What do you say to a buyer when they ask you, “What are your deals, discounts and incentives?” Don’t give them a value, give them a description of your value proposition. We have an impressive home, fantastic location, phenomenal schools, spectacular customer service, we’re an Energy Star builder, we have a lot to offer. Not only that, but when you find the specific home to fit your needs, we can talk about some tremendous financing incentives for you. The dollar amount means nothing without the value proposition.

The best way to deal with people who push for a dollar amount before exploring the community is to say we have nothing that applies across the board. Our incentives vary from home to home. We’ve got something special for each and every home, what we need to do is go out and pick out a home for you. This is how you hold the incentive as a closing tool.

Posted In: New Home Sales Training

Tags: closing tool, Deals, discounts, incentives, New Home Sales, one of a kind home, value proposition

We’ve only scratched the surface of Deals, Discounts and Incentives. You already know that it’s a closing tool, not your opening statement. The cardinal sin is giving them the incentive prior to them selecting a unique, one of a kind home to fit their needs.

Here’s what happens when you don’t have a planned dialogue, you don’t have a planned reaction, or you just don’t know what to say. Here’s the incentive inadequacy. You must be able to stand up to that awkward question, “Hey what kinds of deals, discounts, and incentives is the builder offering?”

You can’t give a good deal on a new home if the buyer doesn’t have a basis of value for the item. I could offer you a great deal, $75,000 off that home over there, but if it’s not the home you want, then there is no value in the discount. That’s why the buyer has to pick something out before you give the incentive. Remember hold the incentives back, they are a closing tool. You can’t give someone a deal on something if they haven’t already determined the value.

Posted In: New Home Sales Training

Tags: Deals, discounts, incentives, new home, New Home Sales Training, value

Your competitors are conducting a Home Buyers School. Every time a buyer walks in your competitors’ models they are given all these incentives. This is why when your prospects walk through the doors they ask, “What kind of deal, what kind of discount, what kind of incentive can you offer me?”

In new home sales, regardless of whether you are offering a deal, a discount or an incentive, it’s a matter of when you present it. The classic mistake is giving the incentive before the prospect actually picks out a home. You must get down to the one of a kind. There is no such thing as a blanket incentive. If you give your incentives too fast you are blowing the negotiation.

Incentives are closing tools, not your opening statement. The buyer has to have a basis of value before you give the incentive. Giving the incentive before they see the home, is like spilling the popcorn in the lobby before starting the movie. Remember part of the new home sales process is about getting down to that one of a kind.

Posted In: New Home Sales Process

Tags: Deals, discounts, incentives, New Home buyers, New Home Sales, New Home Sales Process

Jack, a young builder who lived with his widowed mother, was struggling financially. Someone told him that, if he built 50 homes and offered loads of incentives, he could make lots of money. So, he built a street of model homes and brought in salespeople to handle all the buyers they would attract. He sold ranch-style homes. He sold two stories. He sold split-levels. He built and sold so many homes that he climbed to the number-one position on the list of top ten builders in America.

He had prestige. He had an outstanding reputation. He had accolades from buyers who loved his homes. What he didn’t have, however, was money. His unpaid subcontractors were talking about getting liens against his homes. His salespeople did nothing but harp all day long about needing more incentives … more discounts … more advertising so they could attract more buyers. If only he could find some magical beans (or perhaps a carton of solid gold Egg-land’s Best), he could relieve the financial pressure.

Jack didn’t know what to do until he read a blog post that said, “It doesn’t do you any good to sell homes if you aren’t making a profit. Stop thinking like a salesperson and think like a business owner.”

“So that’s what I’m doing wrong,” Jack said thoughtfully. ”Well, I can’t go back and start a new beginning, but I can start today and change the ending.”

And that’s exactly what he did. Jack stopped thinking like a builder and began thinking like a businessman. He realized the bottom line had not been his top priority. After restructuring his pricing, evaluating his homes and refusing to allow his salespeople to discount, Jack saw his profits increase.

He became a successful builder with a healthy profit margin and a solid investment portfolio. He no longer had to live with his widowed mother. His accountant married her and they moved into a nice condo on the water that Jack built.

The Moral: It isn’t how much money you make, it’s how much you keep that counts. Business people think long-term. They don’t just plan for the next sale; they plan for how much profit they will make on the next sale.

Posted In: new home sales management, Personal Development

Tags: advertising, builder, incentives, model homes, profit

Once upon a time, a new home salesperson was happily skipping through the wooded common area of a local neighborhood with a basket full of brochures. Along the way, she encountered Mr. Wolf.

“What have you got in there?” he asked, peering inside the basket.

“Some brochures that describe all the features of the absolutely lovely new homes I’m selling,” the petite Ms. Red replied.

“Where is the community located?” Mr. Wolf asked.

“Right next to the county’s septic system plant, which could be a downer I suppose, but the homes really are quite lovely. Would you like to see them?”

“How much are they selling for?” Mr. Wolf asked. “They must be bargain priced in that neighborhood.”

“Only $400,000 for a three-bedroom, two-bath home,” she replied. “Did I mention they are absolutely lovely?”

Mr. Wolf rubbed his hairy chin, then said in a not-so-big voice, “Wow! A bit steep for that neighborhood, isn’t it?”

“You think so? But there are trees … lovely trees … all over the yards. For some reason, they grow quite tall in this community,” she replied.

“Yeah, well, I think I’ll pass. What else you got in the basket?” Mr. Wolf asked.

“Oh, just an iPhone I’m taking to my grandmother. She lives on a farm nearby,” Ms. Red replied.

“Hmmm, I’ll tell you what. If you throw in some incentives and a hefty discount, I might be interested in focusing my big eyes on those lovely new homes you’re selling,” Mr. Wolf said.

“Really!? We may be able to work something out. The builders are very motivated. Here’s my card. Call me and we’ll set up an appointment,” Ms. Red said merrily before skipping away.

The Moral: Don’t give away the farm just to sell a home. Instead of trying to compete with other builders by offering incentives and discounts, identify your problem. It’s either the place (location), the product (the homes), the price (too high for the market), the process (your sale’s technique) or the person (your buyer isn’t qualified). Then rethink…revise…react. Just don’t retreat.

Posted In: New Home Sales Training

Tags: builder, Discount, incentives, iphone, New Home Sales

Come to the edge, he said.
We might fall, the people cried.
Come to the edge!
It’s too high!
COME TO THE EDGE!
They came.
He pushed,
And they flew.

I beckon all builders to come to the edge. Stop worrying about discounting, incentives, sales events, competition. Leave all that behind and come to the edge … to the place where you draw the line and say, “I’ll go this far and no further.”

I won’t continue competing against builders with sharper pencils than mine. I won’t keep justifying the prices of my homes instead of selling buyers on their value. I won’t keep making excuses for why I’m not turning a profit. I am the producer of my circumstances; not the product of them.

I won’t allow others to define my business. I will write that definition myself. It won’t be easy, but I will take a stand on the edge … and I will fly.

Posted In: new home sales management

Tags: builder, competition, discounts, home value, incentives

Taking control of your sales can be like trying to round up a pack of stray dogs. Without a strong leader, they will head in any direction. Dogs need to be controlled by someone with a calm, focused mind, who is steadfast and has a strong sense of determination.

When your sales run wild, your salespeople can become frustrated and overwhelmed trying to figure out what to do next. Should they offer incentives? Should they negotiate more? Should they discount the home? How will the buyers find your model homes? Is there an online marketing strategy to attract potential buyers?

They need a clearly defined set of expectations … a plan of action. Understanding what breed you are as a builder is the first step towards giving them that. The question for you is: Are you a dying breed or a breed apart? Are you old-school, relying on yesterday’s outdated methods to attract home buyers, or have you developed your own brand? Step out from the pack and say, “Enough! Enough discounting. Enough incentives. Enough justifying my prices!”

It’s time to take charge and acknowledge that you’re in business to make a profit … not just sell homes. Be the new generation builder who works within a system and can make a profit regardless of what the market is doing, which way the economy is heading, and how many builders are throwing in the kitchen sink.

Posted In: Leadership, new home sales management

Tags: builders, Deals, discounts, economy, incentives, leadership

When profits and sales drop, a naive mindset fills the void. Builders start thinking they need to sell more houses and offer more discounts to make up for the loss. So they offer jaw-dropping deals. Incentives. Promotions. Special sales. Discounts. Event sales. A whole bag of tricks to lure buyers. And what happens? They sell more homes, but make less money.

Most builders say, “Hey! I’m a builder. It’s what I do.”

I understand that, but you must also be heavy into sales and marketing or you won’t be around long to do what you do.

Building and selling homes at a discount isn’t a viable strategy. That’s why, at some point in your company’s growth cycle, you have to determine, “Is my company being market driven or sales driven?”

How do you know which one it is?

Think of your company as a boat anchored in the harbor beside 100 other boats. When the tide rises, all the boats go up. When it falls, all the boats drop with it.

The housing market is like tidal water. It goes up and down. If your company is governed by the market, it will follow the ebb and flow … rising and falling just like the other boats.

However, if your company is sales driven, you will pull anchor and leave for more favorable waters. Instead of trying so hard to steal buyers from other builders whose ships are anchored with yours, you will find buyers in areas that other builders have neglected. You will show in places where buyers least expect you. And you will attract buyers from the tidal pool because you have a superior sales and marketing organization.

Don’t be lured and lulled into believing that discounting is a smart marketing tool. If there’s a hole in your business that’s leaking profits, you won’t plug it by being gullible and thinking your can discount your way to profitability. That’s like rearranging the furniture on the deck of the Titanic when it’s sinking. It’s wasted effort.

Posted In: New Home Sales Coach, New home sales marketing

Tags: builders, Deals, discounts, incentives, profitability, sales and marketing, selling homes

As I told you last week, in our current market situation, prospects will almost always be skeptical and apprehensive because of the media’s negative messages concerning the real estate market. So, you can count on prospects starting conversations with one of the "Three Predictable Questions." Sometimes they ask just one of the questions; most of the time they’ll ask all three. They are:

1. Why should I buy in this down market?
2. What kind of deals or incentives do you have to offer?
3. We’re not buying today can we just look?

This week, I’ll share with you how to answer question #2:
WHAT KIND OF DEALS OR INCENTIVES DO YOU HAVE TO OFFER?

"I’m so glad you asked! We offer impressive homes, a wonderful location, incredible schools, fantastic customer service, and we are an energy star builder. We have a lot to offer. We don’t offer any incentives that go across the board, since our incentives vary from home to home and will depend on the particular home you select. They can be substantial but will depend on which home you choose and when you choose to purchase. The first step is to select a home you really like, and then we can discuss the incentive as it applies to the particular home you want."

CHECK BACK NEXT WEEK FOR PART 3 OF THE THREE MANEUVERS.

Posted In: New Home Sales, New Home Sales Training

Tags: buying, down market, incentives, New Home Sales Training

ANSWER MANEUVER #1:

In today’s economy, every prospect enters the door a bit skeptical and apprehensive, primarily because of their normal dose of buyer’s-remorse-in-advance, and also the media’s negative messages concerning the real estate market. You can count on prospects starting conversations with one of the "Three Predictable Questions." Sometimes they ask just one of the questions; most of the time they’ll ask all three. They are:

1. Why should I buy in this down market?
2. What kind of deals or incentives do you have to offer?
3. We’re not buying today—can we just look?

This week, I’ll share with you how to answer question #1:
WHY SHOULD I BUY IN THIS DOWN MARKET?

"Because it’s simply an unbelievable time to be considering a new home. Allow me to explain: We have a stunning selection of homes or homesites available, and our builder or developer has aggressively priced the homes/homesites to create real value. In addition, interest rates are at an all-time low and the financing terms available today make home ownership extremely affordable. So it’s an unbelievable time to be shopping for a new home." BUT THE MEDIA ARE SAYING THE MARKET’S CRASHING! "Mr. or Ms. Prospect, what the media are talking about are National statistics. What’s being reported does not apply to our marketplace and/or neighborhood."

CHECK BACK NEXT WEEK FOR PART 2 OF "THE THREE MANEUVERS."

Posted In: New Home Sales, New Home Sales Training

Tags: downmarket, incentives, maneuvers, New Home Sales Training