The Real Deal New York

How wealthy buyers are scoping out second homes in a slow market

Developers are using pricey short-term visits to lure buyers into a purchase
December 15, 2018 12:00PM

(Credit: iStock)

At the Montage Kapalua development in Maui, prospective buyers can arrange four-night stays — complete with private dinners and spa treatments — before deciding to take the plunge on a million-dollar (or more) house.

Amid the market slowdown, these trial runs are becoming more common among those shopping for a second home — or a site to build their dream abode, Bloomberg reported. Sellers are hoping the lavish sojourns will convince buyers to stay for good.

“For this crowd, time is precious,” Tina Necrason, vice president for residential at the hotel management company Montage International, told Bloomberg. “We feel that if they can make this commitment of time, they are serious about buying.”

Jeff Heilbrun — director of sales at the Snake River Sporting Club in Jackson, Wyoming — said about about 20 percent of the buyers stayed before they bought homes or homesites. Prices in the development range from $800,000 to $3.25 million.

Before the housing crisis, wealthy buyers often bought second homes sight unseen, the report said. But now, as they have more choices and have started to think of resort homes as long-term investments for their families, prospective buyers are taking their time.

But, given sellers’ targeted buyer pool of high-net-worth individuals, the short stays can cost potential buyers thousands.

The Montage program, for example, charges between $500 to $2,000 per night, while a “guest visit” at Timbers Resorts’ Kiawah Island in South Carolina costs $1,200 a night. Sales teams said they 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,” said Greg Spencer, CEO of Timbers. [Bloomberg] — Meenal Vamburkar