Meritus Homes foregoes sales staffing headaches through a partnership with third-party marketer.
By Brian Salgado
There is so much to consider when launching a new homebuilding company in the Chicago area, including the all-important sales strategy a company employs once its properties are ready to sell.
For its entrance in the Reserve of St. Charles development, two-year-old Meritus Homes elected to hire a third-party sales department to help move its lots. Karen Brunhofer – one half of the husband-and-wife team at the helm of Meritus Homes – says it wasn’t a decision taken lightly.
“When we purchased the lots [in December 2008], the market was still in a stressed environment,” says Brunhofer, who launched Meritus Homes with her husband Brian. “By spring 2011, we were getting enough interest in the property to put an onsite sales associate there full time. We had to decide, ‘Do we want somebody on staff, or should we outsource?’”
Meritus Homes elected to outsource the sales operations to New Home Star, a Chicago-based national new home sales and marketing firm that caters to more than 12 markets throughout North America.
The lots aren’t a hard sell – all of them are permit ready and the development has road, sewer and water infrastructure in place. Meritus Homes is the builder for 88 of the 114 single family home lots purchased by a private investment group.
However, hiring a third party like New Home Star gives Meritus Homes freedom from paying for the overhead that comes with an internal sales team. Brunhofer likes New Star Homes’ internal processes and capabilities with the best technology and sales tools available today. Compared to the other firms Meritus Homes interviewed, New Star Homes’ knowledge of the suburban Chicago real estate market is unsurpassed, as well, according to Brunhofer.
Brunhofer especially appreciates New Star Homes’ “Asset 180” analysis. This process involves 180 questions that sales associates must be able to answer about a community and its market, which gives the seller stronger tools to sell its properties.
“Bringing in a sales marketing team helps us understand our competitive positioning,” she says. “They do more than onsite sales – they have the ability to do more strategic marketing, as well. They are visiting competitors and talking to other builders to see what is going on in the market.”
Another advantage of hiring New Star Homes is the payment plan the companies have set up for Reserve of St. Charles – New Star Homes is compensated only when it closes a sale. That eliminates thousands of dollars in overhead costs, including salaries, office space and hardware, that companies like Meritus Homes normally absorb.
“One of the benefits of having a third party sales team is you’re truly paying for performance,” Brunhofer says. “When you bring on a full-time associate on staff, you have fixed costs. Now we don’t have the risk of bringing on new overhead.”