Car-radio pitch aids sales; refinancing can lower costs

Have you ever driven by a house for sale, thought about taking a look - and then just cruised on by, not willing to be barraged by sales talk? Many real estate agents work long and hard to get such reluctant buyers to travel the distance from the street curb to the front door.

Now, however, Greg Herrick, sales manager of Radio Realty in Minnetonka, Minn., has developed a sales system that may help out both parties. Instead of asking potential buyers to come inside the house, all it requires of them is a willingness to flick on the car radio.

What happens is this: Drivers perusing a neighborhood may spot a ''for sale'' sign in front of homes on the market. But along with other pertinent information , it lists a radio frequency which, if you park nearby and tune in, will offer additional information about the house.

It's just enough, Mr. Herrick says, ''to make you want to come in and hear more.''

Potential buyers are responding to the idea of a pressure-free sales pitch, Mr. Herrick says. And real estate agents enjoy being able to bend a customer's ear 24 hours a day.

Richard Rector of Realty Executives in Phoenix thinks the technique is a great new marketing tool. ''It's really good to have the opportunity to make a presentation to someone, especially when they're sitting right in front of the house, looking at it,'' he notes. ''And it keeps interest up in the neighborhoods. People get excited when they see a new sign.''

The system was introduced last November at the National Association of Realtors convention; it sells for $325. Business is brisk, according to Mr. Herrick, who says Radio Realty now has equipment in most of the 50 states. And the transmitters aren't just for home sales: Mr. Herrick has plans for making them available to auto dealers - and a couple of churches have even thought that they would be a good way to give passers-by a sneak preview of the week's sermon.

* * * For those who already own a house - one purchased within the last three years - mortgage burdens can take a hefty chunk out of the monthly budget. Because of this, many owners have been seriously considering refinancing.

The Federal National Mortgage Corporation reports that 70 percent of its mortgage payoffs early this year were those at a rate over 15 percent. Officials speculate that the major portion of these were by people who chose to refinance.

In addition, the Mortgage Bankers Association says that from 30 to 40 percent of all mortgage activity this spring has been in refinancing. The reasons are simple: While refinancing because of a mild fluctuation in mortgage rates is generally not considered to be worth the cost, an owner can save a handy sum by moving from an 18 percent loan to a 12.5 percent conventional loan.

Commonwealth Mortgage Company, a Boston firm that does business throughout New England, reports surging applications for refinancing, and officials expect about 40 percent of their total mortgage business during the current fiscal year to be in refinancing.

John J. Sousa, president, offers the example of an owner with a $60,000 mortgage at 17 percent. By rewriting the mortgage at the current 12.5 percent, a homeowner can save $215 a month. Finance charges - generally two points, plus fees - can run between $1,000-2,000.

Homeowners can avoid out-of-pocket expenses, however, by refinancing at a slightly higher rate and absorbing the fees in their monthly payments.

For those who are accustomed to paying the higher monthly rates, Commonwealth also offers to finance a larger mortgage with comparable payments, and then give the owner the leftover amount in cash. Monthly savings (When financing a mortgage at 12 1/2%) Interest Mortgage rate $40,000 $50,000 $60,000 $70,000 $80,000 19% $209 $260 $313 $365 $417 18% 176 220 264 308 352 17% 143 179 215 251 287 16% 111 138 167 194 222 15% 78 98 119 138 158 14% 47 58 71 82 94 * All figures in this chart are based on a 30-year, fixed rate mortgages. Source: Commonwealth Mortgage Company