Incentives are a price apology.

In new home sales, when the going gets tough, the tough get going and negotiate. The others throw out incentives like confetti. These concessions are an act of desperation. Incentives are a price apology.

Is that the message you want to communicate to a buyer? Whoops. I seem to have misjudged the value of this new home. Here, let me fix that by making a concession. That’s a price apology.

New home sales professionals should be focusing on selling homes that support their builder’s bottom line. Yes, the market is tough, but what I’m seeing is that negotiation—not incentives—makes the difference when selling new construction homes. Those new home sales professionals who have invested in actually learning to negotiate are closing deals without sprinkling incentives.

In the competitive Dallas-Fort Worth market, one builder is offering to pay off car or boat loans in order to make the monthly mortgage payment more affordable—clearly not understanding the fundamentals of price resistance. When a homebuyer shared that incentive with a new home sales professional for another builder, the agent responded, “And why do you think they’re doing that?”

“Because they want to sell the home,” the prospect replied.

“And why are they having difficulty selling their homes?”

There was a pause as the buyer reflected. 

“Listen, we don’t offer incentives and we don’t discount our homes because they are priced fairly,” said the new home sales professional. “We also want to protect the value of the homes that we’ve sold. We have a commitment to the people who have bought homes in this community and we won’t compromise that to make a sale.”

The buyer signed a contract that afternoon.

This builder’s policy does not provide for incentives, because they recognize that an incentive is a price apology. The sales team, therefore, has learned how to sell without tossing that confetti at their buyers. Can your team do the same? And if they can’t, what is it costing you?

Learning to negotiate

With successful negotiation tactics, both the buyer and the new home sales professional walk away happy. The buyer is excited about the home purchase and believes they received a good value. The new home sales professional knows they have served the interests of the builder and guided the buyer to the right purchase.

Both sides want something. In new home sales, you need to invest the time in finding out what truly matters to the buyer. When you discover that motivator, you frame your negotiation to play to that goal.

Negotiation, done skillfully, will not only help you get what you want but will also help others get what they want—a good, old-fashioned win-win.

I’ve been reworking my book, “Secrets of New Home Sales Negotiation: How to Achieve ‘Yes!’ Every Time”. In updating the content, I’ve discovered that a lot has changed in the 11 years since I wrote the first edition. We didn’t have the virtual platform to the degree it is today. In addition, at that time, we were just starting to come out of a recession. Those who had mastered negotiation skills were thriving. The others went on to different careers.

What HASN’T changed, however, are the tactics of negotiation.

I challenge all of you new home sales professionals to become better negotiators and stop relying on a price apology to sell a home. If you need help with sales training, let me know.

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