Hey guys, Ron Williams here and I want to talk to you about the number one reason why people who really want to build a new home don't. Several years ago we started studying people who want to build a home and then don't do it versus people who actually pull the trigger and build a home, and the numbers are pretty astonishing.
Did you know that for every one person that builds or buys a new construction home, there are five more who say they want to? One who builds, five that say they want to. That's pretty shocking and when we get down into the reasons why they all surround the fact that the buyer feels like it's a very risky experience for them. They can't find the right information, they don't understand the process, and they don't feel like it's user-friendly.
Now we can say that it is because we work in the industry. Their experience, however, is quite different because for many of them it's a once in a lifetime thing. They've never done it before and they don't have a lot of resources. And so it feels like a lot of risks. The number one reason why people don't build when they really want to has nothing to do with finances, they’re financially qualified to do so, but they don't.
When we think about people building a new house, we talk to them about the model that they want. We talk to them about which builder. We talk about the cabinets, the interior or the exterior of the home itself. And the truth of the matter is, the very first question that the buyer has to answer for themselves, where they really feel comfortable and ready to move forward has nothing to do or very little to do with who. The first question is not about who is the builder that I'm going to build with. They may already have an idea of which builders they like, which ones they don't like, which ones they're attracted to. But that's not the first question.
The first question is also not what. It is not about what are we going to build? Are we going to have a ranch or a two-story? Are we going to have a finished basement or a walkout basement? They generally have a pretty good idea about what they want. Many times they've been dreaming about it as you know, for years. I've seen buyers that come in and have an entire portfolio of photos that they've clipped from magazines or they've got off the web. They have an idea of what it is that they want. So the question is not who, it's not what, and it's certainly not what kind of faucets or backsplash are we going to have? Those are not the top questions.
The very first question that the buyer has to answer for themselves to feel comfortable in moving forward to the next step is where.
Where are my opportunities? Where are the neighborhoods where I can build my dream home the way I want it? The right size, price range, and amenities that I'm looking for. Maybe I'm looking for a tennis court. Maybe I'm looking for a neighborhood that has a horse stable. Maybe I'm looking for a neighborhood that has a lazy river-and there are some that do have that.
So the very first question that they have is really where.
The problem is they get stuck in the mud on that very first question because you just cannot find your options as a buyer very adequately or well. Now they can go to an individual builder’s website and see what this builder or developer options are for them. Or they might be able to go to a Realtor website and find a mishmash of things, but they can't really find all their options on where.
So if a couple or a family says, "Hey, you know, we're really looking to build a 3000 square foot ranch and we want a walkout basement. We'd like to have a one-acre lot and live in such and such a school district and we'd like to have a horse stable nearby." In most areas, you just cannot find that easily.
One of the numbers that we found early on when we started to go down this path was in most areas, in most MLS's, less than around 40%, maybe 50% of the new home neighborhoods that are available to a buyer are actually listed with a Realtor. So think about that for one minute.
When somebody is buying a pre-owned home, they have access to a multiple listing service and an IDX feed that every Realtor, every brokerage, every portal has. They can slice and dice exactly what they're looking for and narrow it down very quickly to what their options are.
But when it comes to building new, over 50% of the new home neighborhoods market-by-market are not listed with a Realtor. Therefore, the buyers don't have the right information on their first important decision. Where can they build their size, their style, their price range home with the right amenities that they’re looking for?
So what happens in marketing or what happens in sales? The confused mind only knows to say no. If they can't find the right information then it's easier for them to walk away and say, “well maybe we'll do it someday, but we're not going to do it today.” That's the number one reason why buyers who want to choose new construction don't.
My name is Ron Williams. I'm the founder of a company called Hoodle which is a national web platform for the home building process. We're trying to make this process easier for buyers, where they really feel like they are getting their questions answered and they're able to move through this process very streamlined, very seamlessly to get into their dream home. The home, the neighborhood and the community that they want. We'd love to have you check us out at www.Hoodle.com.
Over the next few weeks, we’re going to write a series of blogs. I'm going to talk about the seven different reasons we've heard from buyers on why they don't choose new construction and the seven top reasons why new home building is really broken from a buyer standpoint.
We’ve written an e-book on this very topic called "Seven Ways New Construction Home Buying is Broken.”
Download our FREE e-book at www.newwholenicheblueprint.com.
We'd love to have your comments. If you have questions, feel free to reach out and I'll see you on my next blog.