Six things to avoid saying

Marketing a spec home is as important to the financial viability of your business as gas is to your automobile. Along these lines, maintaining your spec production schedule is akin to mapping your destination and arrival time for a lengthy road trip.

If building a spec home, you better have a sales and marketing plan for selling it. To avoid making common mistakes in your efforts to build and then sell your spec home, make a strong commitment to a plan that avoids the pitfalls you’re sure to encounter if you hear yourself make the following statements:

  1. “I must try to sell this house immediately. This will increase my chances of selling it.” If you have the financial fortitude to wait until the home is ready for occupancy before actively marketing it, there can be many advantages. You can increase your asking price based on market conditions, resulting in fewer objections to overcome in the sales process and the buyer will not negatively impact your selections and schedule.

  2. “I am planning on listing the house with a realtor. There is nothing else I need to do.” Listing your spec home with a realtor is an expensive but effective way to market it. If you are committed to finishing the home prior to marketing it, then do not list the home until it is complete. I have sold many spec homes without listing them and have saved thousands of dollars each time. However, if the home is complete and not sold, list it and work closely with the realtor to guide them through proper advertising, open houses, direct mail pieces and prospect follow-up. Talk to your listing realtor on a weekly basis, and more often if necessary. 

  3.  “The architect’s construction blueprint is good enough. Why should I spend money on a professional artist’s rendering?” Your cost to commission a professional rendering should range from $300 to $1,000 for an excellent color perspective with landscaping. If your product is for sale for $500,000, then the $1,000 fee is .002 percent of your gross sales price. Do yourself a favor and hire a professional graphic artist. 

  4. “I can make all the decisions without a decorator.” Or, equally as self-defeating, “I will wait until I sell it and I will let the buyer pick the cabinets, countertops and tile.” My advice is to hire a professional decorator. Fees should range from 50 cents to $1.25 per square foot depending on the level of services. This minimally should include exterior color choices, all appliance and plumbing fixtures, tile selections, kitchen and vanity design review, countertops and flooring. However — and this is not easy — you must control the designer’s selections to stay within the budgets you establish. Fire any designer that consistently is over budget, and hire another designer. 

  5. “This house plan is OK. I don’t want to change anything on the floor plan so I won’t incur any additional architect fees.” If you were going to live in this spec house, is everything about the floor plan and front elevation the way you would want it to be? If not, spend the time and money to fine-tune the details. Attention to these details will make a difference when a prospect is prepared to make a buying decision. 

  6. “I don’t have a buyer breathing down my neck so I can relax the spec schedule and build my custom homes for my clients. Let the crew stay at the client’s home. The spec can wait.” My advice is to schedule the completion of your spec home with a definite completion date, just as you would for a client. Strengthen that commitment by planning a grand opening with a realtor luncheon followed by a public open house. Commit your project manager and your suppliers and subcontractors to the delivery date so the home is punch-list free for these types of events.