Developers throw in extras to seal condo deals

With a wave of new condominium units now available in Greater Boston, real estate developers are offering incentives to boost sales and move hard-to-market units.

Developers are often willing to pay closing costs, forgive monthly maintenance fees for a year, or throw in amenities such as free hardwood floors. These incentives are rarely advertised, but buyers, sensing that the leverage in negotiations is shifting in their favor, are bargaining harder for extras.

''All of a sudden, in the last year, there are so many projects that we haven't really been facing this kind of surge of units and projects in the city before," said Lili Banani, a Back Bay agent for Coldwell Banker Residential Brokerage. ''There's a lot of competition, and that's why you see more of these incentives."

The market for single-family homes in the suburbs slowed considerably in 2005, but Boston's condo market remains strong as aging baby boomers downsize their lives and first-time homebuyers find condos more affordable than houses. Yet there are currently about 1,350 downtown condos for sale, up from 880 a year ago, according to Listing Information Network, which tracks that market.

And the pipeline is full of new construction and apartment-to-condo conversions. 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.

''We're definitely willing to talk," said Kevin Lewis, marketing head for Regatta Riverview Residences in Cambridge, near Boston's Museum of Science. He has 30 units left in the North Tower and began selling in the 221-unit South Tower last fall.

Jeff Trigilio, general manager of Listing Information Network, said developers prefer offering incentives to reducing prices, as a way to protect their future sales prices and the value of new owners' properties.

In 2005, the median condo price in the Boston neighborhoods that Listing Information Network tracks rose 10 percent to $463,000, and to keep prices firm, Trigilio said, developers ''are a little more creative about how they're structuring discounting on the units."

A temporary waiver of condo fees is a popular lure.

To bring in buyers at One First while the 196-unit East Cambridge project is being constructed, Leggat McCall Properties agreed to pay 12 months of fees, an offer that expired Monday, said John Soininen, senior project manager. The offer was ''part of a year-long, pre-construction marketing program," he said.

Fee waivers can mean big savings. Developer Crescent Heights waived one year of condo fees to sell the last two units of the Glass Factory in East Cambridge. At $446 a month, those buyers each saved $5,352.

Kevin Ahearn, president of Otis & Ahearn, a downtown brokerage firm, said incentives don't necessarily signal a market slowdown. He remains bullish, noting that 311 downtown condo deals went under agreement in the first six weeks of this year, up from 295 last year during that time.

Large national developers, including his clients Draper and Kramer Inc. and The Carlyle Group, offer incentives so they can sell out and move on to other projects in other cities, he said. Sales at their 367-unit Parris Landing in Charlestown Navy Yard are ''ahead of projections," he said, and the incentives are aimed at selling the remaining units by June to preserve profit margins.

The incentives: $10,000 for hardwood floors, or a year's worth of condo fees.

But buyers shouldn't get carried away.

''You can take one or the other -- you can't necessarily do everything," he said.

Kimberly Blanton can be reached at blanton@globe.com.