In the last issue, we focused on the importance of discipline. Once we made it through the big push in sales to meet the deadline for the tax credit, builders needed to quickly build and close as many of those homes as possible before the June 30 deadline, which has now been extended. Hopefully, many of you were able to meet the original deadline and do this profitably. As we continue to move forward with muddled economic conditions, I want to remind you that you must stay disciplined to ensure your organization continues to operate the way you had intended. Otherwise, you may notice a slip in policies and procedures and it may become a scramble to complete tasks and meet deadlines as people create work-arounds to do it the ‘easy way’. Then, ultimately, you will sacrifice your profits, which you can’t afford to do right now. Don’t let this happen. Stay disciplined!
This month, we will focus on maintaining spec inventory and models. Since the expiration of the tax credit, sales in some areas came to a grinding halt. It got really quiet out there for a while, which was very disheartening. Now, however, we are hearing that some builders are seeing some increases in traffic. The time has never been better for buyers to purchase a new home. Because of these conditions, there are serious buyers out there. How do you get these buyers to purchase one of your homes?
You would be surprised to know that sometimes it is the little things that make a big difference. Let me give you an example. Recently, we were out visiting with a builder. We stopped by to shop the community before heading into the main office. We were highly impressed with their product, display and sales person’s willingness to understand what we were looking for as a buyer. However, when we went to tour the models, we were completely turned off. The models had not been cleaned in several months so we saw lots of dust and a few cobwebs. As we walked through the different rooms and turned on the lights to get the best view, we discovered that several of the lightbulbs were burned out. There was even a coffee stain on the counter in the kitchen from one of the previous prospects that came through the house. This builder spent a lot of money staging the home and thinking about how to set it up to best display the features and benefits of his product but did not spend the time or money needed to maintain it. No one had been tasked with going through the home to make sure it was clean and presentable.
Models need to be kept fresh and clean…ALWAYS. Figure out how to incorporate this into your processes. Have someone clean the homes on a somewhat regular basis, even if it is just dusting and cleaning out the cobwebs. Require your sales teams to walk through the homes and look at them through the buyer’s eyes to see what stands out. Have them report when a model is in need of service so that it gets cleaned right away if there are any major issues. You would be surprised at how many sales could be lost because the models were not clean.
With the limited number of buyers out there, it is crucial that you do all that you can now to ensure you are putting your best foot forward. Keep your models clean. The same rules apply to spec inventory. There is no bigger turnoff than walking a spec to find it dirty and with cabinet doors, dishwasher cover, and other spare pieces missing. Do not use finished spec homes as a part piece depot. Turn them over, inspected and accepted by sales and keep them clean at all times. Even when still under construction, specs need to be sparkling during weekends to present them in the best light. Customers equate cleanliness and care with quality. They are not wrong about it. A builder that excels in quality also excels in having clean job sites.
Next month I will discuss the next mistake builders make: Estimating is Questionable at Best.
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