Are You Losing Sales Because Your Home Shoppers Don't Understand The Money?

Written by Posted On Friday, 26 June 2020 09:09

The Realtor said that his Atlanta resale shoppers were trying to decide among eight resales, and he had run out of ideas to help them get over this trying time in the showing process.

"Then I remembered that what they were not understanding was the money. I remembered to show the couple a new home, just to 'see what they could get for the money they wanted to spend". They visited a new home model center and made a decision the next day to buy one of eight resales. 

It was not a sales skill or a closing skill. It was an unspoken objection. "We don't understand the money." The only way I know to help your resale shoppers understand how they can live for the price they want to pay is to show them new construction. 

There is a lesson I learned about trust along the way when it comes to 'understanding the money." 

As project manager of a large condominium in St. Petersburg, Fl,  I learned a  lesson about money and trust that I never forgot.  It had been raining for days. The grass needed mowing. The more it rained, the more calls I got demanding the grass to be cut. 

I asked one of my mentors, a retired US Air For Colonel, what he thought I should do since the grass will not be cut until it stops raining. 

He took this opportunity to teach me an invaluable lesson that I later applied to understand better why resales shoppers decide to wait. 

He was quick to remind me that this was an issue I could not control. 

"When it stops raining, and they cut the grass, the complaining will stop. But, if you don't demonstrate that you understand the money when presenting the annual association budget, the owners will not trust you to manage anything. Wow. 

My mentor was not referring to taxes and complex issues that CPAs understand. He was talking about the association's annual budget. Why? Because the budget affected the owners' monthly maintenance fee and potential assessments.

I quickly learned that applying what I learned was critical to my success as a manager. 

Later, as a real estate broker,  I watched resales morph into a renovation-driven product shopped by renovation- resistant shoppers. 

I  began to understand that a lack of 'urgency' was not the only reason they 'decided to wait." The other reason, and maybe a bigger one, was living in the land of the unspoken objection. These shoppers understood the price, but they did not understand what the cost might be after they purchased. They did not trust deferred maintenance and renovation and replacement concerns that may or may not be real. They did not understand the money. 

They may or may not admit it to you.  Many of the sixty- five percent of new homes sold by Realtors, some say as high as forty percent, shopped resales first then decided to consider and purchase a new construction home. Why? 

When they shop for new homes, they are less confused about the money because the base price is fixed.  When your resale shoppers visit a new home model with no upgrades, they can see, touch, and feel how they can live for the fixed base price of the home.

It is why we teach that showing a new home with a fixed based price provides the shopper a price baseline by which to evaluate the resales values they will see following the new home showing.   Once your prospects understand what they can buy for the money based on a fixed price, they have a real way to compare prices, values, and needed adjustments to their requirements. 

Do you any of your prospects keep wanting to see more homes? Show them a new home in their price range and see what happens. Please don't show it to sell it. Let the onsite sales consultants do the selling.  You are there to help your shoppers better understand how they can live for the money they want to spend on a home.

Some will decide not to buy the resales you showed and purchase a new home. Others will make better informed and more confident resale offers. 

Try it. 

You will be surprised how much your resale shoppers will appreciate this valuable service.

Personal Note: I have guarded the content of my course over the past four years due to its content. But these days I decided to share some of what we know works with the hope that you may use it to increase your sales. Look for more in my next few columns. And let us know if there is a  topic you would like us to address to help you better serve both resale and new home shoppers.  

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David Fletcher, NHCB

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