Monday, October 22, 2012

Mon Post#1: It's not a price cut... it's an incentive.

So are prices going down in real estate or are vendor's simply offering "incentives" when they lower their prices?

We have shown you how houses in Richmond are selling 25% below assessed value right now in the former HAM hotspot.

And homes in Vancouver are being spotted with asking prices 23% below assessed value as well.

So with buyers afraid of catching a falling knife, how do you market in this enviornment?

Apparently you start by changing 'price cut' to 'incentive', as we see in this Craigslist ad for the Altitude Tower 1 up on Burnaby Mountain at Simon Fraser University (hat tip 'Patiently Waiting' on VCI).

As you can see by this Craigslist ad where, when the real estate agent's VIP client discount is added (presumably perusing Craigslist makes you a VIP client), the price cuts... err 'incentives' come in as much as 20% off the original asking price (click on image to enlarge):

So now we have 20% off in Burnaby.

For the billions they spend on marketing, why don't retailers like Walmart use the term 'incentive' when they cut their prices? 

Would it be because that strategy simply doesn't work?

At Walmart, 5% cut off their prices are trumpeted as a 'rollback'.

20% off? Discounts for "my VIP clients." Sounds like we're entering the domain of crazy Eddie, doesn't it?


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