Conquer Customers' Fear

In addition to low traffic levels, our industry is also experiencing one of the lowest traffic-to-sales conversion levels in its history. It's easy to look at sales conversion statistics and blame the sales professionals for poor performance.

“Customers don't go looking for new homes today because it' the cool thing to do. They're here to buy!” said one frustrated home builder to me recently when complaining about low conversion levels. It's true that agents are not seeing results. It's also true that today's sales agents are working harder than ever. This disconnect illustrates that traditional sales presentation solutions fail to deal with the central issue of today's customer and therefore produce sub-par results.

In the past, low traffic to sales conversion typically indicated a sales team that failed to build sufficient value to justify the price. You've seen the sales drill: Did you create value in the location? How about the benefits of the community? The builder? The floor plan? This is great sales advice in most market conditions. But it is fear rather than lack of value that is keeping today's customers away from the closing table.

No. 1. America is creating twice as many new households as new housing starts. This trend cannot and will not continue. Ultimately housing starts and new households will match up and today's housing slowdown will reverse to normal levels. The current housing inventory “overhang” is being depleted each month, and the buyers' market will soon be a thing of the past.

No. 2. Housing affordability is at record levels. Lower prices and record-low mortgage rates have combined to make homes more affordable than in any time in recent history.

No. 3. New-home prices as they are now are unsustainable. Prices must rise because replacement costs for home sites are far below today's prices, and home builder margins are below those acceptable to bankers and investors over the long term.

As you can see from the above, the mid and long-term outlook for housing is extremely positive. Homeowners who are planning to live and enjoy their homes over time will likely enjoy the added benefit of a great housing market. Those who are trapped by fear and frozen from making a decision as important as a new home purchase will just as likely miss out on a great time to become a homeowner. Don't let emotional fear keep your customers from making one of the soundest decisions of their lifetime.