When showing new construction to interested buyers, the first step of the purchasing process is very important.  The easiest way to encourage nervous buyers to pull that trigger is to not require a deposit with the reservation.  Our reservations are good for 30 days with no funds paid up front, and during that period, the buyers will have the opportunity to meet with the builder, have their questions answered, walk through the model home (if there is one) with the builder and meet with all of the suppliers.  This reservation will take a property off the market for that period of time.  This gives the buyers time to firmly decide if they want to go forth and sign a purchase and sales agreement and pay a 10% deposit, at that time. 

My team members have a very good track record for converting reservations into a signed purchase and sales agreement.  That initial reservation without a deposit allows both the buyer and the builder the ability to either cancel or firm up a potential sale.  Buyers like this method because there is no pressure to buy because there are no funds paid.  Remember, the builder can walk from the deal also, if he feels their personalities do not mesh.  If the builder and the buyer are not compatible, it makes sense that the transaction not happen. 

Signing that initial reservation form is a very important part of the potential transaction.  New construction is a complex entity to sell, especially when the dwelling is not constructed and all you are showing is dirt and a set of plans.  It's one step at a time and all parties need to be very comfortable working with each other.  The first meeting is a critical one and provides a good indication of the potential for a successful transaction.

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10 Comments on New Construction Transactions From Heaven Or From Hell???

APR
08
2010
400,470 Points 35 Featured Posts Localism Sponsor Outside Blog Hit Router Attended Rain Camp

Barbara:

That is a great way to ease someone into new construction which can be very scary to a lot of people. I really like your low-pressure approach. I am sure it helps during those early phases when there is so much for a buyer to learn about the process.

 
6:42am • #1
1,519,419 Points 275 Featured Posts Localism Sponsor Outside Blog Attended Rain Camp Called Shot Master

Claudette.....as you and I both know, new construction can be and usually is a very frightening process to all buyers.....they need to be comfortable with the product, the total price and most importantly, the builder.....all marriages are not from heaven!!!
6:44am • #2
878,677 Points 75 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

In the end it all comes down to the product. If someone likes it enough they will buy. I am sure they appreciate the non pressure aproach though!
7:21am • #3
1,519,419 Points 275 Featured Posts Localism Sponsor Outside Blog Attended Rain Camp Called Shot Master

Bill....yes, but the builder may not blend with the buyers and by not taking money, he has the option of not taking the deal....there was builder in Franklin(not mine) who was sued because he deposited $1000 and wanted to return it....the buyer wanted the property....cost the builder $40k!!! that's not happening to one of mine....we don't take money until p&s is signed....then it's 10%.
7:25am • #4

Sounds like a good approach....we have a builder in our town who accepts just a $500.00 deposit and that is good until they start the construction and a formal written offer is done.....if either party wants to back out before start of construction they sign the release and the buyer has their money back rather quickly......he has been doing this for years and I guess it works for him...
8:11am • #5
1,519,419 Points 275 Featured Posts Localism Sponsor Outside Blog Attended Rain Camp Called Shot Master

Dennis....the key to that is there is a clause that says EITHER party can back out with no recourse....works the same as ours but we don't go through the steps of collecting money....why bother??
8:29am • #6
761,437 Points 61 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

As always Barbara, great information in your post.  Our builders down here require a hold deposit which does make buyers very nervous.  In light of the recent market however, I believe this policy might change.
10:22am • #7
1,519,419 Points 275 Featured Posts Localism Sponsor Outside Blog Attended Rain Camp Called Shot Master

Paula....my builders have always worked this way on my recommendation....their legal counsel like this method also....no money is exchanged until the p&s is signed.....when buyers have their selection of homes narrowed down to ours and another, we will win 99% of the time because of the "no pressure" method of doing business....it really is a novelty to most buyers and they appreciate it.
11:01am • #8
APR
09
2010
542,310 Points 8 Featured Posts Localism Sponsor Outside Blog Hit Router

featured post new homes sale group - homes brunswick gaFeatured Post in New Homes Sales Group

Congratulations on this featured post in the New Home Sales Group.  Thanks for your contributions. 

 
6:51am • #9
APR
10
2010
1,519,419 Points 275 Featured Posts Localism Sponsor Outside Blog Attended Rain Camp Called Shot Master

Thank you, Julie....
1:57am • #10


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Barbara Todaro "New Franklin MA Homes"

Franklin, MA

More about me…

RE/MAX Executive Realty

Address: 445 Franklin Village Drive, Franklin, Ma, 02038

Office Phone: (508) 520-9881

Cell Phone: (508) 918-9148

Email Me

The Kuney-Todaro Team is the "#1 team in Franklin's #1 office." Our expertise is in marketing new construction and resale properties. New construction is our niche and we have sold 40 subdivisions in the area of Franklin MA.


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