The Homebuying Stress Test
“Better under-stated than over-stated. Let people be surprised that it was more than you promised and easier than you said.”
– Jim Rohn, Entrepreneur
The Homebuying Stress Test
During my recent annual physical, my doctor suggested a ‘stress-test,’ so I invited my entire family over for Thanksgiving dinner. This included my three grown kids, sister, brother, 98-year old Mom, my uncle Louie, someone who claimed to be an ex-wife (but, to be honest, I’m really not sure), two distant cousins and their families, and about 8-10 small children (some of whom may still be playing in the downstairs closets). One of my distant cousins surprised me by allowing his 15-year-old daughter to smoke at the dinner table—in front of her kids. OK, so I’m not proud of that side of our family.
Like Thanksgiving dinners, there are other events in life that create the “It-should-be-good-for- me-but-it-really-scares-me” scenario. A roller coaster comes to mind, as does its close relation: buying a new home.
New home buyers are excited and justifiably proud, but they are also nervous and scared, primarily worried that their home won’t be completed on time. Heightened anxiety is the result, and anxious buyers are time-consuming and expensive risks to homebuilders.
Whether you are a homebuilder, lender, escrow firm, or design center, reducing homebuyers’ anxiety must be a primary objective. Let’s face it—we humans hate to be kept in the dark and we like to feel we are in control. Homebuyers need to know what’s happening… or not happening. Transparency must be your theme, your commitment.
In fact, our research with USC’s Marshall School of Business, has confirmed that the No.1 driver of homebuyers’ willingness to refer their builder to a friend is “Communicating construction status before the buyer has to ask.”
- Eliant’s surveys evaluate the degree to which homebuyers say they were pro-actively informed of construction status. Of 130 U.S. builders rated by Eliant, MBK Homes (Irvine, Calif.) is ranked No.1 for this key staff behavior, with customer ratings in the 95-98 percent range for several years.
- Rick Fletcher, MBK’s VP of Sales & Marketing, confirms that this performance has strongly contributed to MBK’s success in consistently selling over 40 percent of its homes based on a friend’s referral (significantly above Eliant’s all-client average of 27 percent). “Eliant’s research is pretty clear about what our team needs to do to drive referral-based sales, and we can absolutely see the impact of pro-active reporting of construction status.”
- Fletcher also credits “My Home’s Story,” a smart-phone app which allows his sales associates to quickly send buyers photos of their home under construction. Kristi Allen, owner of this software firm says, “My Home’s Story was developed to allow builders to easily post photos that buyers will be interested in sharing with their friends and family.” Allen points out that over 80 percent of buyers who receive photos from their builder end up sharing these photos: “Last month, one of our builders had 3,862 unique visitors to 200 buyers’ photos. This is pretty cost-effective marketing.”
Proactive construction status updates help reduce buyers’ anxiety and are good for both homebuyer satisfaction and marketing!