Try Before You Buy

But you better have the bucks, and there will be a test

Source: Snell Real Estate

Potential buyers pay $6,900 per night to stay in residences they might purchase at a Rosewood hotel here in Los Cabos

 “Try before you buy” was once a persuasion tactic employed almost universally by down-market timeshare agents. Now, in a second-home market awash in inventory, developers are using it to induce buyers. Tina Necrason, vice president for residential homes at the hotel management company  Montage International, has worked in timeshare, fractional ownership, “and every sort of second-home venture imaginable,” she says.

Necrason says that before the housing bubble burst, affluent families would buy mountaintop homes site-unseen because there wasn’t a lot out there. “But now wealthy people are starting to think of these resort properties as long-term investments for their families. Even the kids have a say,” she says. “They have lots of choices available around the world, and they can take their time in making a final decision.”

At the Montage Kapalua development in Maui, where homes go for $1 million to $20 million, Necrason’s team will arrange four-night stays that range from $500 to $2,000 per night and might include cultural heritage tours, luaus, private dinners, and spa treatments. She estimates that more than half of those who come for a trial stay become buyers. “For this crowd, time is precious,” Necrason says. “We feel that if they can make this commitment of time, they are serious about buying.”

Because all these developments target high-net-worth individuals, sales teams often charge hefty fees to ensure prospects are legitimate. “If you don’t charge anything and you don’t vet, you get what we call ‘speeders’—since they speed right past the sales gallery,” says Greg Spencer, chief executive officer of Timbers Resorts, a developer and operator of residence clubs around the globe. His company launched a “guest visit” program in November at Timbers’ Kiawah Island, where guests can stay for $1,200 a night.

Similarly, the Ventanas al Paraíso here in Los Cabos, implemented a “try before you buy” program for its villas a year ago. “We always say that seeing is believing,” says Frederic Vidal, the hotel’s managing director. “And with so many other beautiful private residences available for purchase around the world, having buyers stay can show them how we are different.”

Vidal doesn’t extend a special rate; guests pay at least $6,900 per night (but breakfast is included), typically staying for three nights. The bill, which can include spa treatments and dog-walking services, is deducted from the sale price. (Engel & Völkers Snell Real Estate handles the logistics.)

Seven homes, ranging in price from $2.7 million to more than $7 million, have sold through this “test-drive” program. “People who have stayed tell me that they’ve never seen this type of service for that price. It’s a good value and a good investment,” Vidal says. “The concept is basic, but it works.”