Take Two and Call Me

A young man goes to a doctor, climbs up on the exam table and says, “Doctor, I don’t know what’s happened to me, but I have become a compulsive thief.”

The doctor gives him a thorough examination and finally says, “Here. Take two of these pills every day for two weeks. If you’re not cured by then, come back and bring me a 60-inch plasma TV.”

It’s time to break a bad habit. Stop giving home buyers discounts, incentives and wide-screen TVs.

I know. I know. Everyone’s doing it and it’s human nature to go with the flow … to match whatever your competition is offering in order to sell your homes; but you’re handicapped because you have no idea how low your competitors can go or how desperate they are.

Have they received an ultimatum from the bank? Are they forced to meet a take-down schedule? Do they have spec homes on the market that they must sell in six months? Is their company going into bankruptcy? Is there an urgency to get these homes off their books? Or do they simply want to sell the final two houses at whatever cost so they can move on to the next project?

You just don’t know. That’s why I say that your profit margins are only as good as your most desperate competitor. You have no idea what is motivating other builders to offer discounts and incentives, so don’t try to match them.

To quote Leonardo da Vinci, “He who can copy, can do.” Stop copying other builders. Do profit from their mistakes

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