Sales is a tough job. But for those working in today’s housing market, with 30-year mortgage rates north of 7.5% and the median home price below $400,000, getting buyers to sign on the dotted line is a big challenge.
Go back to 2019 to 2021 and people were paying the asking price, getting into bidding wars and buying sight unseen. Sellers had to do little more than take orders. The outlook for 2024 is very different. As a result, builders realize that their successful teams are neither experienced nor prepared to meet sales goals in this type of market.
Fortunately, there are several strategies that can help builders win back their sales reps.
Building the right team
Experience matters. Building a winning sales team starts with hiring people who have successfully navigated the markets, even if that experience is outside of real estate. Look for candidates who have a passion for sales, a track record of winning, excellent communication skills and a genuine interest in the industry.
The right sales professionals understand interests. They come with the right motivation and purpose. They see their role as helping people make what is likely to be the biggest purchase of their lives. That means deftly navigating the needs, emotions and financial realities of potential buyers to make the deal.
Expansion of the sales function
Gone are the days of waiting for buyers to walk into a model home or submit an online interest form. The 2024 market requires much more urgency. Make sure the job description includes inbound marketing duties. This includes efforts such as generating social media content, creating videos, sending emails, and hosting in-person and digital open house events.
Make cold calling part of the job by using existing leads or new contact sheets. Many homeowners are ready to move, but hate to give up their low mortgage rate. Sales professionals willing to make them an attractive offer on something new can get them back on the market sooner.
Encourage the sales team to talk about what additional tools they need, such as website improvements or new technology to bring buyers to the table.
Retain talented team members
A good salesman is worth his weight in gold. However, those accustomed to high commissions may be looking to take their talent elsewhere in this market. Make sure commissions remain competitive, but also look for other incentives. This may include sales recognition programs, alternative benefits such as wellness plans, and bonuses based on factors beyond closed sales offers. Consider things like leads generated, average bid margin, or customer acquisition costs. These can help offset lost revenue from fewer bids while protecting a builder’s bottom line.
Don’t forget to celebrate the small victories. They can add up to something big. Shawn Karol Sandy, founder of The Selling Agency, said, “Retaining reps has less to do with big bonus checks than it does with daily wins.”
Improvement of the sales team
To build a winning sales team, focus on continuous improvement. Foster collaboration and knowledge sharing between the sales team and other departments. The bigger companies grow, the more they become. Knowledge is power when it comes to having the right message and information to close deals.
Provide regular feedback and training to help sales professionals grow. Retain and develop top talent by creating a career ladder and mentoring program that promotes professional development and career advancement.
Invest in tools and technology that streamline the sales process. This gives the team more time talking to potential buyers than on administrative work.
Strengthen the team with alternative options
Sometimes a beautiful home alone isn’t enough to seal the deal. Educate and train the sales team to use alternative offers to sell a home. These strategies may include:
- Promoting Your Warranty Program 2-10 – Higher interest rates also mean greater buyer hesitation. Empower your sales team to help put buyers at ease with more information about home warranties. PWSC, a PCF company, has a 2-10 year warranty which also demonstrates the builder’s commitment to quality for 10 years and can be a real sales differentiator.
- Offering an extended warranty – Sales professionals can quantify the value to the homeowner of having their home systems and appliances protected, especially against normal wear and tear. PWSC’s HomePRO is a great sales tool to give potential buyers added peace of mind and a financial safeguard against the “uh-oh” expenses that inevitably pop up.
- Adding updates – Choosing from finishes, updating appliances or adding custom touches makes a house feel like a home. Equip the sales team with the knowledge needed to handle upgrades that make a buyer feel attached to their potential new home without breaking the bank.
- Reduction in house prices – This certainly shouldn’t be the first, but dropping the price a bit may be enough for buyers to choose your build over other options.
- Mortgage rate reductions – Lowering mortgage rates is the most expensive and most popular option. Currently, builders are paying twice as much in purchases as they would in a normal market. While this shouldn’t be the first lever a seller pulls, it is effective with buyers concerned about the cost of financing.
Investing in the sales team isn’t usually a builder’s first priority, but in this market perhaps it should be. Developing the right sales team requires a strategic approach that grows skills, expands the job role and empowers the team to attract and close deals. After all, if your sales team learns to thrive in a down market, imagine what they can achieve when things turn around.
Find out how PWSC and PCF Insurance can work with your sales team for home buying options that are proven to generate deals.
By Lindsay Tingler, PCF Construction Practice Leader
