When home builders are asked which information they deem most critical to the improvement of their businesses, info about new products is always near the top of the list. And for good reason.
There are two kinds of salespeople today: those who don't know how to sell at all and those who do but haven't had to do it for years — and when you don't exercise professional salesmanship, those skills erode.
Hindsight is 20/20, but we should have seen the current housing market implosion coming, especially when prices (and profits) began skipping off the stratosphere more than two years ago. If we'd foreseen it, we could have invested in serious sales training — and maybe we wouldn't be screaming at sales managers and salespeople today because they can't make a sale.
The market is tough, but it's not impossible. In fact, today's selling environment is a lot closer to historical reality than the never-never land we've lived in for a decade. There are two kinds of salespeople today: those who don't know how to sell at all and those who do but haven't had to do it for years — and when you don't exercise professional salesmanship, those skills erode.
Still, it's also unfair to hold people accountable for not doing what they've never been taught how to do. Instead of professional sales training, many builders spent the last decade cutting commissions and denigrating salespeople for being nothing more than order-takers. What we need are sales professionals who understand every aspect of the real-estate industry, particularly the resale market.
The concern I hear over and over is how we can sell houses to people who can't sell their existing homes. This is not a new objection, but a professional salesperson ought to address it with a long list of responses that calm the fears of anxious prospects: "Is your house listed? Do you have a Realtor? Have you had a competitive market analysis done? In the current market, is your asking price realistic?" A good salesperson can use the prospect's fear of the resale market to maneuver into a position as a trusted real-estate advisor, which is right where you want your sales agents to be. And with access to the local MLS database, your salespeople can take control of that resale challenge.
Right now, many prospects who need to move up are petrified they can't get enough for their own home, even as a host of 'guaranteed buy' programs pop up to alleviate that fear. These companies usually guarantee to buy a house for 80 percent of its appraised value if the house doesn't sell in a specified period of time. But they also charge a 6 percent commission, and closing costs further decrease what the seller actually realizes from the sale.
If you are a production builder closing 500 or more houses a year, it might be a good idea to create your own guaranteed buy program, eliminate the 6 percent commission, and maybe even push that percentage of appraised value up to 90 percent. Is it really that much different from buying down a mortgage rate? That would probably remove the fear from most of your sales agents' eyes.
But don't stop there. If you haven't already called your favorite sales trainer, do it today. Unless you build exclusively in Texas or the Carolinas, I bet all your salespeople are now shaking in their shoes.
They need skills and training to succeed. It's time for the tough to get going. And the phones of John Rymer, Rick Heaston, Bill Herring and Bob Schultz are already ringing off the hook!