It’s not the housing marketing that’s weak right now. I know I’m going to get all sorts of pushback on this statement, so let me explain.
I admit that the unprecedented flood of eager homebuyers receded as the interest rates crested. But we were in an unrealistic market for two years, sparked by the pandemic’s bizarre outcomes, which caused the Feds to lower the prime rate, which, in turn, pushed interest rates down.
The housing market has slowed. That change uncovered a worrisome symptom in selling new homes…more specifically, in new home salespeople.
Let’s face it, no one was really “selling” new homes during the rush. With buyers ready to offer over asking price and just grateful to get a home, there was no negotiation, no need for selling skills.
Are your selling skills getting flabby?
What happens when you don’t keep up with your workouts? You lose your strength, stamina, and agility. You no longer have the heightened level of performance you achieved when you focused on maintaining your abilities.
The same is true with selling. When you go for months and even years without having to exercise your selling skills, you can forget how to do essential things, like negotiate or even demonstrate a home to a prospective buyer.
We’re now experiencing price resistance—understandably, with higher interest rates and home prices that rose during the new home selling frenzy. Today’s buyers can’t get those insanely low interest rates. That’s history, and we’ll likely never see them again in our lifetime. That means new home sales professionals must adjust their selling skills to the change in the housing market.
You need to get back to the fundamentals of negotiation, of managing price resistance and dealing with objections. The prospects who are reaching out to you right now are serious buyers. They already know the state of the market. They’ve researched interest rates, homes, pricing, communities, and probably know their mortgage pre-approval amount. They’ve ignored all those people and media telling them it’s not a good time to buy a new home.
When these prospective homebuyers come to you, they expect to be SOLD. They want you to convince them to buy a house, to give them justification for buying now instead of waiting. Are you prepared to be the one who sells them a home?
Don’t lead with incentives.
It’s predictable that your buyer is going to look for concessions. They want to negotiate the best deal they can. Your goal is to do the same for your builder.
Tossing out incentives at the very start of the discussion is 100% the WRONG MOVE. It’s an act of desperation, and your buyer sees it. When you give concessions too soon, you’re making a price apology, sending the message that you’re aware the home is not priced correctly.
Why would you offer a concession before you know what the buyer wants—which home, community, features, and price? I’ve seen too many new home sales professionals make this mistake. They welcome the buyer by saying, “We’re offering some wonderful incentives right now.”
So, they throw their closing point out too soon and when the buyer later looks for something to seal the deal, what do you have? You either concede something that you shouldn’t or tell your buyer there’s nothing more to give. Since you want your buyer to feel they’ve scored the deal they desired all along, you want to have that one incentive in your pocket to give them at the end of the negotiation. Keep that in mind when you consider offering the discount, credits, or free upgrades.
Be a better negotiator.
You know who is thriving in new home sales right now?
The pros who worked through the last recession survived the housing market that took a nosedive in 2007 and stayed that way for years. They learned how to successfully negotiate a sale. They dealt with all sorts of objections. They managed to keep selling homes through the uncertainty. They stuck with it and used their powers of negotiation to convert prospects to buyers.
Today, I hear from many of them who are recollecting those days. They have rebounded more quickly than inexperienced salespeople because of that experience and skill. The new home sales professionals who entered the industry since 2020 had not been challenged until 2022. In the rush to get them selling, the newcomers didn’t get the proper training in negotiating a new home sale. Now, they are stunned, worried, and rethinking their career path.
My suggestion to all of you sales leaders is to determine the keepers among your team. Who are the ones who can rise up to become a new home sales star? Invest in them. Provide the sales training that will elevate their success.