It would be very handy if home shoppers walked in the sales center door with comic strip bubbles over their heads, their innermost thoughts, desires, worries, and needs all hovering above them in easy-to-read type.
“Should we really be considering this? I’m worried I won’t have a job next year.”
“Wow! This house is huge, I don’t think we can afford it.”
“Arrrghh! Look at that orange sofa. I hate orange.”
“If we don’t find a bigger house soon I’m going to evict my mother-in-law.”
Those thought bubbles would make it much easier for sales agents to know which buyer fears to assuage, realize there’s a need for some model décor changes, and resolve to take the shopper with the mother-in-law issue directly to the model with the man-cave get-away room.
As it is, squeezing such information out of buyers is difficult even for sales agents adept at the delicate dance of extracting personal information during a casual non-threatening conversation.
Since thought bubbles or the ability to perform a Vulcan mind-meld on shoppers isn’t likely to make it beyond our fondest fantasies, Builder offers the next best thing, our annual home shopper survey courtesy of American LIVES.
Builder Magazine/American LIVES Survey 2011Download the survey and a three-year comparison in pdf format. |
The American LIVES results offer, if not a buyer mind-meld, at least a viewing window into the heads of new-home shoppers in the spring and summer of 2011.
The participants were a gloomier bunch this year, less optimistic than last, though probably no more so than the general population. Even before the U.S. debt downgrade sent stock markets on a neck-jerking roller coaster ride in August, more than half the American LIVES survey respondents said they expect that conditions a year down the road would be worse or the same, with 44 percent expecting it to be somewhat improved. Just 4 percent said things would be better.
But here’s the sunny side of the survey results. Despite all their worries about economic conditions, these people were still out shopping for a new home. Plus, half of them said they were somewhat or very serious about buying one. (And remember they answered this questionnaire AFTER leaving the model home, discounting the idea that they would give that answer to gain entry to the houses.)
On another high note, the group overwhelmingly (62 percent, up from 54 percent last year) said they preferred only a newly constructed home. Since these buyers were visiting new-home sales centers, this shouldn’t be surprising, though the percentage increase is certainly worth noting.
And, while the survey respondents said they are gloomy about the economy, 85 percent said they were not concerned or only somewhat concerned about losing their job or their partner’s job.
So the people who are showing up at your sales centers are most likely serious buyers, not the Looky Lous who cluttered up model homes during the boom years.
But here’s the catch: They have commitment issues. Of the group, 46 percent said they have been looking for a new home from three months to a year, up from 40 percent in 2010. And 21 percent said they had been looking for more than a year, up 6 points over 2010.
Why they are looking for so long is anyone’s guess, but here’s one theory. They are shopping for the best buy possible, and they keep thinking a better one might be around the corner. Their searches also are being extended because, while they say they prefer new homes, they are using Realtors who are seeking out short sales and foreclosures as well as resales, complicating the home buying process.
Given the insights offered by the American LIVES survey, we asked a number of successful new-home builders and sales managers how they are getting home shoppers to commit to become home buyers. They responded enthusiastically, offering a number of techniques that are working for them.
1. Convince shoppers that there will be no better time to buy.
“Explain that there is no gain to waiting,” suggests Ken Trainer, president of Chesmar Homes in San Antonio. “Interest rates are not going to go to zero. Depreciation is not going to continue to happen. Commodities [used to build homes] are not going to dive in price.”
“We tell them that three or four years from now the folks who bought homes today are going to be considered geniuses,” says Chip Brown, director of sales for Charter Homes in Lancaster, Pa. “You are not going to find a better time to look at buying a new home.”
2. Find out why they are shopping now, and fulfill that need.
“Folks don’t come to model homes these days unless something is going on in their lives” that causes them to really need to make a change, says Brown. “The puppy is now a dog. The baby is in elementary school.”
“The heart of the matter is figuring out how buying a new home improves their life now,” agrees Cathy Bergstrom, vice president of sales for Miller & Smith, a Washington area builder. “In people’s minds there is usually something that triggers them to go and look.” It might be a new job or a new baby or a need for more or less space.
3. Move the focus from making a deal to satisfying emotional needs.
Eighty-two percent of the survey respondents said that spending time at home with their families has become more important, compared with 75 percent in 2010, yet they come into sales centers asking about incentives.
“You try to get people away from thinking about their home as a commodity,” says Brown. “You don’t live in an incentive. You don’t live in a discount. Get them engaged emotionally in the home.”
4. Create urgency to buy now.
“We limit the number of homes that get released at a time, limiting supply,” says Bergstrom. “And we increase our prices with each group. We try to give it a sense of urgency. Not putting as much out there for sale helps focus the customer on the idea that perhaps the home they want will be gone if they wait or the price will change.”



























































