Whether you’re charging a million-dollar premium for a custom home on the ocean or $10,000 for a cul-de-sac production home, that premium could be too low, says Jeff Meyers, CEO of real estate research and consulting firm Meyers Group, based in Costa Mesa, Calif.
For builders across the board, he recommends “overpricing” lots (and homes) with premium size, views or mixed-lot conditions, which absorb faster.
“Those lots and houses will always sell, so if you overprice them, it’ll help you pull the values of the inferior lots,” Meyers says.
Higher premiums, in turn, increase absorption and provide more uniqueness for consumers, provided a unique value story lies behind each premium.
Meyers emphasizes the need to chase revenue as aggressively as you cut costs and sees too many industry GIANTS as shortsighted cost-cutters.
“They’re quick to tell you they just saved $100 a house,” Meyers says. “That’s great, but your marketing director just left $10,000 on the table at the last house he sold.
“And while they’re focused on every penny that goes out the door, dollars are flying out the window because it’s a lot easier to find revenue than it is to cut cost.”
Advertisement
Related Stories
Land Planning
Helena Habitat for Humanity Aims to Build 1,000 Affordable Homes
A new Habitat for Humanity project in Helena, Mont., aims to deliver 1,000 affordable housing units and outdoor community amenities
Government + Policy
How Eminent Domain May Be Used to Respond to Climate Crises
Eminent domain, which grants the government power to take private property for public use, has displaced thousands of Americans for the sake of infrastructure in the past, but it may be used for a better purpose in a global climate crisis
Q+A
Soil Connect Is Moving Dirt and Building Relationships
Cliff Fetner created Soil Connect so builders and developers could more easily move dirt and other aggregates from jobsite to jobsite, but it has expanded to become something much more