Ask Jeff: The Customer’s Current Home

We are selling a 28 unit active adult community in Long Island, NY. Currently we are about 80% sold, most of which have been recent full price deals. The problem we are seeing is we have loads of prospects that love the community and the homes that we are offering, are fine with the pricing because they see the current sales, but have a home to sell in order to make it happen. Most of the folks are conservative and aren’t ready to make a move to a contract despite the above. We even have a program that gives them the time to sell their home. Their response to all of this is “if I sold my house I would buy here today”. I believe them because most of the recent sales are from prospects that have recently put their home into contract and came back to us to move forward and at full asking price. How do you suggest moving this situation along any differently?

Jeff:

This is, of course, a common issue these days and not just for the active adult buyer. But the deeper concern must me more clearly defined. Let’s break it down.

The customer has a home to sell and that causes an objection. But what is the easiest way to sell the home quickly? Simple. Do a market survey and then price the home at $100,000 under the comps; it will sell in no time. Of course that’s not feasible; I’m only trying to make a point. When a customer says, “I can’t sell my home”, that’s not an accurate statement. Of course he can sell his home; he just doesn’t perceive that he can sell it for enough.

Which leads us to the next questions in this process: how much does he need to sell his home for, and why? If a prospect states that he needs to sell his home for a certain price in order to qualify for the home he is interested in, that’s one thing. But often times (and this is particularly true for the active buyer with lots of equity) the prospect is really thinking, “I can’t sell the home for what I think it’s worth.” In other words, we are not dealing with having to sell the home for a certain price, but rather with a reluctance to sell for less than what he thinks he should get. After all, he poured that back patio with the sweat of his own brow!

So the first order of business is to find out whether this is a financial issue or a psychological one. If it’s just a matter of value perception, then an education on “fair value” is in order. And if he waits for his home to climb in value, he’ll be waiting for yours to climb as well. Try this statement: “When it’s such a great buying opportunity, as it is today, rule #1 should be to live in the right home.”