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Upgrades Without UpsetLimiting options to the most popular protects builders from failed sales
In today's tight market, that's a real concern. "Today, more and more contracts are falling through," says Bob Schultz, president of New Home Specialist Inc. and author of The Official Handbook for New Home Salespeople and Smart Selling Techniques. "Financial requirements have gotten tighter because of the subprime meltdown, and it's harder for people to actually get a loan. Or, people can't sell their house for what they thought they could. Either way, the builder has lost a buyer." Experts suggest that home builders restrict the upgrade choices they offer in their design center to those that are easily sold in most houses. "You don't want to do something that personalizes the home too much [and makes it hard to sell to another buyer]," says Virginia Richards, design center manager with Ryland Homes in Phoenix. That's why Ryland Homes offers a limited number of upgrades in its 3,000-square-foot design center. The home builder offers only the hottest colors, the best-selling textures and the most attractive features. "I ask each one of my vendors to bring in the top 10 products in the marketplace," Richards explains. "It's not about what we like; it's about what's selling and what's attractive to buyers in our market." South Bend, Ind.-based Weiss Homes also relies on its vendors to provide it with universally appealing upgrade options, says Vice President of Sales and Marketing Kym Baker. She says Weiss Homes designers "try to give the customer some guidance without being overbearing," by steering them toward more timeless choices and by pointing out upgrades that let them personalize their homes without making them look edgy. "We stress resale value," she adds. Richards says that Ryland's sales staff also keeps buyers aware of resale value when choosing options. "Upgrades can make houses stand out in the marketplace, but if they don't look cohesive and seem too individualized, they're going to hurt on resale," she says. Both Weiss Homes and Ryland Homes cover themselves by requiring deposits for upgrades. Ryland requires 10 percent to 20 percent of the total cost of upgrades. And, if there's any sign the buyer is "shaky," the builder waits on installing some of the upgrades. "Throughout the process, we watch our buyers and our homes very closely," says Richards. |
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