Based on case studies, here are three reasons resale shoppers buy new construction:
Reason #1 – Their resale agent could not find a resale they liked enough to buy
Case Study – They wanted to buy a resale to renovate. Realtor A showed them five homes they liked for three months, but renovation proposals exceeded their budget. The shoppers decided to stop shopping. At this point, the agent suggested they look at a new home. They visited two new home models, bought one, and thanked the agent. Lesson: Show new homes priced at what the resale plus renovation budget equals.
Reason 2 – They present limited offers for resale.
Case Study: Resale shoppers kept making unacceptable offers to the lender for foreclosures without success. Shoppers were about to give up when their agent suggested they look at new homes at prices equal to the bid offers, and they did. Within two days of shopping, they purchased a new home.
Reason #3 – Their agent did not offer to show new homes, so they shopped for new homes without them. Why did they do this after working with a Realtor? It could be anything. It could be that the agent was not returning calls or showing resales that met their needs. It could be anything related to a lack of expected services. It could be the agent was overbearing and not prepared.
Case Study: This couple wanted some decorating ideas, so they shopped alone on the weekend after telling the agent they were not interested in new construction. During their new home visits, they ran into an onsite sales consultant fully trained to deal with confused or frustrated resale shoppers. These prime new home prospects have already dismissed many resale options. And are financially qualified to purchase a home, or they would not be working with a Realtor—the perfect candidate for a new home.
Of course, other reasons exist, such as wanting the latest floor plans and warranties and the lack of deferred maintenance.
The primary lesson is to always include a new home at the top of your showing schedule, not to sell one, but to take what you might call your client's new home temperature from the start. It will save you a lot of time and help you make more resales or recent home sales.