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Selling New Construction in Today’s Market

by Chicago Agent

Like all realms of the real estate business in today’s market, selling new construction requires more effort, diligence and strategy than ever before. The days of opening the door to your model and taking reservations on several units that same day are but a distant memory!

For agents who are marketing new construction, because the market is flooded with highly discounted short sales and bank owned properties, it is extremely important for them to know who their end-buyer is. You won’t appeal to those buyers who are simply interested in “getting the very best absolute price” without consideration for the relative value.

Your likely buyer is someone who has neither the time nor inclination to wait four months for a short sale decision. This is why relocation buyers or buyers who have definite timeline requirements tend to gravitate toward new construction. Agents selling new construction should target the individual who gets excited about the idea of customizing a new home and walking into a move-in-ready, polished product – not someone open to a “fixer-upper.” More than ever before, you are appealing to the convenience oriented purchaser with an appreciation for the “finer” side of life, and values the latest in finishes and amenities.

Once the targeted buyer is identified, then you have two additional hurdles to cross. First, especially at the beginning of a new construction project, the likelihood of ultimate sell-out of a new project is a major preoccupation for the buyer. Presenting assurances to the buyer about the developer’s reputation and financial soundness has become increasingly important.

Secondly, the question of presales and percent sold will affect a buyer’s ability to get financed, as well. The best solution to this issue is for the agent and developer, at the very beginning of the project, to get the project approved either FHA, FNMA or often even the lender who’s holding the construction loan will provide special financing as an inducement to get those initial sales done before pre-sales are at adequate levels.

A wise buyer’s agent will be aware of all these potential issues, as well. Beyond the usual functions and services we provide, inquiring about
the project’s sales and viability as well as the various financing options and restrictions have risen to the level of “critical tasks” for the buyer’s agent when representing a purchaser of new construction.

As with the rest of our business today, completely engaging with all parties in the transaction and demonstrating utmost professionalism, whether on the listing or selling side will ensure a successful and smooth transaction with new construction sales.

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