With the year coming to a close and the holiday season vastly approaching, many homebuilders across the country have yet to shut their books on the year and are still maintaining a sharp focus on their remaining inventory. They understand that there is a direct need to sustain a steady sales pace to bolster this year’s net sales total, while also ensuring a strong first quarter of closings to start 2020. In the second article of our two-part series, we will talk about best practices for creating value around inventory homes.
To view other parts of this article series, click on the links below:
As the pressure mounts with each passing day, builders risk pulling the price lever prematurely and consequently compromising profitability in order to drive year-end unit count. Adopting a “desperate times requires desperate measures” disposition is certainly understandable when trying to capture the attention of a last-minute, deal-seeking buyer. However, there is also the approach of creating a compelling identity around a particular inventory home that would not only cast appeal to that same buyer but do so in a manner that leads them to value more about the home than merely their own perception of savings derived from a significant price reduction. This is accomplished through the creation of a unique selling proposition.
An effective unique selling proposition builds exclusivity around an inventory home by incorporating distinctive features and highlights that ultimately convey a “right place, right time” feeling to a prospective buyer. And if that prospective buyer is influenced by this unique selling proposition in a way that truly enables them to feel they are in the right place at the right time as it pertains to their new home search, then it’s conceivable that the value they place on that inventory home is too much to walk away from. While this concept may sound like homebuilding’s version of snake oil, the process of creating this unique selling proposition is very fundamental. At the heart of this process is identifying the most relevant and distinctive features and highlights by evaluating the home through a lens comprised of the following elements:
- Floor Plan: Is there anything about the layout of the home that is unique in comparison to its peers in the marketplace? If so, how can this be valuable for your TCG?
- Homesite: While a floor plan can be built many times over, a homesite is truly one of a kind. The actual location of the home can drastically impact a customer’s perceived value.
- Price: Does the sales price or price per square foot set this home apart? Is your pricing more affordable than the competition? If not, are you stressing the value of the home that warrants a higher price?
- View: Is the view from the backyard or living room window enough to add value to the home?
- Area/Community/Amenities: What access to the general area, community, or local amenities does the home allow for the buyer? How do these factors play a role in the daily lives of your specific customer according to what we know about their TCG?
- Quality of Construction: Is the overall quality of the home superior to other new construction homes in the marketplace? If so, how does it achieve superior quality?
- Elevation: Perhaps the aesthetic look of the home drives enough appeal to make it the right home. If this is the case, make this a point of emphasis.
- Size: Is the space the home offers ideal for the buyer’s purpose and needs?
- Color: More of an accommodating feature rather than a high-impact feature, the color could definitely be a factor in a buyer’s decision.
- Terms: A deal-seeking buyer may be swayed by the terms surrounding the home. Be transparent and informative at all points of the process.
- Orientation: There are many reasons why a buyer may value a home facing a particular direction.
- Potential Appreciation: An investment-minded buyer may favor a home that yields a significant return on investment.
- Features That Appeal to a Buyer’s Emotional Wants: All people are emotionally wired to feel and see the world in a certain way. A home with features that directly align with their wants and needs is certain to weigh in on the buyer’s decision.
- Topography: Is there any undulation or grade change that would affect the privacy or security elements of the homesite?
- Timeframe: How does the home fall in line with the buyer’s timeline?
While all 15 of these elements may not be applicable to a particular home, it is important to understand that an effective and influential unique selling proposition merely needs to incorporate a few of these elements in order to drive maximum impact and appeal in the marketplace.
Once this unique selling proposition has been crafted, it serves a purpose: Being the main messaging for a robust marketing campaign designed to drive high-quality traffic consisting of people who are likely to find the home enticing, otherwise known as the Target Consumer Group. As this group of traffic arrives at the home, the unique selling proposition should be articulated to the prospect by a sales professional to confirm that it does indeed resonate with them, creating the feeling of “right place, right time.” When our training and these practices are executed skillfully, there is a high likelihood of converting that prospect to a buyer.
In summary, rather than succumb to a generalized strategy of taking more significant price reductions than is necessary in order to move remaining inventory before the calendar turns to a new year, it is certainly worth the time and effort to thoroughly analyze each inventory home in order to identify and compile all features and highlights that form the home’s unique identity. At a time of the year when urgency has never been more important, it’s the scarcity of the offering of such an opportunity and the fear of loss it creates that drives the inventory home’s value and appeal, which ultimately leads the right buyer to arrive at the right place at the right time, culminating in one more year-end inventory sale.
