This is a question that is the primary topic of discussion for a week or two after the annual Builder’s Association of the Twin Cities Fall Parade of Homes. This conversation happens all over the twin cities, east to west and north to south. Inevitably the conversation goes something like this:


Builder #1: How was your Parade?


Builder #2: Traffic was way down from previous years the buyer quality was poor. Everybody coming in to the models was just killing time. We got a couple of leads but they don’t want to do anything until next year.


The funny thing is this exact conversation happened this year and many years previous to this (when times were considered good!). It seems the answer to this question is determined on the attitude of the salesperson and what they relate back to their builder. Yes, traffic was down. Yes, there was some poor quality traffic and yes, many people said they wanted to wait until next year. But the difference between a good and bad Parade is not what happened during the event, it’s what the salesperson does after the event with any leads they captured (no matter how few they are).


Creating Urgency  

Creating urgency is the difference maker. As salespeople, we must come up with some strategies to create urgency now and convert some of our leads to move ahead today, with our builder and not wait until next year. Try this idea:


Figure out your rate of sales for your builder, the entire neighborhood (all builders), the submarket and if necessary, your local market. Here is the idea; we must show activity even if it seems we have none.


            a. Your builder– How many homes have you sold this year. Now calculate that on a weekly basis. Most of us are going to find we are selling too few homes to use this statistic with a prospect. If so, go to the next area, the entire neighborhood.


            b. The neighborhood (all builders) – Calculate the same statistic for all the builders combined and break it down to the week. If you can say that the current rate of sales in your neighborhood is one a week or more, this will create some urgency. If this still doesn’t work, go to the submarket.


            c. The submarket– Calculate the rate of sales of all the homes in your neighborhood’s price range within your geographic market and break it down to the week or better yet, the day. Let’s say your neighborhood ranges in price from $350,000 – $500,000. You research the MLS and building permits and find out in your city (geographic market), there have been 30 sales (used and new) reported on the MLS. The city has issued 50 building permits and there are currently 25 homes for sale, brand new, in the market. Subtract 25 from 50 and add the 30 MLS sales and your total sales in the $350,000 – $500,000 submarket is 55. Let’s say we are 40 weeks into the year. 55 sold homes divided by 40 weeks equals 1.375 homes a week. If this number still doesn’t look that attractive, go to the entire market.


            d. The market– Calculate all the MLS sales and pre-sold building permits in your geographic market (used and new, using the same guidelines as above, and convert this to a weekly, or better yet, daily rate of sales.


Sample Script  


Salesperson: Mr. and Mrs. Customer, (name of neighborhood) is located in the city of _______________ and the _____________ school district. (Name of city) is very active as a home is sold every (hour/day/week).


Use this script when you are presenting an overview of the community or neighborhood. Even though your sales may be slow, you need to communicate that homes are selling in your neighborhood and/or community. Subconsciously, this tells the customer that yes, people are investing in your community and yes, homes are selling.


During follow-up calls, make sure you are relaying new sales in your submarkets and markets to your prospects. Give them a snapshot of what happened over the last month. Tell them why it makes more sense to move ahead today vs. waiting (best selection, value, lifestyle, interest rates, incentives, etc.)


A Parting Thought


Careful consideration needs to be given to today’s customer. They read, see and hear many negative messages from the media on the state of today’s housing market. They see many unsold homes in their current neighborhood and hear about huge discounts many builders are giving to sell homes. On one hand, they love the thought of buying but are terrified at the thought of selling. In other words, today’s buyers are more confused than ever. The knee jerk answer we receive when we ask about timelines is, “a year or two” or, “we’re thinking about it.”


As professional new home sales people, our job is to bring clarity among all the confusion. Keep careful tabs on your submarket and what is, and isn’t selling. Find out why homes sell and bring that information to your builder. Help prospects get an accurate assessment of their current home; what it is worth and how long it will take to sell. This next year will continue to be a difficult year as we sell inventory. The bottom line is, however, this inventory will eventually sell off and our market will regain balance. Many submarkets have about 12 months of new home inventory and when they are gone, they are gone. The best opportunity to buy a new home in the last 15 years is right now through the end of 2007. Developers are not buying and developing land, builders are not building more spec homes or buying lots. We are actively selling and the values have never been better.

Finally, make sure you relay this thought to your customers: Buying a new home is not about getting the lowest price or the best deal. Buyer’s today are so focused on price that they forget why they are in the market in the first place. People buy brand new homes because of what the community, neighborhood and home will do for their lifestyle. We get so focused on the sticks and bricks that we forget the true motivation of the buyer; to make things better on a daily basis for them and/or their family. We need to remind our customers of this and when we do, I’ll bet you will bring some clarity, help some people make a good decision and get a home sold at the same time.