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How to sell homes using incentives

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How to sell homes using incentives

In today’s market, home buyers have come to expect incentives and discounts from builders. New-home sales guru Bob Schultz offers advice on selling using incentives.


By Bob Schultz, President and CEO, Bob Schultz & The New Home Sales Specialists February 24, 2012
In today’s market, home buyers have come to expect incentives and discounts from
This article first appeared in the PB March 2012 issue of Pro Builder.

So many builders are offering discounts and incentives today that buyers have not only come to expect them, but they’ve elevated them to a position of utmost importance. Instead of focusing on what they want and the overall value in a home, they walk into sales offices fishing for the best discount they can find, looking to make a deal.
These customers can be tough to handle, but we have the ability to help them refocus on what is really important. When a customer walks through the door and asks about discounts and incentives first thing, we need to defer the question, shelve their concern, and cause them to experience our homes first.

Purchasing a home is an emotional process, and the emotion is ultimately justified or dismissed based on some logical premise. It is especially critical now to make customers experience your homes in an emotional way, because they come into your office in an extremely logical frame of mind. They are stuck on the thought that since other builders are offering incentives, you should be willing to offer competitive incentives. And, if you aren’t, they can simply go somewhere else.

By presenting a home to customers before you discuss specific pricing and incentives, you can cause them to emotionally own it. Then you can use any incentives you may have to give them the logical justification they need to buy. Any incentives you offer should always be used as “closing statements” and never offered up front.
I cannot overstress the importance of getting customers to experience an emotional reaction to your homes before you give them a logical reason to include or exclude you from their buying process. Let me give you a familiar example of this principle.

Anyone who has ever been on a diet knows what it’s like to go to a restaurant with a predetermination that you will not order dessert. When your server asks you at the end of the meal if you want dessert, it’s not very difficult to say no. But sometimes the server clears the plates off of your table, brings out a tray of desserts, and puts them in front of you. You see the mounds of chocolate, caramel, and whipped cream and you look at the person sitting across from you and say, “Want to split one?”

It’s not so easy to say no after an emotional reaction to something. Once the server put the dessert in front of you, you began to own it. The same thing happens when you show a customer a new home. You need to defer the discussion of incentives until you have caused the customer to own the home.

Here’s a script you can use to accomplish that:

When a customer asks, “What incentives are you offering?” respond with a dialogue that forces them to sort through their priorities. Incentives, lowest price, or interest rates alone do not necessarily offer the best value.

Your response could be something like: “That’s a great question. May I ask, in your search for a brand-new home, is the reputation of the builder, the quality of construction, convenient location, or warranty somewhat important to you, or are you looking for your new home based solely on incentives or the cheapest possible price?”

The customer might say: “No, not the cheapest price, but we want the best price or the best deal.”

Proceed with: “Oh, what you’re saying is that you want the best value, is that right?”

The customer will most probably say, “Yes.”

Then say: “Great, let me show you what we have to offer here at (name of community), and then you can decide if it is the value that you are looking for. Then, I’ll be happy to go over in detail the limited-time incentive opportunities we have available, okay?” This technique is a form of “shelving,” and from here you can move back into your sales presentation.

Since today’s customers have come to believe they are entitled to a little something extra, it is a smart practice to offer limited-time incentive opportunities. An incentive does not turn non-buyers into buyers. But when properly structured and presented, an incentive can cause a buyer to buy sooner and from you rather than a competitor. Good value combined with a short-term incentive makes for a smart buyer.

Bob Schultz is president and CEO of Bob Schultz & The New Home Sales Specialists, a management consulting and sales firm based in Boca Raton, Fla. Schultz is the author of two best-selling books, The Official Handbook for New Home Salespeople and Smart Selling Techniques, and was named a Legend of Residential Marketing by the NAHB. He can be reached at [email protected]

Written By
President and CEO

Bob Schultz is president and CEO of Bob Schultz & The International New Home Sales Specialists. Write him at [email protected].

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