December 4th 2024.
Susan Chong, a well-known broker and owner of Iconique Real Estate, has taken a unique approach to help close condo deals. In an effort to attract buyers, Chong is offering a generous $5,000 incentive to those who purchase one of the eight condos she currently has listed in The Coloradan, a luxury building located in the heart of Union Station.
Chong, who covers the cost of the incentive from her own commission, allows buyers to use the $5,000 however they wish, though she markets it as a free vacation anywhere in the world. In a competitive market where cash purchases are the norm, traditional incentives like interest rate buydowns or covering closing costs often fall on deaf ears. Chong wanted to find a way to stand out and catch people's attention.
The reason behind this extra incentive is the decline in condo sales, which have dropped by 35 percent since 2020. According to data from the Denver Metro Association of Realtors, sales of attached properties have consistently decreased since their peak during the pandemic in 2021. As of October, the metro area has recorded 9,016 closed sales, a significant decrease from 10,833 during the same period in 2022, 13,679 in 2021, and 16,546 in 2020.
Buyers who close on designated units in The Coloradan by the end of the year will not only receive Chong's $5,000 incentive but also additional bonuses from the sellers, such as a year of HOA dues, free parking, or both. It's worth noting that parking spots in the building cost $230 per month, and in some cases, the seller bonuses can range from $10,000 to $17,000.
The Coloradan boasts 334 units, including 294 market-rate studios and apartments with one, two, or three bedrooms, 33 income-restricted units, and seven luxurious penthouses. Chong, who came up with the promotion while traveling in Korea, wanted to offer something that would grab the attention of potential buyers. "People are under a lot of stress, and this is a way to appeal to their desire to take a break," she explained.
What sets Chong's promotion apart is that she's actually paying the buyers, which is not a common practice in the industry. Generally, sellers may offer assistance with closing costs or help buy down points on the mortgage. With new construction, builders often offer deals involving design packages, upgrades, or closing costs.
According to data from REcolorado, a total of 12 units in The Coloradan have sold since May, with an average list price of $551,204 and an average closing price of $539,335. Chong reveals that eight of the units she's currently selling are part of the promotion, with one of them pending sale. The average list price for these units is a whopping $920,000.
Chong believes that the condos she's selling appeal to second-home buyers, many of whom have homes in the mountains. Others have primary residences in different states but have a strong connection to Colorado, such as having children attending the University of Colorado Boulder. Living in downtown Denver is particularly attractive to these buyers because it provides easy access to healthcare, the airport, shopping, sports events, dining, and other conveniences.
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