We have been busy with all of the recent Specindex New Home Marketing 2.0 Updates - but wanted to share with you the passion behind our need to re-invent the "Home Builder Marketing Wheel".
Here is a video I found on Youtube that demonstrates how many new home buying prospects might feel about the current "Carnival of New Construction Home Buying Incentives," being offered by home builders to reduce swollen spec home inventory lists:
Listen to the "angst and sarcasm" in the content creators voice...
This consumer driven, self-made editorial refers to the Houston Housing Market - one of the strongest residential construction markets currently remaining in the United States. The points made by the creator of the video commentary may not reflect what is going on in the minds of your prospects today - but what about tomorrow?
What if your prospects are not buying their new home from you because of your home selling tactics?
Is it possible that your target market has grown up - beyond the reach of cheesy buyer incentives and false bottom feature promotions?
The Specindex is the self-service, automated, online marketplace, where New Home Sales and Marketing experts socially network with Real Estate industry professionals to increase their new home sales.
15 Comments on Home Builder Advertising: New Home Prospects Tired of Incentives?
Lance, stop that. The incentives that builders are offering (because they have the bucks to do it) are short lived. While the incentives may seem extreme, they nonetheless cost the builder. New home buyers are not tired of it, because until the subdivision sells out, they're carrying inventory. Builders do not like that. That they'll drop things to cost is the economy, not the builder.
How in the heck are these builders still able to get away with this? This is a RESPA voilation if their ever was one. These invesntives are usually awarded outside of the closing, a total no-no. Even if the builder has their own builder, Freddie and Fannie would not approve.
It seems a lot of buyers get turned off to the changing incentives. It makes them feel as though if they buy now, tomorrow the incentive might be better. So instead of encouraging sales, sometimes incentives seem to actually slow them down.
New home incentives are the smartest marketing program in real estate. New home builders in my market are leading the market in getting the bloated prices down.
Great message! I have had such bad experiences with large builders particularly about my own agent "incentives" of $5000 bonuses. Isn't any incentive for us to steer buyers against our code of ethics? Realtors should never be offered incentives...it's simply against our fundamental responsibility to our buyers. And as for buyer incentives...I agree, just lower the price! But they don't want to do that because it will hurt the "comps" for their subdivision.
Funny post. I think incentives are just plain silly. How many people have you helped that decided on a home because they got a lap top? The video to me is less about incentives and more about the ineffectiveness of print advertising in todays world. Consumers in general are becoming more educated in all areas, real estate included. Traditional marketing techniques and slogan driven campaigns are a bigger turn off for tomorrows buyer. Generations X and Y don't even see whats printed on those pages...
Diane- I have to suggest, with apologies to Lance, that offering incentives is in not in any way steering. If a real estate agent "steers" a client to a home that is inappropriate for the purpose of a bonus, that is the direct fault of the agent, not the builder.
I agree.....here it's all about throwing in the upgrades. I can understand why they might not want to cut the price. If they did, all the people that bought homes at the regular price would not be happy. It's a tough situation to be in. But they should have thought about it befoer they built some many homes!
I think it is great that I have something to offer my clients as far as incentives go. It allows them more options on the type of home they will eventually purchase. I have seen everything from granite counter tops to all closing paid for. It makes my job a lot easier. Also it does not hurt that they are offering 6-10% compensation to the agent. Model home tour anyone?
If the builders would completely take away incentives, it would force them to live or die by their product and sales force. For any builder that has confidence in those two things, they should not fear removing incentives.
Incentives are a cost and add to the higher price-per-square-foot of each home. Every builder has to ask themselves: Will this "free" BBQ Pit or Laptop bring more qualified buyers to our model homes than a lower-price-per-square foot on the MLS and a dozen other real estate websites?
I believe the answer to that question is going to be a big "NO" 9 out of 10 times.
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Lance, stop that. The incentives that builders are offering (because they have the bucks to do it) are short lived. While the incentives may seem extreme, they nonetheless cost the builder. New home buyers are not tired of it, because until the subdivision sells out, they're carrying inventory. Builders do not like that. That they'll drop things to cost is the economy, not the builder.