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What do National Home Builders do to sell homes that the re-sale market doesn't?

By Pablo Santibanez

Services for Real Estate Pros with Buildalegacygroup #01089189

April 29, 2007 02:17 PM

National home builders throughout the United States all market their new homes in a similar manner. They place ads in the local newspapers announcing their homes for sale and how to get to their sales office. Once a prospective home buyer meets with the sales office they go thru a presentation. These presentations vary from builder to builder but all prospective home buyers are ultimately provided with a brochure before they leave. These brochures typically include an artist' rendition of the different home styles and their floor plans. The home builders provide these brochures to the buying public because it is a recognized and proven method of selling their homes. In the early stages of construction (even prior to the models being erected) many homebuyers are able to make decisions as to which home they prefer to buy. In some cases, some buy homes based solely on this artist rendition and a detailed floor plan. Many home buyers get together at the end of the day sit and compare floor plans, sometimes imagining their furniture in each room. The most recent development is these same builders are now including floor plans on their websites as well. It is a basic yet effective marketing method to sell homes.

Incredibly in the re-sale market this marketing tool is completely abandoned? Check every home listing, Realtor website, home flyers, etc... and you will learn every detail about the home with the exception of a floor plan. At present absolutely none of these marketing pieces include a floor plan? Why you ask? We posed this question to a number of real estate professionals only to learn the following. Of those real estate professionals we asked, we learned of all the reasons under the sun as to why they don't utilize this proven marketing tool? All were glad to share their personal opinions or theories as to why it wouldn't work for them, yet none of them had actually tried using it to sell a home! Go figure?

A paradigm shift in marketing homes will need to take place in today's re-sale market. As homes take longer to sell in today's market environment it behooves home sellers to utilize every effective marketing tool necessary to differentiate their home from competing homes. The simple act of including a floor plan could accomplish just that. Unfortunately to date most home sellers will not be exposed to this marketing tool on the re-sale market. The handful of real estate sales professionals who are currently utilizing floor plans in their marketing, are benefiting as a result. It is another example of the 80/20 rule which is alive and well, where 20% of the agents are selling 80% of the homes.

A few small internet companies have emerged to meet this untapped need. The Illinois real estate market is growing in the use of this type of marketing floor plans on line. Websites such as www.homesight.net and others provide the interactive floor plans well within the reach of most real estate professionals and FSBO's (For Sale by Owner) in terms of cost and ease of use. Another internet company we recently learned about is http://www.realestateshows.com/ a company which provides real estate professionals a unique and affordable way of presenting homes which also includes the ability to display floor plans.

I recently spoke with a homeowner who was so thrilled with her virtual tour with floor plan she told me that "she had everyone in her office come to her computer terminal to see her home throughout the day". A color flyer can't create the same "Buzz" or emotional impact as these tours. Here is an example of one of the recent tours completed at 4843 Round Top Dr Los Angeles, Ca 90065

We are increasingly becoming a more litigious society. The number of forms and disclosures involved in the sale of a home continues to increase every year. Floor plans drawn by licensed professionals are known to reduce the liability real estate agents are exposed to. Simply scanning a floor plan from the builder brochure without their permission is unprofessional, and could possibly land those responsible in court for copyright infringement.

Unfortunately for home sellers many real estate professionals believe that by simply not stating or using sometimes unreliable public records for their listings they are off the hook from a potential lawsuit. Wrong!! Many real estate professionals mistakenly assume that tract homes are all the same, if this were true why are real estate appraisers required to measure your home when you're obtaining a loan to refinance or purchase?

In summary, If given the choice most home buyer's would like to see a floor plan prior to visiting the home much like those clients that buy new model homes from national builders. In todays market environment it is critical for home sellers to differentiate their homes from others they are competing against. At the present time, it is unlikely that the general public will be exposed to this form of marketing in the re-sale market unless they utilize the services of the 20% of the real estate professionals who currently do.

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Stephen Gladstone

Stonehollow Fine Home Inspections & Testing - Stamford, CT

Interesting...I never really gave it any thought. My wife is a Realtor, I'll chat with her about floor plans to see her take on it. Thanks

Your Home Inspector in Ct, Steve Gladstone Stonehollow Home Inspections

Apr 29, 2007 02:47 PM

Laurie Mindnich

Centennial, CO

Please don't tell me that you think that BROCHURES sell new houses! Please. If that were the case, just a simple floorplan, here, spend 500k, don't you think that all real estate agents would have caught on? "Hey, here's the floorplan....SIGN HERE." As it happens, I'm in a position to comment on this with authority, because I work for a builder that prohibits floorplan distribution until the customer has endured a virtual tour, a presentation of amenities, a tour of available homes, etc. PROHIBITS THE DISTRIBUTION OF BROCHURES. The game is the same, whether re-sale or new construction ( IN ORDINARY CIRCUMSTANCES)- it boils down to presentation.

Apr 29, 2007 02:47 PM

Julie Chapman

Julie Chapman Broker - Ormond Beach, FL

Daytona Beach Shores, Florida

Floor plans for resales can be obtained from most building inspection departments of the county in which the plans are approved for the building inspector or possibly from an old appraisal or the brochure the buyer kept from when they purchased the home. I would suggest always adding a disclaimer that modifications to plans may exist and buyer has personally inspected home if adding plan to a contract.

But I would like to offer that new homes are sold by agents with knowledge of their product that are willing to show their homes while often not completed and help the buyer visualize the finished product. The last thing you give a buyer is brochure as not to distract from the knowledge you want to give this buyer.

Also, as a representative for homebuilders, you are responsible not just for your builder's income but that of all of their subcontractors. You are increasing the tax base of the area by building new homes and creating jobs. It is a great responsibility and should be treated a no less than the same.

Apr 29, 2007 04:10 PM

Pablo Santibanez

Buildalegacygroup - Santa Clarita, CA

Laurie, thanks for your thoughts, I agree, as you do, just handing out a brochure with a floor plan will not always sell a new home. It is authority's such as yourself that do. No computer, or marketing tool will ever take the place of an experienced human sales "Professional" at a tract where everyone comes knocking at your door. Now with that said, It is funny you used the term "endured a virtual tour" I don't believe anyone should have to endure anything in the process of buying a home. I would not buy a home by simply enduring your virtual tour, nor would I buy a home from you solely based on your amenities, tours etc... But if you never tried or discounted any one of those marketing tools you would be "Selling" yourself and clients short.

Now I personally (I am not an authority) based on my own personal experience. In the search of our own home went to dozens of New tract homes by national builders in my area. I was handed a brochure at each one and was asked to physically visit all of the models. After viewing all of the models, I was asked if I had any questions. In many cases I didn't and if I did I would ask, My wife and I would sit at the dinner table at the end of the day and go over the different floor plans from the brochures and decided on the house we liked for many other reasons as well. We then went through the whole process of buying that home. If I had to "Endure" your sales process and presentation I would likely put a gun to my head. LOL!!!

My point which is has been obviously missed is that a floor plan is an effective tool in addition to all of the marketing tools available to sell a home in the re-sale market. It is presently being under utilized or dismissed all together. If you say it will never work your right guaranteed 100% of the time it won't. If you say it could work chances are it will. I'm willing to take that chance. As I mentioned before nothing can or will replace an experienced real estate professional. Just make sure that professional is utilizing all the tools they have at their disposal to sell your home.

Apr 29, 2007 04:29 PM

Pablo Santibanez

Buildalegacygroup - Santa Clarita, CA

Julie I appreciate your comments,

Here is my own personal experience with city records, When I bought my home it took over 2 years to update my records with the city!. For 2 years my new home was described as "Desert land". Our area continues to experiencie tremendous growth not unlike many other communites throughout the united states. City departments are overwhelmed with new tract developments and are months to years behind in updating records. After owning the home for over 3 years I went as you suggested to my local building inspector and asked for a copy of the plans on my home. I wanted to add an additional family room upstairs I was told by the inspector that I was unable to obtain a copy of the plans as it was deemed copyrighted material which would require approval from the builder. I was shocked!

Here is my professional experience with city records. I am a real estate appraiser and have been appraising since 1986. I cover the county of Los Angeles. Many homes were built in the late 1800's thousands were built in the 1920's Zoning in the city did not even exist let alone floor plans. My only experience with city records is limited to southern California. Floor plans are virtually non existent, those few exceptions are of such poor quality they cant be used. From my conversations with other appraiser' throughout the nation what I have experience here is not uncommon for other municipalities as well. There are probably exceptions, I haven't experienced them.

Utilizing a floor plan from an Appraisal without the appraiser's permission and using a floor plan from the builder without there permission could find you in court. Simply placing a disclaimer does not obsolve you of responsibility. This is a common misperception. Many real estate professionals wind up in court due to errors in living area. I am not an attorney I suggest you speak with one and ask him/her if a disclaimer stating that you relied on city records is good enough to keep you out of a court room. The next question would be "does having an appraiser confirm the living area with city records be considered "Due Diligence" I am not an attornay I cannot give legal advice I suggest you consult with one to see which is the better option.

I agree knowledgable agents and builders are an absolute necessity. They are an intregal part of the process as you said.

Apr 29, 2007 05:42 PM

Pablo Santibanez

Buildalegacygroup - Santa Clarita, CA

Stephen I look forward to hearing what your wife's take is on this. Just a thought, you probably are already aware of this, But do you market to new home buyers that bought new tract homes?. I often suggest to new homebuyers in new tracts to have a home inspection done. Many home buyers simply focus on the cosmetics touch ups needed. They aren't experienced to know if there are obvious defects or where to look to uncover other issues.

I also asked a number of home inspectors what is the percentage of homes they inspect for home sellers as opposed to home buyers. The percentage was like 90% home buyers and the remaining 10% was home sellers. Is that what you experience as well? I recommend to home sellers to have there home inspected prior to listing it for sale. Addressing the issues that come up if they impact value, reinspect again after repairs and avoid the buyer using repairs as leverage to re-negotiate the sales price as well as other reasons.

Apr 29, 2007 06:04 PM

Laurie Mindnich

Centennial, CO

Pablo- I completely agree with you, and it's the builder that sets the presentation and how they want their product to appear to the public. Most people want to be educated when they look at new homes- if they're paying fees for amenities, they want to see what they're getting (the virtual tour, five minutes, shows the clubhouse inside, the outdoor stuff, etc.). If you were the type that didn't care what the money went to it would save time on my end, but you'd be the minority. Once homes are up and the clubhouse is complete, we will eliminate the virtual (can't wait- if I hear that music one more time, I'll scream myself)! Floorplans are great to hand out because people can play around with them, place furniture, etc., so using them in resale is of equal value.

Apr 29, 2007 10:42 PM

Anonymous

Julie Chapman

When I suggested going to the county, I am located in a county where the staff of the county builiding inspector will supply an actual copy of plans because they are public record. (And are very co-operative).

I always disclose as does our MLS where we get our square footage from on any home and our mls discloses that all information herein is "considered reliability but not guaranteed". Also our MLS allows the Realtor to tell where they got the information from: appraiser (which buyer of home owns if they paid for it per my attorney), tax assessors office, seller or builder or architect. We have an incredible public mapping system is that is up to date and online we can find out owner's name, tax parcel and identification number, acreage, square footage of home (per buidling permits including addition), type of siding, year built, etc.

This is why this forum is good - our world are so far apart in so many ways although we do the same thing yet in different areas. I once worked in Sacramento county and would have never tried to get the same information there I can get here. I applaud you as I couldn't do what you do again (I was in my twenties then and am in my 40's now.)

And regarding any information given anyone.........always disclose, disclose, disclose.

Apr 30, 2007 12:53 AM

Pablo Santibanez

Buildalegacygroup - Santa Clarita, CA

Laurie thanks again for taking the time to respond to my blog. Your comments and insights are appreciated. I forgot to mention on my previous response to you my admiration for your passion for what you do. You are absolutely right most people do want to be educated about the homes they are buying, where there money is going etc... We both agree that you and all of the components that make up your presentation are an intregal part of your success. You and I also agree that floor plans alone won't sell a home. It is likely that you could still sell these homes without using a floor plan. But it would be a little harder to sell your homes if the floor plans were eliminated from your presentation?

So if a real estate professional in the re-sale market had a choice (Which they do) Would they need to work harder? or could they choose to work smarter? In today's re-sale market based on the percentages today, working harder is the preferred choice.

Apr 30, 2007 04:07 AM

Pablo Santibanez

Buildalegacygroup - Santa Clarita, CA

Julie thanks again for your insights,

I am soooo jeolous! You live in a real estate utopia!! You are right on, we all do the same thing and have unique issues that make up our markets throughout the country. However the basic fundamentals of selling a home do not change.

Being that floor plans are so readily available and easy to obtain why is it that they are not utlized as part of the marketing of homes in your re-sale market? (Assuming it's not being used) As I mentioned before it is not the only, nor the preferred method but it is an additional tool in your marketing.

What if you decided from this moment on you were going to differentiate yourself from 97% of your competition and include this tool in your marketing arsenal. Could it be the slight edge to secure the sale maybe? But one fact is crystal clear It wont work if you dont believe it will, yet it can work if you believe it can. Most of the competition is unaware of this tool but a small minority is catching on. If I were a home seller and you said to me. I have a unique marketing tool in addition to all that I bring to the table that will differntiate your home from every other home on the market today. Would you like to hear what I can do that no one else is doing? You might just get may attention?

Now wouldn't it give you piece of mind that a professional appraiser measured the home you listed in addition to providing you a floor plan for marketing to "Double check" that those city records are accurate? Let's all hope that all your sellers DISCLOSE DISCLOSE DISCLOSE so you dont get hosed, get hosed, get hosed. Or maybe not leave it to chance and just double check for piece of mind? Just a thought?

Apr 30, 2007 04:53 AM