In the cutthroat world of new-home sales every builder faces competition, whether from large national players or the guy down the street with a pickup truck and toolbox. Knowing who your competitors are is key to success because it helps you to learn how to differentiate yourself from them.
But in many markets, a new-home builder’s biggest adversary isn’t another builder, it’s another type of home: an existing one. The reality is that there are a number of reasons why a home buyer might prefer a resale house, even one that needs extensive work. So, in the spirit of “getting to know the competition,” let’s look at some of the reasons why.
For instance, the buyer of a resale home may have his or her heart set on moving to a specific urban neighborhood or older suburb where newly constructed houses are rare or non-existent. Or, a resale buyer might be a do-it-yourself aficionado who relishes the opportunity to transform an old house into a dream home, even if it takes considerable time and money.
In these cases, it’s understandable that some home buyers prefer an existing house. But what about other clients who are on the fence about whether a new home is right for them? As you well know, there are considerable advantages to buying a brand new home, so make sure you point them out. Here are a few:
Community amenities: Many new homes are located in master-planned developments with resort-style community centers, large pools, trails, and clubhouses. Plus, new homes are almost always situated in close proximity to some some of the best schools and shopping so play up all the amenities in and around your communities.
Customization: A second advantage of a new home is that the buyer can have input on its design and product selections. Most discriminating home buyers don’t want to settle for someone else's choices when they can select their own cabinets, countertops, appliances, carpets and flooring. Remind them that ultimately a brand new home will reflect their personal style, not someone else's taste.
Energy savings: Today's new homes are far more energy efficient than homes built 10 or 20 years ago, something your customers may not think about. Show them how much they can expect to save on heating and cooling bills by buying one of your state-of-the-art homes. It’s also important to talk about how today’s homes are healthier, with low-emitting products and paints and the latest ventilation and air filtration equipment that provide unparalleled indoor air quality
Low maintenance: As mentioned earlier, there are indeed some do-it-yourselfers who love to spend their free time repairing and fixing their homes, but they are in the minority. Most homeowners prefer to relax and do fun things with their friends or family during their free time. New homes are the obvious choice for this group because they are built with modern systems and components that require less care and maintenance and are engineered to work together for hassle-free living
Less upkeep: A resale home likely has tired products that may soon need replacing. Remind your customers that with an existing home there is always a looming concern of what it’s going cost to replace a roof, appliances, or a water heater. Those are the unadvertised costs of not buying new, because everything in a resale home is used and out of warranty. Instead, show them how your warranties will protect their home for the long haul—20- or 30-year warranties for roofing materials, 10-year warranties for structural components, and five to seven years for HVAC systems.
Financing: Without question, financing is one of the most confusing aspects of the home-buying process. To help customers through this difficult time, partner with mortgage subsidiaries or affiliates to custom-tailor financing and down payment options to each buyer’s specific lending situation. And, with new homes there is no home inspection, so the closing is fast and efficient.
Resale value: Your buyer may plan to live in his or her next home for many years, but at some point most people sell a home for a multitude of reasons — perhaps they are moving up to a bigger home to accommodate a growing family…. or moving down to smaller digs when children are gone…or moving across town or even across the country for another job. And when the time comes to move, a five- or seven-year old home will often be more desirable — given all the features above — than a 25-year old home at resale.
When you lay out all the reasons why your new homes are superior to existing ones, you realize how this information can benefit your sales process. For example, Charlotte, N.C.-based production builder Evans Coghill uses these types of arguments to woo buyers using the mantra “Why buy new?”—a question the company explores in an eight-part blog on its website. The article, which has been popular with buyers and Realtors, details how a newly built home can be priced in line with a previously owned one while offering greater energy efficiency and lower maintenance.
“In infill neighborhoods especially, this has helped us a great deal,” marketing director Alan Banks told BUILDER magazine. “It helps us position ourselves as the ‘New vs. Old Experts.’”
Bottom line: In almost every aspect of the home buying process, new homes have an advantage. Consider what your prospects are looking for and help them to see how your new home beats a resale every time.