No? Then why do we let buyers think that used homes are such a great deal?
How to use the “pain at the pump” to pump up your sales!
I’m taking a one-month break from my “8 Ideas for 2008” series to talk with you about a subject that’s on everybody’s radar these days – ENERGY.
With any market downturn comes a great opportunity to expand your business in new areas. Right now, if you are not repositioning your business to focus on energy, you are missing the boat! Our industry is historically slow to change, but for those of you who are open to some new ideas, this is a subject you want to jump on.
How long do you have to watch the news, read the paper, browse the Internet or listen to the radio before you see, read or hear something on fuel prices? The answer is, don’t blink. With skyrocketing fuel prices on the minds of nearly everyone today, we have an incredible opportunity to use this mindset for selling energy-efficient homes and remodeling projects. As with anything else, it all depends on how we present it to the consumer.
More than saving the planet green, let’s talk saving some greenbacks.
Price vs. Cost
We all have a story about trying to save money only to have it cost us more. My story is about a stupid hose reel (really, I’m not bitter). A few years ago, I visited my local garden store to buy a hose reel. There were three kinds: the $40 plastic model, the $60 tougher plastic model and the $85 steel model. Of course I figured I could get by just fine with the $40 reel and promptly purchased it and brought it home.
About two months later, as I was reeling up my hose, I heard a “snap” and the plastic handle broke off. Hose reel number one landed in the garbage can.
So back I went to the garden store to purchase the $60 tougher plastic model (much stronger I figured), brought it home and put my hose on it. That worked for another summer, and the following year “snap”- hose reel number two ended up in the garbage can, too.
Now if you’re keeping track, I have “invested” $100 in reels so far, and I still don’t have anything to hang my hose on. Twice I bought on price, but paid a much higher cost than I would have had I originally purchased the $85 steel model. I still haven’t bought my next hose reel, because I am too ticked off at myself!
The used home and the SUV
If you’ve been paying attention to what $4/gallon gas has done to the automobile market, specifically light trucks and SUVs, you know anyone trying to sell these types of vehicles is taking major hits. The Toyota Prius Hybrid has emerged as the top selling vehicle in America getting nearly 50 MPG on the highway. But is the Prius a low-price car or a low-cost car?
What the Prius has going for it is frequent fueling. Most of us must fill up our vehicles each week brutally reminding us of the fuel cost realities. What’s a consumer to do? Trade in the SUV, take a bath on it and buy a Hybrid, no matter what the price, because now we have lowered our ongoing cost.
Used homes are just like SUVs that get 10 MPG. They were designed during a time when energy was cheap, and they no longer fit the reality of today’s energy prices. So if you don’t show a home with a radical alternative – like as the Prius does for cars – you will go the way of the SUV and be forced to massively discount to sell your homes.
It’s already happening…
Here is some information from a recent NAHB newsletter:
According to a survey, remodelers have installed a number of efficiency-enhancing products in recent months, including:
– Windows – 73 percent of surveyed remodelers installed more energy-efficient windows that are insulated to prevent outdoor heat exchange.
– Insulation – 65 percent made upgrades such as insulation replacement and spraying foam or fiber insulation into enclosed walls and roof cavities, while 27 percent insulated foundations and 52 percent installed insulated exterior doors.
– High-efficiency HVAC systems (56 percent)
– High-efficiency kitchen appliances (47 percent)
– Water-saving faucets and fixtures (46 percent)
“Newer technologies are also quickly gaining in popularity,” says said NAHB Remodelers Chairman Lonny Rutherford. “Thirty-five percent of remodelers reported installing tankless water heaters, which save on energy costs by heating water on demand instead of continuously eating energy.”
For more information about remodeling, visit www.nahb.org/remodel.
Would you buy a home that is a major energy guzzler?
According to the U.S. Energy Information Administration, residential buildings alone account for 21% of the nation’s energy consumption – nearly as much as transportation (27%).
If your buyers are spending almost as much on natural gas, electricity and water for their homes as they are in fuel for their vehicles,
you need to do what Toyota has done –
become the beacon of hope for beating high energy costs.
Here are some steps to capitalize on this opportunity:
- Educate yourself on energy-saving ideas. Read everything you can. Take classes. Ask your suppliers and trade partners what products they have for saving energy. Look to the NAHB and your local HBAs for guidance.
- Build an energy package or several energy packages. Most of you are familiar with option bundles. Create 1-3 energy bundles and show the energy savings of each as a percentage and dollar figure. Sell them as an investment in reducing monthly costs and enhancing resale value.
- Promote your energy package under a third party such as Energy Star. www.Energystar.gov is a great resource to help you get started. Your energy package will have instant credibility behind a well known third party.
- Incorporate your energy package into your next model home. Don’t be afraid to take a bold step. Chances are, most of your builder competitors haven’t done anything like this yet. The key to promoting an energy package is to show products and techniques your buyers can see, touch and feel.
- Talk about your energy package on your website. Devote 1-3 pages on this subject alone. Speak as an expert!
What will your buyers be looking for, a used home with 10 MPG or a brand new home with 100 MPG?
We already have a leg up on the used home market. Most people would rather own a brand new car or home if they can logically justify the price. Our job as salespeople and marketers is to use the pain at the pump as a reason to consider a new home for all the cost savings.