Sales is a tough job. But for those working in today’s housing market, with 30-year mortgage rates north of 7.5% and the median home price hovering just below $400,000, getting buyers to sign on the dotted line is a major challenge.
Roll back to 2019 through 2021 and people were paying over asking price, entering bidding wars, and buying sight unseen. Salespeople needed to do little more than take orders. The landscape for 2024 is much different. As a result, builders are realizing their once successful teams are inexperienced and unprepared for hitting sales goals in this type of market.
Fortunately, there are several strategies that can help builders get their sales reps back on track.
Building the Right Team
Experience matters. Building a winning sales team starts with recruiting individuals who have successfully navigated down markets, even if that experience is outside of real estate. Look for candidates who have a passion for sales, a track record of wins, excellent communication skills, and a genuine interest in the industry.
The right sales pros understand the stakes. They sell with the right motivation and purpose. They see their role as helping people make what is probably the biggest purchase of their lives. That means skillfully navigating the needs, emotions, and financial realities of potential buyers to make the deal.
Expanding the Sales Job Role
Gone are the days of just waiting for buyers to walk into a model home or submit an interest form online. The 2024 market requires much more hustle. Make sure the job description includes inbound marketing tasks. This includes efforts like generating social media content, creating videos, sending emails, and hosting in-person and digital open house events.
Make cold calling part of the job using existing leads or new contact sheets. Many homeowners are ready to move but hate to give up their low mortgage rate. Sales pros ready to make them an appealing offer on something new may bring them back into the market sooner.
Encourage the sales team to speak up about what additional tools they need, such as website enhancements or new technology to bring buyers to the table.
Retaining Talented Team Members
A good salesperson is worth their weight in gold. However, those accustomed to high commissions may be looking to take their talents elsewhere in this market. Ensure commissions remain competitive but look for other incentives as well. This may include sales recognition programs, alternative benefits such as wellness plans, and bonuses based on factors beyond closed sales deals. Consider things like leads generated, average deal margin, or customer acquisition costs. These can help offset lost revenue from less deals while still protecting a builder’s bottom line.
Never forget to celebrate small wins. They can add up to something big. Shawn Karol Sandy, founder of The Selling Agency, said, “Keeping reps has less to do with big bonus checks than it does with everyday victories.”
Improving the Sales Team
To build a winning sales team, focus on continuous improvement. Encourage collaboration and knowledge sharing between the sales team and other departments. The bigger companies grow, the more siloed they become. Knowledge is power when it comes to having the right message and information to close deals.
Regularly provide feedback and coaching to help sales professionals grow. Retain and develop top talent by creating a career ladder and mentoring program that promotes professional development and job advancement.
Invest in tools and technology that streamline the sales process. This gives the team more time talking with potential buyers than buried under administrative work.
Empowering the Team with Alternative Options
Sometimes a beautiful home alone is not enough to seal the deal. Educate and empower the sales team to use alternative offers to sell a home. These strategies might include:
- Promoting your 2-10 warranty program – Higher interest rates also mean higher buyer hesitancy. Empower your sales team to help put those buyers at ease with more information about the home’s warranties. PWSC, a PCF business, has a 2-10 warranty that also demonstrates the builder’s commitment to quality for 10 years and can be a true sales differentiator.
- Offering an extended warranty – Sales pros can quantify the value to the homeowner of having their home’s systems and appliance protected, especially against normal wear and tear. PWSC’s HomePRO is a great sales tool for giving potential buyers added peace of mind and a financial safeguard against “uh-oh” expenses that inevitably pop up.
- Adding upgrades – Selecting among finishes, upgrading appliances, or adding customized touches makes a house feel like a home. Equip the sales team with the knowledge to manage upgrades that make a buyer feel attached to their potential new home without breaking the bank.
- Reducing home prices – This certainly shouldn’t be the first go-to, but knocking a little off the price can be enough to have buyers picking your build over other options.
- Mortgage rate buy-downs – Lowering mortgage rates is the most expensive option and the most popular. Currently builders are paying twice as much in buy-downs as they would in a normal market. While this shouldn’t be the first lever a salesperson pulls, it is effective with buyers concerned about the cost of financing.
Investing in the sales team usually isn’t a builder’s first priority, but in this market, maybe it should be. Developing the right sales team requires a strategic approach that grows skills, expands the job role, and empowers the team to attract and close deals. After all, if your sales team learns how to thrive in a down market, imagine what they can accomplish when things turn around.
Discover how PWSC and PCF Insurance can work with your sales team for homebuyer options proven to drive deals.
By Lindsay Tingler, PCF Construction Practice Leader
