One of the most exciting features a new home affords is its design flexibility and opportunity for customization. For many clients, this is the most enjoyable step in the building process; after dreaming about hardwood floors and granite countertops, they’re ready to roll up their sleeves and choose already!
But it’s not all fun and games. With so many things to consider — from budget constraints to future plans to lifestyle — how can you steer your clients in the direction that is right for them? Helping clients choose options in their new home really comes down to two things: the bigger picture and agent transparency.
Buying a home is no small purchase, so it makes sense that a client would create a personal design budget. While this type of budget is great, it’s also short-sighted. According to Nick Ratliff, principal broker of Cypress Residential Group in Lexington, Ky., it’s important for buyers to set a budget that is both personal and accounts for the value of the home relative to the community.
“So many buyers add a thousand-dollar upgrade here and there and before you know it, the cost of the home is 5 to 10 percent more than anything else in the neighborhood,” says Ratliff. “If (they) get in a bad spot and need to sell, (they) are in trouble.”
But budgeting isn’t just about how much a person can afford, it’s also about making a smart investment. Ratliff suggests buyers put the majority of their budget into the areas of the house that are most difficult or costly to change, namely the bathroom and kitchen.
As an added caution, Ratcliff advises buyers plan ahead. “If the cost to replace cabinets in five years is not even an option to consider, (your buyers shouldn’t) buy the cheapest cabinets,” he says.
Remember, because new homes come with different kinds of upfront costs than a resale home, a buyer’s budget may not allow them to do everything they want right away.
“Just because you are building a new home doesn’t mean you can’t still have sweat equity” Nick notes. “This can range from large things like finishing the basement yourself or smaller items.” With time to research, and no labor costs, encouraging your clients to do their own basic upgrades, finishes and installations can save them money and provide them with a greater sense of satisfaction.
Helping your clients choose options should be based on a far-reaching timeline of about 10 years. Doug Vogelsass and his wife, Twila, run Agents for Change, an Austin, Texas-based real estate company whose mission includes charitable giving and social responsibility. As part of this mission, Vogelsass is committed to being transparent with his buyers when it comes to their future in a new home.
For buyers with a timeline of less than a decade, Vogelsass believes in making very conservative design choices. “Especially,” he says, “when a buyer is an early entrant in to the neighborhood, as they will likely be competing against newly built homes for sale over the next few years.”
For the long-term buyer with a horizon of 10 or more years, Vogelsass notes that he advises buyers make choices for themselves, not for future buyers. “By the time 10 years have passed, the house will likely need cosmetic updating anyway and it is worthwhile to make … decisions that (they) will enjoy for those 10 years.”
Like budgeting, forecasting is about more than meets the eye. In this case, forecasting means making design choices that will stand the test of time and passing fads. Heather Archer, of the Keith Beatty Team in Wilmington, N.C., is keen on steering buyers away from designs that are too trendy and will be unsatisfying to her clients in the long run.
To help her buyers make a decision they will be happy with for years to come, she points them to the online sites likes Pinterest. There buyers can pull from some of the most comprehensive design collections and, in turn, make the most informed decisions. And, if the builder has any homes under construction, Archer encourages clients “to walk through to see options already installed, since it may be difficult to decide from a small sample.”
Throughout the forecasting process, it’s important to consider lifestyle and how a space will be utilized as well. A chef, a writer and a mechanic are all looking to optimize different features in different rooms of the house. Ensure a client knows whether they will use a spare room as a children’s game room or a space to entertain guests, as that can be the difference between hardwood and carpet flooring.
Buyers should put the majority of their budget into the areas of the house that are most difficult or costly to change, namely the bathroom and kitchen. Cindy Hanson Welu, an agent, broker and RE/MAX team leader in Chanhassen, Minn., focuses on her clients’ lifestyle priorities. “I know some agents think it’s important to know what their clients’ … design choices are, but that changes with the annual trends and when prioritizing lifestyle choices,” she says. “The client will know exactly which design choice they want that meets it when looking through the options.”
With all of the information available online, buyers are more informed. Don’t assume that you can persuade buyers into choosing pricier options; assume them to be your intelligent equal. Be honest and direct about what a buyer’s wishes will mean for their budget, future and lifestyle. Additionally you should refrain from swaying their decision making.
“As an agent, it’s important to be as neutral as possible in a buyer’s decisions and not give too much input on a buyer’s selections,” says Archer. “They may not have the same taste. And if you encourage a buyer to pick something specific and they hate it after installation … the buyer may regret it and blame that decision on [you].”
Choosing new home options is definitely an exciting process, but it can also be fatiguing. Keeping up with budgetary, future and lifestyle needs when asked “Tile or linoleum?” can make a simple decision tough.
Help your clients navigate the murky waters of new home options by planning ahead and looking at the broader implications of their design choices. Then, take a step back and give your client the liberty to decide “It’s perfect!”
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