Every new construction home sold matters now more than ever with new home sales at an all-time low in most of the country.
New home sales in the U.S. dropped by 12.6% month over month in July 2022, with a seasonally adjusted annualized rate of 511K, the lowest since 2016. And even though sales are down, consumers are still looking for value-adds in all of their purchases, especially large ones like a new home.
At the same time, builders are facing rising costs of materials and labor. There was an 8% jump in costs of materials since the beginning of 2022 and the price index of services used in construction is also rising steadily.
So, as a home builder, how can you offer the added value home buyers are looking for while also keeping your own budget in check? Here, we will discuss 5 value-adds home buyers are expecting when purchasing a new construction home.
Energy Efficiency
Home buyers are becoming increasingly interested in energy efficiency. Not only for protecting the environment but also for lowering their utility bills and expenses. As a home builder, offering energy efficient solutions is a given in today’s market. It is something you should focus on in your building plans and in your sales pitch. Some of the top features consumers are looking for include:
- ENERGY STAR windows
- ENERGY STAR appliances
- Efficient lighting
- ENERGY STAR rating for overall home
- Triple-pane insulating windows
Know Your Buyer
When making one of the largest purchases of their lives, a home buyer wants to know that you understand their pain points and have built a home with them in mind. These items won’t be the same for every buyer. Knowing what features to focus on in the sales process will help highlight the value-adds that benefit the specific consumer. For example:
- A young couple might want an extra bedroom for a future nursery and a nice outdoor area to entertain friends.
- A family will appreciate bonus spaces for all the toys and clutter that come along with having small children.
- Retirees who are downsizing are usually looking for less upkeep responsibility, like low maintenance landscaping.
- Professionals are probably seeking a home office space that offers privacy.
- Pet owners would enjoy a fenced yard.
The key is asking the right questions and focusing on which value-adds each home buyer will appreciate. Letting them know you want to make their lives easier by meeting their needs in their new home can go a long way in selling a home.
Offer Options
Whenever you can, it is helpful to offer different options for materials. For example, some buyers might want to spend money on upgrading their kitchen because they cook a lot. A pet owner can expect to upgrade their flooring so it will stand up to the extra wear and tear. It also helps for buyers with different budgets. If someone has the extra cash, they will want to choose options that will enhance their everyday living. Buyers who are making a financial stretch to buy a new home will be okay with the standard offerings. Having the choice is something today’s buyers value.
Incentives
Incentives can make a buyer feel like they are getting a value when purchasing a new construction home. Some of the most common include:
- No closing costs
- Free upgrades
- Warranties
- Rebates
- Military discount
- Free gift with purchase
Offering incentives shows buyers the value they can get by purchasing one of your homes versus the competition.
The Bottom Line
Knowing your target consumer and understanding their needs is the first step in adding value for home buyers. Next, you must communicate to the buyer and, of course, deliver on the promises. The more they feel your company meets their expectations, the more likely they are to purchase a new home from you.
Resources:
- Trading Economics. United States New Home Sales – August 2022 Data – 1963-2021 Historical. Accessed Sept. 1, 2022.
National Association of Home Builders. https://www.nahb.org/blog/2022/04/building-materials-prices-start-2022-with-8-percent-increase. Accessed Sept. 1, 2022.