Two things are certain as we enter the last couple of months of every year: the holidays are quickly approaching, and completed inventory homes must be sold and close by the year’s end. Year-end inventory homes can pose challenges to even the most experienced sales professionals, but there are certainly ways to create value with your buyer and achieve your goal of clearing out as much of your builder’s inventory.
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In the first article of this two-part series on year-end inventory, we will discuss how you, as a sales professional, can stress the value of buying, closing, or moving before the end of the year to your potential buyers. To achieve optimal results when attempting to move these sitting homes, the recipe focuses on buyer needs in our messaging, not our needs. Speaking to a customer’s needs uses the “what’s in it for me” strategy by appealing to human nature through the emphasis on the benefits we offer them.
An article from the American Association of Advertising Agencies states that we are exposed to about 600 advertisements per day, and during the holiday season, this number is even greater. Therefore, it is critical that we respond in a clear, quick, and compelling way to the unspoken “what’s in it for me” question when customers view our websites, see our marketing flyers, or visit our model homes. What is “in it” for customers to buy, close, and move before the end of the year?
More for Less
If you can offer an incentive, this most often translates to value. A contribution toward closing costs or a no-charge upgrade that can still be added (fencing, window coverings, appliances, etc.) results in tangible savings to the customer. If we offer such incentives, customers can save cash on out-of-pocket costs, reduce their down payment, or lower their monthly payment.
Building Equity
Several sources, including Zillow, Home Buying Institute, and Freddie Mac forecast continued increases in home prices into 2020. Buying a home now could contribute to equity-building potential sooner than later. This can be a huge advantage for many people, so it’s important to stress this factor.
Interest Rates
Interest rates are expected to remain low through year-end, below 4%, according to Freddie Mac’s September 2019 Economic Forecast. Purchasing a finished inventory home versus a to-be-built home means that the close of escrow is determined only by the financing timeline, which is typically 30 to 60 days, not the build cycle of the home. This coincides with the traditional 30-to-60-day, no-fee interest rate lock offered by most lenders. And what’s the benefit? No increase in the anticipated monthly payment.
Tax Deductions - Renters Turned Owners
Whether the customer is a first-time homebuyer or renter looking to own again, the appeal of tax savings for this year are very real. Inform customers that per IRS publication 530, homebuyers may deduct certain closing costs when they file Federal tax returns, including points they paid, property taxes, and mortgage interest.
Less Competition
During the winter season, there are traditionally fewer home shoppers. This can mean fewer encounters with “bidding wars,” which translates into less stress and potentially less spend for buyers to get the home they love.
Home-to-Close Buyers
If a customer has sold his or her home in pursuit of moving into a new one, purchasing a finished inventory home may eliminate the need to move twice in anticipation of the completion of their newly built home. This can completely eliminate the unwanted stress of relocating more than once, and this is a huge incentive for many who just want to find their true home.
Convenience in Being Home for the Holidays
For a cash buyer or customers who have already started their financing process, purchasing a finished inventory home can very well put them into their new home in time to celebrate the holidays. Now that’s exciting!
While selling your year-end inventory homes is never going to be an easy task, it doesn’t have to be extraordinarily hard either! As detailed above, there are plenty of advantages to purchasing, closing, or moving into a home before the end of the year; it is very possible to stress the value of purchasing your year-end homes. Happy selling, everyone. Let’s finish off the year strong!
