Beyond granite countertops to sell homes

Builders once measured their success by the size of their bank accounts. But given the change in today’s market, a lot of builders consider themselves a success if they are simply still in business. With the economy still fighting to rebound, builders find themselves scrambling to find new ways, or some call them gimmicks, to sell homes and stay afloat in this market.

Now that the tides have turned and the majority of builders are building green, a tight building envelope and good indoor air quality isn’t enough to sell homes anymore. That is why Gene Myers, CEO of New Town Builders in Denver, has started adding photovoltaic solar to all of the homes his company is selling.

“I’m just happy to be in business,” he says. “That could be due to the solar—I really don’t know.” But all signs do point to solar as one of the reasons that Myers not only is in business, but is not lowering his prices and is still managing to move houses.

“It’s an incentive-driven market. Builders (in Colorado) are giving away money to sell houses. We’d rather give away solar.” Myers has seen builders taking on discounts in the $20,000, $30,000 and even $40,000 range in order to move houses. “We hope to show the homeowner how much money they’ll save if they buy one of our houses with the solar,” he says.

One way Myers can afford to add solar to each project is by cashing in on incentives being offered by the government in the form of rebates for adding solar. Colorado offers rebates that cover two-thirds of the costs of buying solar panels.

“Product differentiation is an important part of selling a home,” Myers says. “You have to do a lot things right to survive in this market, but we think this (photovoltaic) is part of what we’re doing right. It’s a major hook with buyers; it’s a really cool incentive to buy our homes. It creates a very strong product differentiation from other builders.”

While other green builders in the area are going on out of business, his company is surviving.

“Solar raises the interest in our project and then gives us the chance to talk with potential clients about all of the aspects of our houses. Our home energy rating score (HERS) is in the 50s. So we can show them that the home will use 50% less energy and save 50% of energy costs.”

Myers is also using testimonials from New Town’s customers who are so ecstatic with their energy savings that they love to share their stories. “We have a customer who bought a 2,200-square-foot home from us in January,” he says. “Instead of receiving an energy bill, they received a credit.”

Amenities: when less is more

Before the change in the market, customers who were buying second or third homes searched for homes with numerous extra amenities. If they were buying a home in a resort area, one of the questions would inevitably be about the clubhouse, the hours of the clubhouse, and the size of the pool or spa. But with the downturn in the economy, some buyers aren’t looking to rack up the extra costs that come along with all of these amenities, and are simply buying for the location.

David Sinkey, CEO of Boulder Creek Builders, based out of Boulder, said his firm, which builds communities throughout Colorado, has seen a lot of this type of thinking in the past few years.

Instead of building a community loaded with amenities, which can tack on fees for residents, Boulder Creek has made a point to build communities near public amenities. “We’re trying to not put in amenities and let customers add them in a la carte. By building near public amenities, it cuts down on home association fees,” Sinkey says. The latest Boulder Creek communities have opted out of building pools and rec centers. “We like to find ourselves adjacent to amenities, like public recreation centers. Pulte is one of our biggest competitors. They have a community near one of ours that has two 30,000-square-foot recreation centers. While that has helped them sell, it has helped us capture people who don’t use those recreation centers enough to want to pay for them every month but have those amenities close by to use when they want,” he says.

“A lot of our clients are empty nesters, and they’re not all that jazzed about throwing on their Speedo and going down to swim laps in the pool. What they are excited about is some trails where they can go ride their bike or walk for a few hours. It’s exactly what they want to be doing, and it doesn’t cost them anything on a monthly basis.”

Boulder Creek communities are also completely maintained, which is a big selling point for a lot of their homeowners.

“It’s like a condo, but they have their own house. The home association fees they do pay take care of the exterior of the home and yard work, which leaves them more time to go walk the trails.”

The size of Boulder Creek’s homes is another thing that has helped the company sell in this economy.

“We typically build smaller homes than other companies in our areas. A smaller home is more efficient than a big home, even if the big home is designed to be efficient. Six months ago customers weren’t interested in hearing about energy efficiency; now they are asking about it. And we do have a lot of people buying for efficiency,” adds Sinkey. But while some builders are scaling back on amenities to sell homes, others are making an effort to include more.

Christy Smith, president of Casas del Oso Luxury Homes in Scottsdale, AZ, says that with the current market nothing is really helping her company sell homes, but that isn’t stopping her company from outfitting their homes for high-end green-minded customers. Casas del Oso tries to appeal to customers, she says, with unusual amenities such as electric car hookups, an area in the garage for dry cleaning to evacuate toxic gases before bringing them in the house, security systems and master closets with extreme built-in storage.

“Our market is really traumatized, but when the market started to die in 2008, we made a decision not to scale back on amenities,” says Smith.

While recent reports have shown that home sales are on the upswing, it is still a buyer’s market, and customers are looking for that extra something to sweeten the deal. While some builders are stocking up or cutting back on amenities, it seems that the one thing customers are still interested in are the little extras that will help them save money or enhance their lifestyle.