Don’t Knock It

I was skimming through a bunch of news aggregation sites the other day when I ran across a new idea in value added that I thought might be worth sharing with you (assuming that anyone is actually reading this). We’ve talked about the concept of Value Added strategy in this space a few times, but for anyone joining us late, it’s the idea of adding something to an existing product in order to make it more attractive to potential customers, which usually means giving the product a function or value it didn’t have previously – hence, literally, “adding value” to it. There have been some dandy examples hitting the market in the past year (my favorite is a product that purports to be a primer and paint all-in-one, but I have to admit that the wireless photo-printer is good, too – snap a picture, hit print, and your pictures are ready on the printer rooms or miles away), but some products are harder to add value to than others – such as real estate, for example…

I don’t mean to suggest that value added is a new concept in real estate; far from it, in fact. Most of the developments in the real estate industry over the past century or so have revolved around adding value to a house to make it something beyond a large covered area in which to store your belongings. Thus, you have such additions as central heating and cooling, built-in appliances, network cable runs, and communities of people with similar social and economic needs with facilities you can use, like pools and basketball courts. The problem is that, as so often happens with added features, all of these things have become standard, or even expected, to the extent that they are no longer selling points. These days people will expect new appliances and pre-run cabling in any new house, and concierge services in any community or development. Even community facilities and services are starting to pale, leading to increasing efforts to come up with some new amenity that will draw the purchaser’s attention. I’ve never seen anyone try offering free booze until last week, however…

A story on the Associated Press by way of The Southern.com tells the story of a woman trying to unload a townhouse in the Chicago area who has decided to include a $1,000 credit for the bar across the street after failing having trouble finding a buyer. I’m sure that the sort of people who disapprove of alcohol, bars, or anything else that people do for run will start complaining about this offer any time now, assuming they haven’t already – but the idea struck me as pure genius. Partly because this offer has the potential to add very real value to the property (anyone who drinks on a regular basis would find such a credit to be extremely useful), but also because the bar in question is a neighborhood landmark that has been in business for 113 consecutive years, and anyone wanting to meet the neighbors, make friends in their new neighborhood, and generally feel a sense of community right after moving in could make use of such a credit in ways that have nothing to do with alcoholism…

I find myself wondering if other sellers shouldn’t be looking for similar perks to offer with their property. If you were selling a family house in a suburban neighborhood you could offer a credit at a local daycare facility or preschool with the sale; if you were selling a resort property on an ocean or river you could include a boat, a surfboard, or credit in a local shop selling beach and swimming apparel; if you were selling a house in a bedroom community outside of a major commercial center you could offer a credit to the local auto repair shop or gas station, and so on. Some of these would work better than others – if the preschool is one of the ones with a nine-year waiting list and your offer included a spot on next year’s roster, the perk might be worth more to some buyers than the house itself – but the possibilities are certainly there. As silly as the idea might sound at first glance, it’s entirely possible that you could turn the Real Estate Crash around on this one simple concept: more value added…

I’m not saying it would work. But don’t knock it until you’ve tried it…