What did we learn about new home sales in 2022? It was a tough year. Which says a lot after the planet endured a pandemic in the two years prior to that.
I don’t believe in making New Year’s resolutions. They’re too temporary. Instead, I like to look back at the past year and figure out what I can learn from the experiences. Then, I move forward and keep the past where it belongs.
Lesson #1: Hang in there.
Every situation is a temporary one. Good or bad, things change. When we entered the pandemic in early 2020, we faced a mountain of obstacles. Simple things—like buying toilet paper and going to school—became major challenges. We also thought no one would buy a home in the midst of this chaos.
We were wrong. A horrible situation for the country turned into a massive opportunity for builders and new home sales professionals.
Then, it all turned around in early 2022 when the pandemic subsided. The market tanked. Interest rates rose. Inflation sparked fear. The urgency to buy a home had fizzled.
That was last year. Now, we’re in 2023. I’m not saying the world, the economy, our jobs, and our lives will suddenly be kissed by unicorns.
Life is a series of ups and downs. Some are higher and lower than others. All we can know for certain is that it’s all temporary.
Lesson #2: Don’t wallow. Respond.
It’s all too tempting to take the hits and fall down. You feel pummeled.
“No one is buying in this market.”
“I can’t fight the rising interest rates.”
“Our prices are too high.”
Look at each statement. They’re only partially true. Sure, you could look at them with your glass-half-empty view of the world and give up. Or you could look closer and see the possibilities.
People ARE buying in this market, but not with the same energy. You have to work harder to understand who is buying, along with why and what they’re buying. Dig in. Ask the right questions, and more of them. I’ve known many new home sales professionals who thrived in housing market downturns, making sales in spite of higher interest rates, because they were true professionals who could navigate objections and confidently sell their homes.
Interest rates aren’t ideal but you CAN fight back. You just need to know how to discuss interest rates with your homebuyers. Use the solution of an interest rate buydown, combined with the reminder that refinancing is always an option for later. Buy now to get the current housing prices, which will keep rising. It’s all in the dialogue. And your confidence. And your negotiation skills.
Are your prices really too high or have you simply not convinced the buyer of the value? Look carefully at your homes, the competition, the incentives, and the cost of concessions. Anyone can drop their prices. It takes business intelligence to maintain profitability. Remember, a price reduction subtracts from the home’s value. An incentive adds to it.
And I say “respond”, don’t confuse it with “react”. A response is carefully planned and executed. Think carefully about what’s really holding you back. It’s probably you.
Lesson #3: People will always buy homes.
Buyers have their own reasons for buying a new home. There are common denominators but the underlying motivation is unique to them. It’s your job as a new home sales professional to uncover their reasons and to measure the intensity of those influences. Don’t push upgrades at someone who isn’t already in love with the home. If you work a little harder, you might discover that all they need is to appreciate the quality of the home in comparison to the competitor’s.
Your buyers love to talk about themselves. Ask more, talk less. Listen actively to what they’re telling you. How does this knowledge provide you clues to how you can sell a new home to them? What is at the root of their uncertainty? And how can you instill confidence?
It’s not up to a buyer to buy from you. It’s up to you to demonstrate why it’s their best choice.
Lesson #4: Your education never stops.
I love learning. I’m always listening to podcasts and audiobooks, checking out webinars, watching videos, and reading books. If I gain one good idea, insight, or inspiration from each effort, the return on investment of my time is a great one. When we share the wisdom, we expand the lives of others.
Keep pursuing ways to learn. Ask your friends and colleagues to share their favorite podcasts, books, media, videos, TED Talks, websites, etc. Offer yours to them. And keep a list.
Lesson #5: Buying and selling is a predictable process.
There’s no valid excuse for being unprepared to sell a new home. Objections are predictable. Price resistance is predictable. Negotiation skills and tactics are predictable. That means you have advanced knowledge that you can put to use. Practice your response to objections. Team up with other new home sales professionals to role-play.
More importantly, invest in learning to negotiate effectively. Dig into the intricacies of how to negotiate a sale, in any market, with any buyer. Your sales career depends on your negotiation skills. Don’t skimp. There are no shortcuts to success.
What were your most valuable lessons learned with regard to new home sales in 2022? Please share them, so we can all benefit from each other’s experiences.