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Leverage New Homes Showings To Sell More Resales - And New Homes

With all due respect to President Franklin D. Roosevelt, the only thing home buyers have to fear in today's housing market is the fear paying too much their home, or as home sellers fear, selling their home for too little. Have you ever seen a more price-confused real estate market? Let's see now. If I want to "steal" a lender-owned home, I should bid at least ten percent or higher than the listed price.


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If I want to buy a short sale, uh…should I make an offer lower than the asking price and hope it closes in my lifetime?

On the other hand, the only thing moving faster than new homes construction are price increases that are apparently imbedded in weekly sales meeting announcements.

So what's a prospective home buyer to do? Is it possible to buy a home in today's market knowing that you paid the best possible price for the home? If your answer is 'negotiation', fine. But it's not where you start. You start with an understanding of the real estate market.

To start lets understand a few things about home shoppers that a Builder Homesite Inc (BHI) study showed about the market. BHI is a consortium of 32 of the largest production home builders in the United States.

  • Eighty four percent of all home buyers will contact a real estate agent.
  • Thirty five percent of all homebuyers are considered the 'indifferent' segment, meaning they will purchase a resale or new home.
  • Nineteen percent of the market will insist on a 'new' home.
  • Forty six percent of the homebuyers will insist on a resale.

Here's the compelling and possibly provocative reality. Fifty four percent of the home buying market will look at new homes. Here's the provocative part: Many of these prospects are on their way to your office as you read this, and you have not qualified them for new homes.

If there was ever a time in a real estate career to start showing new homes it is now. The purpose of showing a new home is to help you help your prospects get comfortable with the market, and thereby become as comfortable as possible with 'price', whether it be a new home's fixed price or a series of offers to purchase a resale.

When they get comfortable with 'price', more homebuyers will take the action to make the purchase, as opposed to making the dreaded Monday morning "We decided to wait" call or text.

The solution: Shop a new homes model center to see what you can get for a fixed price. Then compare that knowledge with the resales you see. What you learn at the new homes sales center about location, financing and closing incentives will help you make a better decision about what to offer for a resale, should you decide to make an offer.

MLS comparables are useful, but value can be hard to assess without the new homes model comparison.

If you are considering a resale home purchase, request your real estate agent to show you a new home model in your general price range before you look at resales. The fixed price becomes your benchmark from which to determine what your resale offer should be. Therefore, you will make a better and faster 'buy/not buy' decision about the resale homes you see.

I have a good friend who learned this lesson the hard way. She showed a couple who wanted to "steal" a short sale and renovate it, but everything she showed them would require too much work and expense, she said. Finally, she suggested that because they were going to put so much into renovation perhaps should at least look at new homes. They agreed and within a few days purchased a new home, 'and raved about me throughout the closing," said my friend.

"If I had showed them a new home first, if for no other reason than to 'get some ideas' they would have probably made a faster decision because they had a new home with which to compare resales." They bought a new home, but had the agent showed the new home first they may have purchased a resale.

The overwhelming reason home shoppers should visit a new homes center is not because they might buy one, although they might. The real reason to visit the sales center and tour a model is to establish a price benchmark by which to better evaluate the price and value of the resales prospects will see.

If you are an agent, put a new home sales center at the top of your showing schedule whether requested by the prospect to do so or not. The visit gives the prospect something they cannot get anywhere else, a fixed-price visual of what they can buy for their money.

Visiting a new home after seeing resales defeats the purpose of the visit. The new homes visit needs to be the first showing of the day.

Home shoppers are barraged with data. Simplifying a way to evaluate 'price' will be a refreshing service, one that they will surely appreciate, especially when they close on a home knowing they purchased the home for the best possible price.

Your thoughts?

Published: April 19, 2013

Use of this article without permission is a violation of federal copyright laws.




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David Fletcher is founder of David Fletcher's New Homes Sales Club, a one-stop fusion of new homes inventory sources and new homes sales solutions for real estate agents and home builders.

David has more than 30 years' experience as a licensed real estate broker. He has been the broker of record and/or marketing consultant for more than 70 communities totaling more than $3 billion in sales.

David is a Lifetime Achiever, and was a featured speaker for the National Association of Realtors. He has written several books including Condominium Sales and Listings, Sales Lessons Trump Sales Skills, and Your Real Estate License.

You may contact him at davidf@newhomesniche.com or by text or phone at 407.234.2349 or visit his website.




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