It’s spring, the season home builders always count on to inspire new house love.
But with the housing market still in a multi-year depression that has left many buyers bitter, scared, or out of hope that they can own a home, many builders have decided they need to do more than rely on spring fever to get potential buyers to fall in love with their products again.
Here are five ways builders are working to play house Cupid.
Court the Realtors first and the buyers will follow.
Realtors have no respect for love ‘em and leave ‘em builders who pay commissions when the market is bad and ditch real estate agents when sales are good, says Rosemary Messina, vice president of sales and marketing with Daytona Beach, Fla.–based ICI Homes.
“We learned a long time ago you have to be consistent,” said Messina. “Even when we were making money hand-over-fist, we never ever cut their commissions.”
And recently ICI started a program that rewards outside sales agents who bring more than one buyer to the closing table by giving 3% commission for the first buyer, 4% for the second, and 5% for every one after that through the year.
Inside sales agents are also required to go out of their way year-round to make contacts and court outside agents. Each is required to visit a real estate office once a week and deliver four gifts a year to their “VIP Realtors,” who are regular providers of buyers. And every outside agent gets a “showy gourmet” basket when one of their customers signs to buy a house, whether the closing occurs or not.
ICI also offers its design center, sales offices, and models as sites for sales meetings, providing breakfast or snacks, the time-honored Realtor attendance magnet. In fact, Messina has tested how effective food is at bringing agents in to various events. ICI has compared response from outside agents on email blasts with “free wine and cheese” in the subject line to those without mention of food. The ones that mentioned wine and cheese were opened at twice the rate, she said.
As a result of all the Realtor cultivation, the percentage of ICI's sales that come from an outside agent has grown over the years from 40% to 60%.
“Right now, to be perfectly frank, in this market that’s who’s bringing the deals,” said Messina. “It’s more important than ever.... It’s having a disciple out there who say [to clients], ‘You really owe it to yourself to take a look at this builder’s houses.' That’s what you lose when you screw with your Realtors.”
March for ICI was the best sales month the company has had in years, said Messina. At one point the company wrote 12 contracts in three days.
“And these are new builds,” said Messina. After the market crash, ICI had hundreds of spec homes to work through, she said. “It’s great to go into neighborhoods and hear hammers and saws again.”
In the end, said Messina, by cultivating the outside agent community consistently, ICI gets agents who are strong advocates of ICI Homes, not just agents who bring clients as a last resort.
Be attentive and give them what they want.
At Ideal Homes in Oklahoma City, 20% to 25% of the company’s contracts start as online leads that work their way through the sales system with the assistance of an online concierge who has a knack for sounding out shoppers' wants and needs before passing off the lead to a sales agent in a community with a product that fits the customer.
But sometimes those leads get lost or don’t get followed up on to the degree that they should, even at Ideal where it’s almost an obsession. So recently the company added a new CRM system to help plug the leaks.
“We are really trying to focus on follow-up with prospects,” said Steve Shoemaker, Ideal's director of marketing. “It’s especially important in markets like ours where we don’t get a lot of foot traffic. So making the most of the traffic you have is important.”
“Follow up is a weakness for a lot of organizations,” said Shoemaker. “If we can do really good long-term follow up, we can come out ahead.”
So far, so good. Ideal’s first quarter sales are close to what they were last year, when numbers were plumped by the home buyer tax credit.