Blog Post 2/6 of “The Importance of the New Homebuyer Journey” Series
In this post we review 7 basic yet important factors that affect the decision making process at the research stage for prospective pre-construction home buyers.
There is so many layers to developing and building homes, so many touch points with homebuyers and so much competition. How does a builder manage it all while standing out in crowded field of players.
The following is a breakdown of factors builders should consider paying attention to if they want to have a positive impact on converting more prospects to purchasers during the research stage of the homebuyer journey.
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1 | Building a Brand
When you’re launching a new home or condo community for sale the tendency is to focus heavily on the unique story and vibe behind that community. This is crucial for the success of the project.
Buyers want to be connected with the community they’re buying into but your brand as a builder is just as important, if not more. Although the customer is buying into your community they’re essentially buying from you. A builder’s brand equity is crucial during the customer research stage.
OK. So what does that mean?
It means that you, as a builder, need to develop a value proposition that will resonate with your buyers. Be able to convey what you stand for, what you value, and how your company is different from the others in the marketplace. For some builders, this may be as simple as building high-quality homes. For others, it’s the integration of technology. Others take pride in their environmentally sustainable building design and practices. Whatever the case may be, your company’s ethos must be vertically integrated into all of your marketing efforts. Whether you’ve been in the business for 60 years or 60 days, this is the foundation on which you’ll build your reputation.
2 | Reputation Management
Your manifesto can only take you so far — eventually the success of your business will depend on your reputation. In other words, you can’t just talk the talk. You must follow through and deliver high-quality products and experiences to your customers.
This isn’t always an easy feat to manage. There are multiple layers of the homebuilding process, from actual construction to marketing and closing deals. You want to keep buyers happy at every stage along the way. In today’s day and age, a small hiccup can turn into Global News headline or social media fiasco. The last thing you want is an unhappy customer spreading negativity about your company on public channels such as Facebook, Homestars, Google Business, Twitter and Instagram. It’s important for all brands, not only builders to be cognisant of what people are saying about them while being able to respond quickly and take control of situations.
Everyone makes mistakes and no builder delivering on scale is perfect so you should expect and prepare for various common situations that might arise during the home buying and building process.
3 | Reasonable Pricing Strategy
A lot of homebuyers are willing to make tradeoffs. Maybe a single-car garage is sufficient if it means they’ll get an upgraded appliance package in the kitchen. Maybe they’ll buy the home on a smaller lot if the size of the home suites their needs. Almost all homebuyers, whether they’re buying from a homebuilder or buying an existing home, have to make tough choices.
The one thing that’s fairly rigid is their budget and understanding of fair market value. Doing a thorough comparative market analysis at the time you launch your community will ensure that you reach your sales quota for construction quickly which is important because at the end of the day, the quicker you sell, the quicker you can build – and time is money.
4 | Location, Location, Location!
OK. So this is probably the most overused phrase in real estate, but the adage is popular for a reason. Location has traditionally been a primary decision factor when people are buying a new home. One way to stand out as a homebuilder is to engage in projects that are in highly desirable locations. The costs might be a bit steeper on the front end, but recovered during the sales process.
Recently, in Ontario we’ve seen tremendous growth in areas on the outskirts of the GTA. This has been driven by affordability and the lack of large single family homes in Toronto and the immediate surrounding area. As people are priced out of more expensive neighbourhoods, we’re starting to see development in communities of transition. This is leading to a wave of gentrification in areas where homebuilders once would have shied away from.
All this makes location an interesting factor, as traditionally sought after neighbourhoods are obviously still in high demand but there is also ample opportunities in pioneering communities and lifestyles in up and coming areas as well.
5 | Product Differentiation
Products are what make or break a company. Just look at how quickly Blackberry sunk while Apple thrived; Apple simply had better products that . The same is true for homebuilders–you must differentiate yourself by delivering high-quality products.
Different buyers will have different needs and wants, so it’s important for your designs to be inspired by your target demographic. It’s not just architectural design and interior layout that matters. Nowadays, the materials, craftsmanship, systems and overall efficiency of home play a critical role in the decision making process for buyers.
6 | Engage Realtors
In some cases, realtors are a builder’s best friend. Especially for newer builders who don’t have large databases to tap into for referrals. Realtors can guide their clients to the ideal home or investment and provide them with reassurance on a new home purchase. Their support is critical to the success of many of the new condo developments in the GTA. Having the realtor community supporting your project, will help streamline sales.
7 | Appropriate Incentives
You never want to lead with incentives but sometimes an attractive offer is what you need to get some inventory of your shelves. Developing the appropriate incentives is some combination of art and science. Find a marketing agency that specializes in real estate development to strategize appropriate incentive packages that you can offer at every stage of your new home community.
Simply throwing more marketing dollars to drive sales is not always an ideal option. Considering these 7 factors when going to market with a new home community is important as it will allow you to make the most of each consumer touchpoint and refine your marketing spend.
Learn more about the Marketing & Digital Solutions New Street delivers to homebuilders and lookout for the third blog post from “The Importance of the New Homebuyer Journey” Series, coming soon.