Boston Area Developers throw in extras to seal condo deals

The Boston Globe reports:

The Boston Redevelopment Authority recently estimated that 14,000 residential units are under way or approved, and, over the next five years, an estimated 1,000 new units will come on the market annually. That's on top of existing units that would come on the market due to normal turnover in the real estate market.

Real estate agent Mark Sullivan offers prospective buyers at 15 North Beacon Condominiums in Allston a cash incentive to close a deal. Capital Growth, the developers of the project, began selling the condos last spring, after converting and renovating 155 apartments and upgrading common areas. With 30 unsold units remaining, Sullivan now offers a $3,000 check for closing costs -- up from $2,000 last summer -- if buyers obtain their financing from the firm's preferred lender, New York Mortgage Co.

In June, Jerry Greeff, a Baltimore auto-parts dealer, helped his 25-year-old son, Adam, purchase his first property, a $322,000 unit in the complex, through a trust established to help his children with down payments. That deal included the $2,000 sweetener.

The developer also pitched owners in the building on buying a second unit. That was ''the farthest thing from my mind," said Jerry Greeff.

But Sullivan sold the Greeffs on a second unit on a higher floor by cutting the price $30,000, to $397,000 -- and giving them $3,000 for closing costs. If financing is approved, Adam Greeff plans move into this unit and rent the first one. The price reduction was key, said Jerry Greeff, who co-signed both loans, but the closing costs sealed the deal.

''We were on the edge, and he threw that in, and he closed us," he said.

Some developers are hesitant to disclose specific incentives, for fear of sounding eager to give money away -- a fear that conflicts with their desire to send a clear message that they will accommodate prospective buyers.

With higher interest rates coming the deals should get better.