Facing a soft housing market, Nashville's real estate agents are moving in for a hard sell.

What would it take to get you into a million-dollar house? How about a free Porsche? A swimming pool? Four years' worth of utility payments? Free gas for a year? What if the builder agrees to pick up the tab for your kid's college tuition?

The Nashville real estate market is glutted with an estimated 25,000 unsold properties. Stuck with properties they can't unload, homeowners, real estate agents and developers are resorting to increasingly wild incentive offers to get potential buyers through the door.
"We're calling it 'smart luxury,'" said Realtor Sheri C. Smith, whose clients are offering a free Mercedes Smart Car to anyone who buys their $1.58 million home at 5037 High Valley Drive.

The 7,200-square-foot house has four bedrooms, a wine cellar and sits on an acre of land tucked up against the Radnor Lake state nature preserve.

The car seats two, gets 48 miles to the gallon, sells for about $16,000, and about a dozen of them could park comfortably in the house's three-car garage.

But unlike Nashville real estate, Smart Cars are selling like hot cakes. There's a yearlong waiting list to get one, as Smith well knows.

"We're trying all sorts of things," said Smith, who is married to a car dealer, "and a Smart Car is something you can't go and get yourself. It's generating a lot of interest."

Home sales were down 28 percent in May compared with the year before, according to the Greater Nashville Association of Realtors.

The same survey showed the number of single-family homes, condos and other residential properties on the market topped 25,000 for the first time last month.

But unlike housing markets in the Northeast, the West and Florida, rising inventory and slowing sales did not translate into lower prices on Nashville's "For Sale" signs.

Instead, Realtors are counting on incentives, not slashed prices, to close the deal.

"Has anyone bought (a home) because of the incentive? Not yet," said Mandy Wachtler, president of the Greater Nashville Association of Realtors.

Sometimes, the homeowners come up with a deal. Down the street from the Smart Car house, former Metro Schools chief Pedro Garcia is offering plane tickets and box seats to the Hollywood Bowl amphitheater to anyone who can help him sell his $1.2 million house.

Incentives get sweeter
For jaw-dropping incentives, it's hard to compete with Nashville-area developers. Many homebuilders have been offering incentives for years — a free plasma TV, free custom-made furniture to go with the home, free gasoline for a year for homes in far-flung areas like Leiper's Fork and Fairview.

The worse the housing market gets, the sweeter the incentives. Green Hills developer Rogan Allen has come up with a $50,000 incentive package for the $2.3 million home he just built on Trimble Road.

If you buy the home at the asking price, Allen will throw in your choice of a Porsche Carrera, or a swimming pool, or pay your child's college tuition, or any one of a host of luxury incentives designed to catch the eye of luxury home buyers with plenty of other choices right now.

"It can definitely sweeten the pot for people," said Allen. "We'll give you a new car, we'll pay your property taxes for three years, we'll pay your utilities for four years, we'll send your kid to Vanderbilt for the first year."

The main aim of the incentive package is to avoid lowering the asking price. The last thing Allen wants is for home buyers to get the impression that their properties could lose value in the coming year.

As word of his incentive package spread, Allen and his agent, Wachtler, have doubled their showings of the home over the past two weeks. And Allen said he's fielded dozens of calls from other agents, eager to see whether the incentives work.

"Incentives don't sell the house. Quality will always sell," he said. "But people are going to have to reach out and do a little extra for the buyer."