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Competing with Foreclosures

January 15th, 2009 NewHomeKnowledge.com

A fact of life for new home sales professionals in 2009 is that 40% of home sales in many markets are not builder sales or homeowner re-sales, but homes which are lost to short sales, or foreclosures. The first reaction of many new home sales professionals is to become defensive when discussing or comparing their new homes to lender owned housing.

But for the true new home sales professional, comparison of short sales or foreclosure is often one of the best ways to show value in the new home they are offering. So let’s begin with the key differences between a new home and a short sale:

1. How much is your time worth? New home sales offices are filled with customers who spent months working with on a short sale and thinking they had a deal, only to find out their offer had been rejected by the lender. 60% of top general Realtors in a recent survey responded by saying they would no longer work with short sales because they had no assurance they could get a deal executed. Not only is it time consuming but postpones the buyer becoming a homeowner.

2. Tell me about the short sale warranty? “We wouldn’t provide a comprehensive warranty if we didn’t believe in our quality.”

3. Frustrated homeowners often leave “surprises.” The experience of losing a home to foreclosure is not pleasant. Angry homeowners often leave behind surprises to get back at the lender, but the new homeowner is the one who must deal with the problems.

4. Do they value your satisfaction? Builders value your satisfaction and are the decision makers. If they provide erroneous or misleading information, their reputations are ruined and their company will surely fail. In the case of foreclosures, you often deal with a daisy chain of (a) a general Realtor who passes along information to the the (b) lender’s representative who passes long the information to the (c) special assets manager who passes the information along to the (d) loan committee. As no one has ownership in the process or knows what the final agreement will look like, there is ample opportunity for bad or misleading information to be provided throughout the process.