Suggestions to “Producer”
The most important suggestion we would give to a Homebuilder is that quality and design must be considered first and foremost. A home is one of the biggest purchases a person can make in their entire life. Spending hundreds of thousands of dollars on a single product can be very intense and emotional. With the amount of new homes manufactured throughout the valley, it seems as though it’s hard to pick between so many similar products that are priced and constructed almost the same as the competitor. By offering a product that distinguishes itself from the competition, builders can be sure to attract customers and close sales. For example, Trend Homes began constructing tri-level houses in the Gilbert area that were very unique in design. The square footage of the homes and the price were similar to competitors in Gilbert but the design of these new tri-level homes completely set them apart from the rest. This was the first time a newly constructed subdivision manufactured tri-level houses in the area. There was no other homebuilder at the time who offered anything similar to what Trend was offering which helped them sell every lot before the community was even done with construction. People take pride in their homes and Trend has understood that for the past decade since they began building homes.
Another suggestion is to ensure that the quality of the product being offered is comparable or superior to similar products. Not only should the construction of the house itself be of comparable or superior quality but the HOA rules and warranty issues should be comparable or superior too. Trend was already known for superior quality in homes built previously throughout the valley which also helped most customers make their final decision to purchase a new home. Homebuilders who have a good reputation due to the fact that they’re somewhat veterans of the homebuilding industry (i.e. Trend, Shea, etc) tend to sell homes a bit easier than new homebuilders like Centex and Presidential. Customers should always be completely comfortable with the price they pay for the quality they are receiving.
Promotions of homebuilders are also a key way to attract customers fast. A solid promotion can be a deciding factor on whether or not a customer chooses to buy a home. Especially with the way the economy is today, people are looking for every way to get a deal in order to save money. Recently, a homebuilder in Chandler was offering up to a $20,000 incentive if you were to purchase one of their homes before a certain date. Customers could choose to either use the 20K as upgrades in the house, a pool, or a new vehicle from San Tan Chevrolet. The homebuilder used radio advertisement and billboard space to help reach their audience. I heard advertisements of the promotion on 101.5Jamz at least four or five times and I drove by the billboard almost everyday. Choosing a perfect area for a billboard is essential to successful advertising and that’s exactly what this homebuilder did. The billboard was close to congested areas where there is always a lot of traffic and it was in view of students exiting Chandler-Gilbert Community College. If I was to suggest advertising using a billboard I would suggest the company put it in a location similar to where this one was. Advertising placed like this may have been a great way to reach Rebecca as well. Their promotion was indeed successful and I think it could be a great idea for any other new homebuilder too. The homebuilder was likely to have made this promotion possible because they negotiated business deals with both the Pool Company and San Tan Chevy prior to advertising the promotion. This allowed them to make such an astonishing offer to the public without loosing much profit. The promotion was one of the best I’ve seen a new homebuilder offer since the housing market began to boom years ago.
Another great idea for a promotion would be offering no mortgage payments for a number of months with little or no money down. This is also a very easy way to get people in the door and buying houses. This kind of promotion allows homeowners flexibility and a chance to save more money before they begin making payments on their new mortgage while they enjoy the luxury of living in their new home. It overwhelmingly helps customers make the final decision to buy the home if they aren’t faced with heavy fees or down payments. Trend Homes did a very similar promotion to this on new homes offered in Chandler. Their promotion was: no down payment and no payments for one full year. The promotion allowed people to feel less pressured by the burden of a mortgage payment if they did choose to buy the house. It eliminated the expensive of upfront fees when buying a house which in most cases is a big reason why someone can’t afford to close on a house. These suggestions can definitely help homebuilders who want to sell homes quickly.
For many years, marketers often relied on price to build patronage, a strategy that is increasingly questioned, despite its widespread use. Arguing that price is the strongest one among the 4 Ps (product, price, place, and promotion), they’ve placed great emphasis on it. But we should be careful, because price may be the most misunderstood variable. The importance of price depends on the nature of the product and its buyer. In buying a house, it is a very high-involvement purchase. Unlike most goods such as those bought in a supermarket, housing is not a single, undifferentiated, and homogenous product. It involves more factors other than just price. Houses differ in size, shape, age, building materials, construction, and location; and the house purchased is linked to the purchased neighborhood, local government services and workplace accessibility.
Rebecca has visited about 50 houses before making her decision. And she decided to narrow down her options by choosing ones that both her and her husband liked. Once they agreed they would like a house, they put it aside and then later on they ranked them in order of which one they liked more for the money they wanted to spend. Obviously, after choosing a price range for their future house (here $250,000), they had a big list of houses within that range; and they based their decisions on how much they liked the house. The price really played an important role at first, but later on its significance has faded in the buying process. Instead of cheaper price, Rebecca was looking for more important criteria: convenient location, bigger size, more bedrooms, the specific layout, better and newer conditions of the house and a garage.
So what should the real estate agent keep in mind? Price is only important to find out the price range of the house at first. After that, the agent should have buyer’s best interests in mind to help them to choose the right house. House purchase is a big decision and should be taken seriously. Questions about the important criteria should be asked upon anything else. That could save a lot of time for both parties. Great advices about the location or the neighborhood should be given. Trying to close the deal is not a good way, but the agent should be patient and helpful. He should give his buyers enough information and time they need to make the decision. Furthermore, it is the consumer’s perception of the price that is usually more important than actual price. Between a $ 230,000 house and $260,000 house, Rebecca may not choose the cheaper one. The reason is the cheaper one was built in 1975, while another one is newer and has a larger yard with a side R/V gate. The second house’s $10,000 difference from the price range can be considered as a trade-off for the good things mentioned above. Realizing this, the agent can successfully offer the right things to his customer and the house purchase will become a good deal for both sides.
When making a house purchase, what is the relative importance of each of the 4 Ps? It could be the house itself, its price, its place and the way it’s promoted. As a typical consumer you should find that the most important factors, which influence your decision, will vary depending on the nature of the purchasing decision to be made. In this study with Rebecca Bowler, she said that having a home closer to work and school really helps her by not wasting time driving around. Price is not the most important factor for her, but place is much more significant. The couple also prefers a place which is convenient for them to visit their families. They also like going to the lakes, which their house location should be nearby. These specific criteria will be necessary for the agent to tailor his searches in favor of the couple’s interests. The agent should be knowledgeable enough to know there’s a relationship between price and place. Price varies enormously within and between cities, even for similar dwellings. The same houses in Tempe and Queen Creek can have very different prices due to their locations. For this couple, a house in Queen Creek is too far away and one in Tempe may cost too much for the quality they wanted. The agent’s job is to help them find a place which isn’t too far away and still affordable for them. An experienced agent should advise them to look at houses within Chandler, Gilbert, and Mesa areas because they both go to ASU and work in the East valley. Moreover, any advised houses should fit with their expectations and interests.
There are many real estate agents who can show you houses. But when it comes to accompanying or after-sale services, there are just a few who offer them. If you are a lucky person to find the best real estate agent, he or she will take away all of your troubles. These are things he can help you:
♦ Arranging a phone line
♦ Connecting a computer
♦ Arranging power, water, and gas supply
♦ Arranging discounts on building or renovating materials
♦ Arranging plumbers to examine your house’s sewage system.
All of these can be a part of the agent’s service and if so, the buyer has the ease of mind that a potential nightmare can be fixed without paying for any extra fees. After closing the deal with an agent like this, the buyer is more than happy with the service they’ve received. And they hope that the agent will remain a good friend and frequent their new home. Or, at the very least, be a involved with any future purchases.
While the team is unsure whether or not Rebecca received these services from her agent, we believe that after-sale services are an opportunity to spread the good fame for the real estate company and their agents. The agents themselves should know this better than anyone else.
Among the marketing sources, the word-of-mouth effect is the most powerful tool. The buyers will refer an agent’s services to their friends, their families or anyone they know, and referrals will go further and further to anyone who is going to make a house purchase. Often times, it is word-of-mouth that gets an agent their business, so it is in their best interest to go above and beyond in services they offer to their clients.
Different Approaches
Because the nature of purchasing a house is highly involved, we wanted to be very specific and detailed in our questions so that we could understand Rebecca’s motivations. An important thing we considered in the project was how to apply the nature of consumer behavior to the specific questions for a comprehensive interview. It was also helpful for our group to explain the nature of the interview to her so that she understood what we were after. The sequence of the questions shifted from environmental and individual elements into detailed contents related to the consumer decision process. It was also our intention to ask the questions in terms of analyzing how their answers dealt with situational and personal factors. For example, if Rebecca was in different stages of aspects such as social class, culture, values, knowledge or lifestyle, she might be considering different decisions in her purchase process.
Another thing we thought the project had to focus on was about the feedback between the information process and consumer decision process. To be more specific in details, we wanted to ask how her pre-purchase alternatives were narrowed down to the final decision. When we asked her how she chose a real estate agent for the house purchase, she mentioned her husband’s friend and uncle as real estate agents to help their purchase. In the answer, we felt that as first time purchasers for a house, they might want to get reliable information from their relative or friend. Along these lines, we thought word of mouth was very effective for high involvement purchase. However, Rebecca also set important criteria that had to be met such as the size, layout, location and reasonable price (according to their saving status) of the house to evaluate given options. We felt the criteria were key determinants to how she conducted her internal and external search for the home.
After narrowing down her options and finding a home that met her criteria, the next step was to enter the negotiation process between the buyer and seller. How much she was satisfied in the post-purchase phase could have depended on how successful the negotiation process was. Fortunately, the negotiation seemed to be enough to put them into high degree of satisfaction.
Finally, we asked her if she had to do the purchase process again would she change anything. She seemed to be satisfied but since she has not moved into the home as of yet, we could not develop any important insights in terms of post-purchase behavior. Rebecca’s purchase views have been changed by the memory she has of feeling unsatisfied with her former agent. This memory is likely to stay with her and may be a key factor if she ever purchases a home again. It will very likely show up in her internal memory search during the pre-purchase evaluation. This also showed us how much an initial aspect of stimuli could change a pre-purchase alternative evaluation.
Interview Questionnaire
Name:
Age:
Sex:
Ethnicity:
Marital Status:
Number of individuals in household:
1.)Are you working?
If so, how many hrs/week?
2.)Are you a student?
If so, are you part-time or full-time?
Where do you attend school?
3.)Is there anyone else working in the household?
If so, how many hrs/week?
4.)Are they a student?
If so, are they part-time or full-time?
Where do they attend school?
5.)What is the gross annual salary for the household?
6.)How long have you been married?
7.)How long have you been talking about buying a house?
8.)Had you ever bought a house before?
9.)What was the first steps you took after you talked about buying a house?
10.)How long was it from talking about buying the house until you would say you were serious?
11.)Did you contact a real-estate agent?
12.)How did you choose your real-estate agent?
13.)What was the first things you did with your real-estate agent?
14.)How helpful was your real-estate agent?
15.)What was your financial plan for buying the home?
16.)Had you saved up money for a down payment?
17.)How did you determine what your limit was on buying a house?
18.)What was the important criteria once you started looking for a house?
19.)How did that criteria supplement your lifestyle?
20.)Was there ever disagreements between yourself and your husband about the criteria or likes/dislikes about homes?
21.)How did you resolve that?
22.)How many houses did you see with your agent?
23.)How did you narrow down your options?
24.)What was the process after narrowing down your search?
25.)How many offers did you put on different houses?
26.)Once you made the offer on this house what was the process until you everything was complete?
27.)If you had it to do all over again what would you change?
28.)How do you feel about the house you purchased?
29.)Is there anything else that happened, or you took into consideration before, during or after your purchase?
Interview Questionnaire
Name: Rebecca Bowler
Age: 25
Sex: Female
Ethnicity: Caucasian
Marital Status: Married
Number of individuals in household: 2
1.)Are you working?
Yes
If so, how many hrs/week?
40
2.)Are you a student?
Yes
If so, are you part-time or full-time?
Part-time
Where do you attend school?
ASU Tempe Campus
3.)Is there anyone else working in the household?
Yes
If so, how many hrs/week?
40
4.)Are they a student?
Yes
If so, are they part-time or full-time?
Full-time
Where do they attend school?
ASU Tempe Campus
5.)What is the gross annual salary for the household?
$85,000.00
6.)How long have you been married?
9 months
6a.)What did you live in when you first got married?
We lived in an apartment that was being converted to condos and sold as such but they were high priced and not many sold, so they switched it back to renting and those who had bought were stuck with their condo amongst us renters.
7.)How long have you been talking about buying a house? 5 months
8.)Had you ever bought a house before? No
9.)What was the first steps you took after you talked about buying a house? We started saving money in a savings account and we also started going to open houses on weekends to see what we liked.
10.)How long was it from talking about buying the house until you would say you were serious?
It was about 2 to 3 months.
11.)Did you contact a real-estate agent?
Yes.
12.)How did you choose your real-estate agent?
My husbands best friend and former room-mate was an agent.
Then a second one that was my uncle.
13.)What was the first things you did with your real-estate agent?
We told him the price range, the minimum rooms/bathrooms we wanted. We discussed what areas we thought we would like to live in and asked his advice as well. He then set up a search and sent over the results for us to look at and told us to pick our top ten.
With the second agent (my uncle), it was much easier. We told him where we were looking and the price range, the rooms, the square footage, and that we wanted tile roofing, a garage, and a yard with a side R/V gate. He had a great program that pulled all the listing that fit our specifications and we could login and narrow them down to possibilities, favorites, and rejects. It was a much better system that what the first agent gave us. Also it sent email notifications each time a new list went up or if there was a change in the listing we had marked. We could even put comments in after seeing the home saying that we liked it or to remind us of which house it was. Once we looked at some and had some favorites we went out to see them.
14.)How helpful was your real-estate agent?
This real-estate agent was not the most helpful. He was doing it on the side and had another full-time job. We did not have allot of spare time since both of us were going to school and working full-time. It seemed like he was not really up to date with everything as well. We put several offers in on “short-sale” homes and we would not ever hear back. It took him a while to figure out what “short-sale” meant, and why we were not hearing back. Also he seemed to push us into liking every home we went into. He would tell my husband, “This is really nice. It would make a great home or investment property. I might buy it if you decide you don’t want to.” By the fifth straight house that he said this I wanted to tell him, “then why don’t you then.” I didn’t because he is such good friends with my husband.
In the end we put in on one house and they accepted. After we paid $350 for the home inspection and some things came back that we did not feel comfortable about, we asked him to ask for the seller to fix them and he kept telling us it was no big deal. I think he just wanted the sale to go through and did not consider what we wanted. After telling my husband how I felt, my husband fired him and we got a new agent.
The new agent we chose was my uncle. He had been doing real-estate for 15 years and I knew he would have our best interests in mind especially after we told him what happened with the last guy. He was super helpful. He knew all the answers to the questions we had and got back to us in a much timelier manner than the first agent. He also gave us great advice about houses that we had not considered before like location, the neighborhood average house size, and any congestion issues for traveling.
15.)What was your financial plan for buying the home?
We wanted to save up enough to get into a home, but we also wanted some extra for just in case something happened like a loss of a job for a few months. My husband works for Wells Fargo Bank so that is where we would be getting the loan due to a good rate and discounts fees. He pretty much takes care of all of that since that is what he does for a living and I do not understand it as well as he does.
16.)Had you saved up money for a down payment?
Yes we saved up to 10% of a $225,000 house. We will not be able to put all of that as a down payment though since there are other fees involved that need to get paid.
17.)How did you determine what your limit was on buying a house?
We sat down and went over how much each of us made and how much we are currently spending on rent. Then we decided on how much we could afford if only one of us was working for a few months. We do have a savings of a few thousand dollars for just in case, but we do not ever want to use that. After looking at all these items we decided we could go as high as $250,000.00 but we would want the seller to contribute some money towards the closing costs.
18.)What was the important criteria once you started looking for a house?
The size of the house was important to us and that it was a single family home and not a condo. We wanted to have at least a three bedroom, two bath home with a nice sized kitchen. My husband really wanted a large yard with a R/V gate access for his “future” boat. The layout of the home was important to me. I cannot tell you exactly what layout I like because there was a few that I liked that were not even close to being the same. The one we went with has a split floor plan which was nice.
Location was also key since we both go to ASU and work in the east valley. We only looked in Chandler, Gilbert, and Mesa. Queen Creek was way too far away for us, and Tempe cost too much for quality we wanted. We also wanted a newer home or at least built in the last ten years. Also my husband did not want to deal with putting a new roof on so he wanted the tile roof which I thought looks better any how.
A must for my husband was the garage. It needed to fit two cars and some shelves for his tools. I wanted a large master bathroom with double sinks and a large enough walk in closet for all my clothes and shoes. That might sound bad but it is true.
19.)How did that criteria supplement your lifestyle?
Well for both of us having a home closer to work and school really helps us by not wasting time driving around. Also my family is down in the north part of Tucson. Staying on this side of the valley makes it easy to go home and visit when we want. It also helps with visiting my husband’s family up in northeast Arizona. We also like going to the lakes and the location we decided on was due to the location of the lake near by.
20.)Was there ever disagreements between yourself and your husband about the criteria or likes/dislikes about homes?
We did look at a few homes that my husband liked but I did not. I just didn’t lie the flow of the layout or the feel of the house and he did. He also wanted to have a pool but I did not. I had a pool going up and know how much work it is to handle, and it cost more money to run it. I also am afraid raising kids around a pool. I think it is something we can get once they are old enough to swim and help out with it.
The biggest disagreement is about color of the walls, but we do agree on certain colors that work for both of us. This is not too big of a problem since we can paint it if we do not like it.
21.)How did you resolve that?
We discussed what each of us liked and agreed that we would not get mad if we really like a house and the other did not. We decided to not get any home that we both did not like a lot since there are so many homes to choose from at this time.
22.)How many houses did you see with your agent?
With the first agent we saw about 25 homes, and with the second, (my uncle) we saw about 25 as well.
23.)How did you narrow down your options?
Either we both kind of liked it or we threw it out of the running. Once both of us agreed we would like a home, we put it aside and then later on we ranked them in order of which one we liked more for the money we wanted to spend.
24.)What was the process after narrowing down your search?
We decided to put an offer in on the home that we liked the most. This was tricky because you do not want to come in to high and then have the seller counter even higher, but if you come in too low the seller does not take you seriously and might not even counter offer.
25.)How many offers did you put on different houses?
We put down about four offers with my husband’s agent friend, and one was accepted after negotiation. We also put three offers through with my uncle and had the one house that we now have be accepted after negotiation. We had another offer out at the same time but the time frame had expired for the seller to get back to us. They actually accepted our offer as well but we did not take it because we got the house we really wanted later.
26.)Once you made the offer on this house what was the process until you everything was complete?
We had to wait to see if the deal was going to be accepted. My husband found out about this house from one of his associates who is related to the seller. They needed to sell their home because the husband had a new job back east that was making them move. The house was listed at a higher price than we wanted to pay but in the end they came down quiet a bit.
After they accepted the offer we had to put our earnest money down at the title company who would start the title work. We then had an home inspector come and look at the house along with a termite/pest control guy come. After they were done they showed a few minor things that needed to be fixed like two tiles on the roof and a possible trimming of a tree out front. They also recommended we get a HVAC person to come look at the AC/Heater unit. They said their report showed it worked just fine.
Then next thing we did was to call a broker to get insurance together. At the same time my husband got in touch of the mortgage person at his work to finalized the deal. At first we wanted to go with a conventional loan which we were qualified for but the rules changed due to the housing crisis, and now they require 10% down which we could not afford so we switched to a FHA loan which requires W-2’s and bank statements showing the money we have. They also wanted past pay check stubs. They scheduled a home appraisal to make sure it was worth what we are buying it for and that came back ok.
Now we are just waiting for the title company to do their thing and then to sign the documents. We will do all of that three days before closing which is on April 30th. At that time there will be a final walk through as well where they will give us the keys to our house.
27.)If you had it to do all over again what would you change?
I would have never went with a agent that does not do this as a full time job. We missed out on a home both me and my husband adored in Chandler because our agent waited a few days to get something together. I also will be more relaxed next time since this was the first time and I was really nervous. I think I needed to enjoy it more, which I started to do at the end of the process. Also saving more would always help, but even though I say that I think we did pretty good.
28.)How do you feel about the house you purchased?
I love it and cannot wait to move in. We drive by it at least twice a week even though it is 15 miles away.
29.)Is there anything else that happened, or you took into consideration before, during or after your purchase?
I think we took advantage of the timing of the housing market crash. As we were looking at homes, we saw a start of increase in more people buying. At first we would be one or two people looking at a house but at the end most homes had not only a few people looking at them, but they had two to three offers on them.
