Two years ago, it wasn't uncommon for O'ahu homeowners to sell their residences in a few days without so much as holding an open house. They might set price records in the process.

But now with the local housing market halfway into a likely second year of fewer sales, some sellers are taking extra steps — on top of standard marketing or price reductions — to help attract buyers.

Creative strategies being used increasingly include sellers offering cash back to buyers, and brokers auctioning homes.

One upstart broker, Mickey Emons with East Oahu Realty, earlier this year tried arranging an open house with a backyard barbecue and autograph signing by University of Hawai'i football players, though Emons said the NCAA nixed his plan because of collegiate athlete endorsement rules.

"It's been pretty tough getting started just because of the dwindling sales," said Emons, a former firefighter from Connecticut who got into the Hawai'i real-estate business four months ago.

Though appearing more frequently, the extra incentives are still relatively few given that O'ahu's housing market has remained fairly strong with slight price appreciation this year.

The median price for single-family homes sold this year through May is up 1 percent to $635,000. The median condominium price is up 6 percent to $322,000.

Purchase incentives from O'ahu home sellers also are a far cry from what's happening in some badly performing Mainland markets, such as Florida, where sellers have reportedly offered deals including a five-day cruise and a one-year buyback guarantee.

NOT AS EXTREME AS '90S

Since late last year, several new-home developers in Hawai'i have been offering more lucrative incentives including below-market financing, no closing costs, military discounts and as much as $60,000 in credits.

Steven De La Peña, vice president of O'ahu operations for Century 21 All Islands, said O'ahu's resale market is still pretty strong, so even desperate sellers aren't going to great lengths like some did during Hawai'i's housing market slump in the mid-1990s. At that time items such as boats and cars were offered as freebies.

"We're not really to that point yet," he said. "It's still a fairly strong market."

Still, the offering of buyer incentives in O'ahu's resale housing market underscores the transition from the market's frenzied height, when sellers could often ask over-the-top prices and get them.

O'ahu home sales began to trend downward in late 2005. This year through May, there were 3,995 sales of existing single-family homes and condos, down 12 percent from the same five months last year and representing the fewest sales for the period since 2002.

Homes also are taking longer to sell. Through May, single-family residences this year spent a median of 42 to 70 days on the market before selling. That compared with 40 to 52 days in the first five months of last year. Condos took a median 38 to 59 days to sell this year, compared with 28 to 38 days a year earlier.

Inventory is mostly higher, too, giving buyers more options and leverage.

This year, there have been about 1,700 single-family homes available for sale, and 2,300 condos — the most during January to May since the late 1990s.

Real-estate brokers say giving a home an attractive price and appearance is the best way sellers can entice buyers. But throwing in a little something extra also can speed or cinch sales.

One of the more popular incentives is for sellers to offer cash back that can be used toward closing costs or to buy down the interest rate on a mortgage.

According to current property listings, many credits are between $3,000 and $5,000, but also run from 1 percent to 3 percent of a home's price, which on a $635,000 home would be $6,350 to $19,050.

"We see that more commonly now because the market has slowed," said Chansonette Koa, an agent with Properties Unlimited Inc.

Don Dietz, an agent with Help-U-Sell Paradise Realty, said he's suggested incentive options to sellers that include offering cash at closing to pay one year of maintenance fees, to pay the first few monthly mortgage payments or to cover closing costs up to 1 percent of the purchase price.

"As the market changes and homes stay on the market longer, it becomes obvious the seller has do more to increase interest in their home," Dietz said.

CASH BACK ATTRACTIVE

The vast majority of homes in today's market are still selling without incentives and at prices that are about where they were last year.

But for sellers considering dropping their asking price — something increasingly common since last year — offering a cash incentive can be more attractive.

For the seller, offering cash at closing can eliminate the appearance of devaluing a home with successive price drops. For the buyer, cash back is often better than receiving an equivalent discount on the home's price because the savings is up front instead of spread over the life of a mortgage.

"You're out-of-pocket expense is going to be less," Dietz said.

However, mortgage lenders sometimes nix deals when they perceive buyers are getting money back to provide cash down required for a loan. Also, receiving cash back and paying a seller more for a home than what is reported to a lender constitutes fraud.

Besides closing cost credit deals, auctions are another strategy that local sellers and brokers are using more. These can stimulate a sense of urgency and buyer competition.

Elite Pacific Properties began holding auctions in February, and has reported mostly positive results. Stephen Cipres, an Elite Pacific partner and broker, said the firm has tried to auction five homes this year, and sold three. A fourth drew a successful offer before the auction, while a fifth received a bid that the seller rejected as too low.

"It's another way to market (property)," Cipres said.

In one case, Elite Pacific in March auctioned a North Shore home that the seller initially listed on the market in January 2005 for $2.8 million, according to listing records. After a couple of price drops to $2.3 million, Elite Pacific put the home up for auction with a minimum $2 million bid. It sold for $2.2 million.

Elite Pacific now plans to conduct a bigger auction event at the Hawai'i Convention Center on July 14, complete with food and wine, in an attempt to sell more than 20 homes represented by several different real estate brokerage firms.

"It's going to be nice," Cipres said. "We think it's going to work."

Bryn Kaufman, an agent with Realty Executives, regards auctions, cash back and sending out catchy postcards as marketing strategies that will always have a place. "But the bottom line is the price," he said.

"If you want to sell fast, you fix up your property, you stage your home and make it as attractive as it can be, but it comes down to price."

As buyers gain upper hand in cooling house, condo market, owners resort to offering various incentives

Reach Andrew Gomes at agomes@honoluluadvertiser.com.