I hope this post helps some of you out there who may be struggling. 

Allison:  How do you approach the builders with a liquidation proposal?  Do you have certain people that you work through?  Local sales reps or sales management?  Just curious...  Thanks!

You don't.  You make the rounds to your local area builders, develop rapport with them-and if you are really persistent, eventually they may give you a few inventory homes to sell. Once they have listed with you, then they will drop the prices as they see fit to adjust fr the market climate. In the meantime you market professionally and give them allthe bells and whistles you can muster.

This is a great blog and a great analogy. All I can say about this year is I am dieting

I like the post but application is a kicker -- I can see my sellers get really excited about a 50% off deal if we doubled the price ! LOL ~ Evelyn

Evelyn

I think the key here is diversity.  Having Inventory Homes listed-gives you a decided advantage over resales.  Builders can reduce their prices more steeply allowing us to have greater Turnover and do dsales like this one which has been enormously successful.  Good luck and sell well!

Allison - This was fun reading ... and now I want a tall stack of pancakes - Its 8:30am and my mouth is watering ... and I am inspired and motivated!  Great Post - Thank you.

Great analogy Allison. Many years in a restaurant really makes this a reality- but I am not sure I can "sell" these ideas to my sellers!

Great analogy.  It's good to pause periodically and evaluate ourselves to ensure we are still following the recipe. 

Allison, this is a very apropriate metaphore!  I really enjoyed reading it!

Allison,

Sounds great but unfortunately or fortunately I don't think our builders are that hungry.

How did you get them to do 50% and still make a profit?

Enlighten us please.

Brenda

There comes a point, when holding the inventory is senseless. Every project must have a beginning and end.  While every region is different, the glut of foreclosures, and banked owned properties in my market, are driving properties to all time lows. As a result, new builder inventory homes have been reduced in order to clear them out, so the builder's can move on. 

Allison, Your post made me hungry!!!! I have been out working with a buyer this week and we have been running across multiple offers all week long. We have also been running into other groups of buyers looking at the same properties. The homes we are looking at are REOs and will be sold in a matter of days because of the pricing. It's all about the price.

Broker Bryant good to hear from you!   There is clearly pent up buyer demand, especially in the lower end of the market.  Mouth watering deals are too tempting for many hungry buyers craving the sweet treat of a great deal to pass up.  Which helps us in the long run.  The return to a healthier housing market won't be served up in an undigestable mound but rather in chewing slowly but steadily bite sized portions (sales)

GOOD LUCKA AND SELL WELL!

Great post, the builders cannot get through this debacle without taking a hit too.  So the ones that see the trees and not the forest will live another day, the ones that try to wait it out, may not be there to enjoy the markets to come.

It's too bad a huge price drop is what it takes to show value and create activity. I'm sure we all would be stacking them up if we were giving them away.

Great Point about seeing the trees through the forest.  I would agree that excessive inventory can slowly drain builder resources-whereas, vacant undevloped land they may hold is less burdensome.

It is in the end a numbers game. A loss here may be a win somewhere else.

Allison - Thanks for highlighting the critical importance of doing research rather than tossing an offer like a frisbee towards the listing agent.

This is wonderful!  So many analogies!   I am trying my best to stack them sweetly:)

Looks like you put some thought into this post, and that is much appreciated.

I've found over and over that PRICE is probably the most critical aspect of selling a house. I don't think I've yet come across a50% price reduction, however. WOW!  you must have had a stampede.

Great way to put this kind of market into perspective and some ingenious ways to work with what is out there. You're right that builders usually need some kind of exit strategy and if a week long program to get excitement back in a development is necessary that is better than the whole project going bankrupt, at least in most cases.

We've seen several builders close their doors here in the Pacific NW, and some of them were outfits that most long time industry people never thought would fold. Being imaginative is really necessary. We're coming up with special financing offers and working staging and property prep into every seller's listing. A local lender has joined in with us offering a 1% closing cost special for every new purchase contract. Some of our sellers are joining in too by offering a closing cost special so that perhaps a buyer in a lower priced bracket can afford to buy a bigger/better home by using the closing cost option to buy down points and qualify for more house.

I call it a bigger piece of the pie.  I just want a biger slice of what is being bought and sold. 

This is a very creative post!  As I have said many times before, it is important to communicate with everyone involved in the transaction; listen and hear what is said to you; and be responsive and responsible!

Great blog Allison, we all need to hear stories like this creative way of marketing

Nice blog but you just killed any comps around the area. I don't want to hurt any of my past clients into thinking their home is only worth half of what they paid for it. My builders are not willing to go that far in this area. I can't see this ever happening in my market.

www.bobsellssumter.com

When you are competing for customers with banks, REO, foreclosures, resales,  the sweetest deals will stir the pot of excitement.  In the end it is win/win customers get properties that are well priced and this case brand new, the builders gets to move on and everyone is happy.

Cute story. However, I'd like to see more real marketing and less 'selling price' by agents/brokers.  Often, selling price is a self serving 'failsafe' used by realtors who lack marketing skills.  It isn't always in the seller's best interest and is what gives realtors a bad name.

Great post, you got my mouth watering. Appreciate you taking the time to motivate all of us!!

Good Marketing will always achieve interest and sales.  Price helps and we must always do what our sellers ask of us..if it means satiating the appetites of hungry buyers with a delicious deal..I do it gladly...service with a smile!

Love the post but can't imagine in our local market builders reducing 50%.  I do feel a good reduction in price would move some inventory in a select few neighborhoods however, the builders apparently aren't that hungry yet!  

Allison,

What a yummy post! In some areas there is  Smorgasbord. Savvy diners know how to pick the shrimp and leave the bread and potato salad.  The secret is to survey the entire buffet, then choose what is the most satisfying.

Super analogy and congratulations on a well deserved creative featured post.

Margaret thank you so much! 

Your selling tactic is interesting. I don't see how that is going to help the market as a whole in your area.  Yes, it may be a quick fix for a builder that is about to go bankrupt, but, what about the home owner that just wants to move up or move down.  This has now hurt the value of his home and it creates the frenzy of buyers making low ball offers. 

I guess I will continue to diet since I don't feel that is the best interest of a home seller unless they are going to go belly-up.   I can't imagine a builder would consider this even in a slow market.  We have builders finishing basements or giving a $15,000.00 incentive, but that is it.  

Good luck and continued success in your market! 

Real Estate is local.  And every market is different.  The competiton for buyers and glut of foreclosures, bank owned, and resale properties is very high right now.  Foreclosurews, and bank owned properties are going to readjust the market value in virtully every neighborhood, everywhere.

Since there are no basements in Florida, that is not an option here.  There are basically two options:

Sell them off

or Not Sell them.

They are now all sold.

Everyone is happy.  The buyers who got these incredible deals are thrilled. They got incredible new town homes at an amazing price; and many of them were first time home buyers.  For them, it was the deal of the decade.