Everyone loves viewing brand new homes for a number of reasons. For myself, the near-perfection of a model home lets me imagine a near-perfect life. 
All of my senses are pleased when entering a model home: My eyes are pleased with the professional decorations and strategically selected furniture. My ears hear the sound of a tranquil fountain blended with classical music piped in through speakers in every room. My nose smells carefully selected fresh fragrances. My feet feel the supporting firmness of brand new carpet.
Emotionally, I feel overwhelmed suddenly consider buying a new home in this development.
Although my rational self is somewhat drunk in all of this indulgence, I still can get a sense of value. I view the home price sheet and the prices appear to be reasonable over the resale homes in the area. I convince my wife that the monthly payment is within our reach and we start conversations with the salesperson in the office.
Similar to buying a car, we are shocked at the price we would have to pay when we add the lot premium, minimal upgrades to even remotely resemble the model home, and how much it would cost to have the surrounding dirt professionally landscaped. By the time everything is taken into consideration, we would be paying anywhere between 10-20% above a similar-sized resale home.
Knowing that the “newness” of the home will be short lived, we decide to take the plunge anyway.
FACT: After taking into consideration the cost of landscaping and upgrades, a new home in North Orange County will cost over 15% more than a comparable resale home.
What can we learn from the New Home Builders to achieve the most money for a resale home?
While there are obvious things we can’t duplicate such as the “newness” of the area, bank canvas of the neighborhood, and minimal upkeep the first few years, there are still aspects that can maximize the emotional appeal of a home:
Market Exposure: If there’s any one thing large home builder knows, it’s how to market a new development. You’ll see large billboards, commercials, full-page ads in the newspaper, and tons of internet sites to promote the neighborhood. They even give it a fancy name that many can’t pronounce.
For a resale home, a local agent can carefully select professional photography, create property brochures (not “flyers”), and maximize website exposure by paying extra for premium positioning.
Home Staging: Model homes are decorated with one purpose in mind: to convince a homebuyer that this home is perfect for their life. Most buyers are terrible at using their imagination. When furniture and even fake food on the counter is displayed, it brings the buyer closer to thinking the home is destined to be their home.
With resale homes, there are common mistakes of having the home either too empty or too cluttered. Too much furniture and family photos will distract the buyer and they will always feel it belongs to someone else. On the other end of the spectrum, a completely empty home can feel “cold” to a buyer. Many Realtors offer the option of having the home professionally staged.
Careful Control of Supply
Ever wonder why a builder releases their home in “phases” as oppose to just building the whole development at once? One of the reasons is to control the amount of homes available. Scarcity is a fundamental aspect of value. Pushing buzzwords and cliches such as “limited release”, “priority waiting list,” or “only 3 homes left” reinforces scarcity to the buyer.
The release of your home has to take into account the competing inventory nearby. If there’s a home down the street with similar square footage, why not wait until it enters escrow? If nothing is for sale in your neighborhood, why not make an extra push to have the home ready on the market?
Availability of Showings
Many builder sales offices and models are open 7 days a week with common hours of 10 AM to 6 PM. This allows everyone’s busy schedules an opportunity to view the model homes.
With a resale home, making the home available for showings with a lockbox is a must. Anytime you restrict showings, it can possibly result in the top-paying buyer going elsewhere, regardless of market conditions.
Market Seasoning
Home Builders NEVER place an ad in the paper one day only to sell the home the following day. Similar to a movie release, they follow a timetable that has milestones and announces dates well in advance. Some examples include, “First Phase released this weekend” or “Waiting list starts this Saturday”.
This ensures that the all the interested homebuyers will know about the new development and ensure the highest-paying buyers will have a shot.
In resale, I always shake my head every time I see a home sold in a single day or even two days immediately after inputting the home into the MLS database. Even with today’s seller’s market, you’ll want to season your listing properly. A good agent would know the perfect balance and timing.
Cooperation of local broker community
Just like anything in life, this is a relationship-based business. While Home Builders spend tons of money on advertising, they still offer compensation to local brokers. In many cases, a buyer needs to sell their own home and a broker can manage their transition. Furthermore, working with local Real Estate agents has a “multiplying effect” on the exposure through word of mouth referrals and occasional entry into the local Real Estate board’s Multiple Listing Service (MLS).
Case in point: When builders struggle to sell homes, one of their common options they’ve used as opposed to reducing the price, is to increase the Realtor commission. This not only creates an extra incentive for agents to get the word out, but it also protects values for the homeowner who recently purchased in the development.
With a resale home, make sure that your agent has a track record of selling their listings with outside offices. Unfortunately, there are always greedy agents who only care about their commission — not the best offer on your home. In my opinion, an agent who’s always looking out for their seller’s best interests doesn’t “double end”, or sell their listings without another agent more than 10% of the time.
We can go on and on, but you get the point. Homebuilders have been selling homes for more money for decades. Why not copy some of their techniques?
Ask Edwin what he would do to make your home appeal more to buyers at 714-501-2732.
I’m always surprised that some people selling a used home don’t even do some of the simpler things you mentioned.
But what I really found interesting was that you’ve seen builders increase commission rather than lower price. It almost seems counterintuitive, but I can see how that incentive would work