Selling homebuyers on city living

Joe Grunnet has never been shy about promoting urban living. His real estate brokerage is called the Downtown Real Estate Group, he lives on the edge of downtown, and he once opened a coffee shop in a caffeine-deprived near-downtown neighborhood to help promote a sense of community.

His latest attempt to lure people downtown aims to go beyond the typical daily-deal offerings, including discounted restaurants, massages and car detailing.

"At the end of the day, the half-off cheeseburger is starting to become like white noise; they can find deals on this stuff anywhere," he said.

In an attempt to step out of the box from standard "Joe Realtor," he said, he met with his Internet marketing guru and hatched a plan to offer a 90-minute tour of historic downtown-area neighborhoods, including visits to cool For Sale lofts to help people visualize what living downtown might be like.

"This was something new that had never been done," he said. "We knew we couldn't offer half off a home or half off closing costs -- it had to be a service, so what do we have? History and the neighborhoods. That's something different."

Before going public with the idea, Grunnet did a bit of homework. He sent an e-mail asking prospective attendees to rank their interest in living in an urban environment on a scale from 1 to 10. Most said that the interest level was in the 2 to 5 range. "It was amazing how many people living in the suburbs who don't know what's going on down here," he said. "They have tunnel vision; they don't think about what the city has to offer."

The initial concept called for filling a bus with a bunch of people and then driving through the neighborhoods, stopping along the way to visit several lofts.

The primary goal is to expose people to hip, new downtown and Northeast neighborhoods, he said, with the hope that one of the those attendees might call his brokerage when it comes time to buy.

"Leads weren't our main goal," he said. "How do we expose what this great city has to offer -- past and present? Then when people want to live that lifestyle, how do we get them to come to us?

The daily-deals companies were less enthusiastic. They only make money if the deal sells, so Grunnet needed to convince them that the offer would sell.

Groupon didn't bite, but LivingSocial did.

The first offering netted more than 170 buyers. The offer was for a $30 ticket, they got 50 percent off and they paid 15 bucks.

He's not sure why the response wasn't as positive.

Grunnet has already done several of the tours, which includes identification of historic landmarks and descriptions of "things that a lot of suburban people never think to do," including Segway tours and a kayaking company along the Mississippi River.

At the end of the tour, he offers gift certificates for restaurants to encourage people to come back to the neighborhood.

Grunnet said that he's already done more than a couple dozen of the tours, and attendees seem pleased. It's clear before they take the tour that he's a real estate broker, but that there are few expectations.

"In the art of generating new opportunities, there's branding and exposure," he said. "And there's generating future opportunities."

Marshall Saunders, the broker at Re/Max Results in Eden Prairie, said when the daily deals concept first emerged, several agents tried to get on board with a variety of offerings such as free home value analyses. "I know that the agents received some pushback from Groupon in their efforts, but I'm not sure why," he said.

Peter Krasilovsky, vice president and program director for BIA/Kelsey, said that use of daily deals by real estate agents is a good idea that's not completely unique. He said that in the Chicago area, for example, a group of agents offered a discount on brokerage fees, but it wasn't a success because it committed agents to using a specific brokerage.

Krasilovsky said that as such deals evolve from merchandise to experiential opportunities including various tours, such offers could help alleviate "deal fatigue."

"Many daily deals are used to plan weekend entertainment, especially for newcomers to towns, or suburbanites coming in to the metro area," he said.

Arlo Dissette, a sales agent with Fazendin Realtors in Wayzata, said while Grunnet is selling the kind of experience that many agents offer for free, he's a fan of the concept. "It's a creative way to capture potential buyers, it really is," he said.

"I think it'll evolve," Grunnet said. "We'll continue to make tweaks and changes to make the experience better for them and us. It'll definitely be ongoing."