Maximizing New Construction Sales: The Power of Model Homes

THE IMPORTANCE OF A MODEL HOME IN NEW CONSTRUCTION SALES

When it comes to new-construction sales, it is important to have an comprehensive marketing plan that incorporates all aspects of real estate sales strategies. Pre-construction sales campaign, project website, well-designed brochures with project details and benefits, MLS listing strategies, video and photographic content, written advertising, each of these things play an important role.

Surprisingly, however, one of the most important elements to a successful development marketing campaign is often overlooked. And that is the MODEL HOME.

In the last decade I have been fortunate to have been part of many successful residential projects. Through good market conditions and bad, I have learned that having a model home is an absolutely essential part of a complete marketing campaign.

A personal anecdote is always helpful to make a point and the following story, briefly told, will help with understanding the impact of the model home on new construction sales: A few years ago I was the lead agent on a development of town-homes in the Lakes Region. We had tremendous pre-construction success. However as construction went along, the sales slowed down dramatically. It became clear to us that our biggest hurdle was the lack of a finished product to show to buyers. We struggled with Open Houses in half-built units, and conducted roadside showings amidst the hustle and bustle of a major construction site. It was unsafe and unsuccessful. Our luck changed however when we had a sale fall through on a completed unit and we were able to use it as a model. Subsequently, another finished unit became available to us as the owners appreciated our help in purchasing the unit and allowed us to use their condo as a showroom. Sales followed, and we got back on track, ahead of construction.

• 1. A staged model home allows for professional interior photography that can be the heart and soul of a successful MLS listing. Without it, an agent will have to use virtual renderings. While they can help, especially with a fully finished but unfurnished unit, nothing beats a professionally staged and photographed home. The difference in sales prices attained when a home is staged versus unstaged can often be 10-20 percent higher, now multiply that figure by however many homes are in the development.
• 2. A well-staged model home provides a welcoming and relaxing introduction to buyers on their first visit to a project site. Being able to walk through a finished product, seeing how the home is intended to be lived in and enjoyed, will set the stage for the tour to follow. As a starting point for the project tour, buyers can view a community map, get an explanation of what they will see in terms of roads and infrastructure, and be able to visualize a completed home on the lots that they will look at. Without that, a Realtor has to meet the buyers on the side of road under construction, perhaps in muddy conditions (been there!), and then has to tour unfinished homes in what can be extremely unsafe conditions. And safety aside, it is very difficult for most people to walk through a home in various stages of construction and fully appreciate how living there will enrich their lives. Consider it this way: after seeing first hand the home to be built, and then viewing the various available lots, a buyer is able to say to themselves “I can have that house in that spot.” If they are able to do that, and they like what they visualize, then we are on our way to a sale.
• 3. A model home can be used as a design show-room. The home can be constructed as a “base model” with various upgrades such as hardwood flooring or higher-end kitchen granite selections able to be viewed. Or it can be built with all the bells and whistles, in an effort to persuade buyers to go all-in on the upgrades that can help builders with a profitable project. Sometimes the best approach is a little of both, with the base offering of kitchen cabinetry for example but also incorporating elements such as tiled showers. Whatever can be done to enhance the viewing experience in the model home will make the sales effort a little easier.

• 4. A model home also can give a buyer an option for an immediate or at least shorter term purchase. As the development progresses, the builder may have other units completed or close to completion but unsold (it can happen!) and would be able to move the model to another unit if the buyer has their heart set on the model due to location or the finishes chosen. This can result in a transaction that otherwise might not have occurred. Many potential buyers are put off by the long wait associated with new construction projects and the option of purchasing the model home might be the only way to make them a buyer, not a looker.
• 5. A staged model home can function as a sales center, allowing the agent to complete the process on-site while the buyer is still engaged and before the full pleasurable experience of viewing the project has worn off. This is another reason for the full staging, it allows the buyers to remain relaxed and comfortable. They are in a HOME, and they are realizing their dreams. This is so much easier to accomplish sitting in a living room around a coffee table than it is in the agent’s office.

• 6. A model home displays the quality of work that a buyer can expect from that particular builder. Buyers can open cabinets, run faucets, slam doors (they do it), and examine the quality of fit and finish throughout the home. This experience cannot be duplicated by viewing even the highest of high-tech renderings or computer models. Many people are tactile in nature and have to to touch, feel, and experience something as substantial as a home purchase before they make a decision. That is extremely reasonable when you consider the enormity of the decision. Truthfully, the best of both worlds is to be able to show a buyer a completed and staged model home and then walk them through a partially completed unit. This allows them to be satisfied that they the highest standards of construction are being adhered to and nothing is hidden in the finished product.

As we said at the beginning of this post, there are many facets to new-construction marketing and sales. As a specialist in the field I appreciate all of those elements and we seek to incorporate each of them in our comprehensive marketing plan. But we are swimming against the stream without a home to show to the buyers. As a builder you should be proud of the product you are offering. Show it off!

JEREMY AVERY IS A CO-FOUNDER AND PRINCIPAL BROKER OF LACASSE & AVERY REAL ESTATE BROKERAGE. HE HAS HELPED DEVELOPERS WITH LARGE AND SMALL PROJECTS. HE CAN BE REACHED AT 603-481-2657 OR THROUGH THE WEBSITE AT WWW.LACASSEANDAVERYREALESTATE.COM.