Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, February 3, 1991 TAG: 9102020011
SECTION: CURRENT PAGE: NRV1 EDITION: NEW RIVER VALLEY
SOURCE: KEVIN KITTREDGE NEW RIVER VALLEY BUREAU
DATELINE: BLACKSBURG LENGTH: Long
These days the right deal in the New River Valley can swing you a trip to Paris.
Or Hawaii.
Or the Bahamas, on the cruise ship Nordic Empress.
It started with AT&T. And it happened this way.
When AT&T phased out its Fairlawn operation last year, it bought dozens of homes from its own executives.
Homebuying is one of a number of services offered to transferred AT&T managers, said John Bemont, the company's corporate relocation manager in New Jersey.
Though buying up the homes may have saved the transferred executives a headache, it left AT&T with a lot of houses to sell.
And most Realtors agree that the New River Valley these days - bowed by recent layoffs and budget cuts - is a tough market.
So AT&T's relocation companies began looking for something to get the homes moving in a slow-as-molasses market.
The relocation companies - Prudential Relocation Management and Coldwell Banker Relocation Co. - work under contract to AT&T.
"I've seen all kinds of things tried," Bemont said.
But Bemont said free vacations are a first.
The idea of giving away a free trip to the Bahamas - "We'll Send You Sailing," reads the newspaper ad - came from Prudential. Bemont said it was a first for AT&T.
The purpose of the cruise offer is simply to get people out looking at the AT&T homes, said Prudential Senior Vice President Priscilla Toomey in New York. "I know it is beginning to get these houses moved along," she said.
The cruise also is being offered to real estate brokers. "There is a relationship between broker interest and time on the market," Toomey said. "The broker is instrumental in getting traffic."
Asked if the deal emphasized the homes of the AT&T executives at the expense of other homes on the New River Valley market, Toomey said "That's just kind of life."
The deal applies only to certain properties, not to all the AT&T homes.
A recent Townside Realtors advertisement offered the Bahamas cruise on nine homes, ranging in price from $75,900 to $197,900. Some other local Realtors also have AT&T listings, including some with cruises, they said.
The cruise is a $2,000 value for the broker and a $2,000 value for the buyer - $4,000 total, Toomey said. Both Realtor and buyer get a trip for two.
Bemont said the cost is cheap compared to keeping the homes on the market for several additional months.
Has the offer worked?
It got Amy Gwyn looking, for one.
Gwyn, an employee of Inland Motor Division in Radford, is thinking of buying an AT&T house in Christiansburg that comes with a free cruise to the Bahamas.
"That makes it look a little bit more attractive," said Gwyn of the cruise. She and her fiance have talked about using the trip as their honeymoon if they buy the house.
Gwyn said they might not have looked at the house if the cruise hadn't been part of the deal - though in the end it was the first house both she and her fiance liked. "It was a little bit over our (price) range," Gwyn said.
Vicki Powell, a Townside Realtor in Blacksburg who has a number of the AT&T listings, said some real estate agents, in addition to prospective home buyers, had called her wanting to know which properties came with free cruises.
"Since the promotion began, 11 homes have been sold and six cruises given away," said Powell, reading from a prepared statement. "Others are pending. The goal is to attract attention to the houses, which is why the cruise is offered to both buyer and sales agent."
Powell estimated more than half of the AT&T relocation company homes have been sold since they came on the market last spring - but she was uncertain how many homes there were to begin with.
The cruise package has been offered only since late November.
Powell, who won one of the cruises, left for the Bahamas Saturday with her husband. They are taking their children along at the family's expense, she said.
Some buyers, Powell noted, have bargained for a lower price tag in lieu of the cruise. "We feel that it's a win-win situation all the way around," she said.
Some Realtors are less than thrilled.
"They [AT&T] do have to sell these houses," said Ernestine Foresman of Raines Real Estate. "They have hundreds of thousands of dollars sitting here."
But she said other real estate agents have called her to ask if a vacation came along with a particular Raines listing. Raines handles some of the AT&T homes. "That's not good. Hopefully no one in my company would do that," Foresman said.
"It's marketing," she said of the AT&T/Prudential Bahamas cruise offer. "It's not what we would like, but it's marketing."
Meanwhile, the cruise offer has some local home owners offering deals of their own in an effort to compete.
One such offer comes from Blacksburg's Laurel Ridge - where a $267,000 home includes the choice of a weeklong trip to Hawaii, five days in London or Paris, or a seven-day cruise. The deal is good for both buyer and broker, said Townside Realtor Laura Austin.
Austin said the Laurel Ridge offer came in response to AT&T's.
"I had another seller that in reaction to it decided to give $1,500 cash back at closing," Austin said. "It's very difficult to compete with reduced prices on relo (AT&T relocation company) homes and cruises. Certainly the individual homeowner is put at a disadvantage."
Radford Realtor Ken Farmer said the cruises probably haven't had as much effect on the local real estate market as a drop in prices caused by the presence of the AT&T homes. "I've had people come in here and say, `Are there any more AT&T relo homes left?" Farmer said.
"But anything different is going to get people's attention," Farmer added of the cruise offer.
Realtor Ellan Dodson of Townside said one of her listings in the posh Deercroft development outside Blacksburg includes an offer of between $1,200 and $1,500 toward the vacation trip of the buyer's choice.
Dodson said that and other inducements on non-AT&T homes are "absolutely" reactions to the Bahamas cruise offer.
"It has definitely eclipsed everything else," she said of the Bahamas cruises. "It's very difficult to compete against."
Asked if she thought AT&T was using its financial resources unfairly by offering free vacations to sell its homes, Dodson said "I think it's unfortunate. I don't think corporate America thinks in terms of fairness."
AT&T's Bemont, asked the same question, said "I think more realistically it shows we have a difficult market. At some point in time it becomes a losing proposition to keep them [the AT&T homes] on the market . . . I don't think there's any intention to use deep pockets" to move the homes, he said.
by CNB