house away to someone over and over again."

• "There was never a more caring, loving mother than mine."

• "It rolled to him, my favorite ball. He picked it up. 'Give me my ball,' I said. 'I think you should come get it.'"

•"I sit by the fire, knitting. My grand daughter runs across the room, giggling. I know she will jump in my lap. We play this game, she and I have played this game so many times before."

•"Why is there war? What does it all mean … to serve, to give, to be separated from those you love ... To kill. I never killed a thing before. I scream inside."

• "My father and I fished those two rivers all during my childhood. I miss him. I stand by the river now, close my eyes and see if I can recall the sound of his laugh. He had an awesome laugh."

• "Do loved ones make life more important to us when they die?"

• "I never understood some sports. I always got baseball. Nothing like a baseball game and a hot dog. Want to change your mood? Go see a baseball game and enjoy the food of the gods: a hot dog!"

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Giving the house away 03/18/08 [Last modified: Tuesday, March 18, 2008 10:37pm]
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