Custom homes are great… but not the easiest challenge for real estate agents. The people who design and build them want very specific things, and they don’t always take into consideration what it will be like to have to sell those homes in the future. It can make the life of a real estate agent much more difficult when the perfect buyer for the home is the one selling it! Here are some ways to overcome the biggest challenges of selling custom homes.
Challenge #1 — Setting the Right Price
Setting the price for a home goes a long way to getting the right interest when putting it on the market for sale. With a custom home, things get more difficult and for two reasons.
First, custom homes tend to be more expensive to build than similarly sized homes in the area. That means the seller is likely going to want to set the price higher too. In fact, depending on their financial situation, they might not be able to afford to price it as low as you’d like. If that is not a major hurdle for the seller, that can make things easier for you—but be prepared to navigate that touchy situation.
The second reason has to do with comparative market pricing. With most homes, you usually have a large pool of similar homes in terms of location, size, age, etc. which makes it easier to set the price. Depending on just how unique the house is, you might realistically have no comparison to make at all.
If comparative market pricing doesn’t work, you can try a couple of other methods. First, you can set the selling price based on what it cost to build it—take inflation into account if it is older, or find out what it would cost to build it right now. Second, you can get more of a rough estimate by dividing the investment rates of the home by how much money would be left if you rented the home at a normal market rate.
Challenge #2 — Selling to a Smaller Market
One of the other major challenges to selling a custom home is that its unique nature means that the pool of potential buyers is automatically smaller to some extent. The more abnormal the home and its features are, the smaller the pool.
The problem is that the vast majority of homes are built with a general idea of standards in mind, specifically to make them easier to sell. So they’ll be about the same shape, about the same size, with about the same floor plan and features. Custom homes are designed and built with one person in mind — the person who builds it.
When potential buyers are looking for a home, they do not want to put a lot of money, time and work into changing a house to suit what they want. Instead, they want to buy a house that is more or less in line with what they want from the beginning. The challenge for you then is how you can show more people that this IS the house that they want? It is a balancing act between talking up the best features and smoothing over issues of the more niche ones.
Challenge #3 — Having Patience
As a result of the first two challenges, custom homes can take longer to sell. With higher prices and a smaller buying pool, it can take a while until someone with the money and genuine interest in the custom home’s unique set up and features come along. Exactly how long it takes to sell the home: depends on a number of factors, such as the house itself and the location. So the challenge is to stay patient and use the extra time constructively to help sell the house in due time.
This is compounded if the custom home is also a higher end luxury home. The market for custom homes and luxury homes are both niche to begin with, and when you add them together, it can be a selling challenge. For lower end custom homes, you just need to be patient. If the seller is getting antsy, you can take the time to provide advice on projects they can undertake that would improve its desirability. In addition, you can use the extra time you have to put more time into a comparative market analysis, marketing, and preparing the house to show.
Challenge #4 — Getting it Ready to Show
It is worth working with the seller to help make the homeless difficult to sell. Where you would normally suggest the home gets a minimum level of repairs, new paint jobs, and so on, you should really emphasize going above and beyond. To get around this, it’s a good idea to depersonalize the custom home as much as possible. In general, staging a house to sell it can have a big impact on how fast it sells and for how much. The National Association of Realtors have done studies to back that up: Click Here
Make sure anything that is obviously personal is removed, hidden, put aside, etc. This includes photos and paintings on the wall, if possible. Having the rooms and décor set up as neutral as possible also helps. If you can, have the seller put as much of their possessions and furniture away or cover them up through creative arrangements. The idea is to present it as much as a clean slate as possible, so it is easier for buyers to see their ideal vision of living in that home.
You can make recommendations to the seller to boost the curb appeal and depersonalize the more unique features. Replace the roof, clean up the exterior, re-sod the lawns, remove all the weeds from the gardens, and so on. If they have the money for it, you can suggest they even do a few small and simple renovations and remodeling projects that depersonalizes the unique design features of the kitchen, bathrooms, and bedrooms. You can also replace the appliances so they are brand new, anything to make the idea of moving into it easier for buyers.
#5 How to market/advertise it
Now that the home has been priced and prepared, you can decrease the time it takes to sell a custom home by using effective marketing and advertising. You want to be able to show potential buyers in the research phase online how appealing the custom home is. To do this, you should put into practice two strategies.
First, in all the photos, videos, and virtual tours you might put online for the custom home, make sure you show a ‘depersonalized’ home. Use whatever tricks you can think of to show the most generic and normal features other homes might have. Downplay the unique features that you know will seem the most weird to the majority of buyers if possible by playing with different angles and light.
Second, for the unique features that might have more general appeal, really showcase them and use them to create a story for the home as a whole. If the custom features help save money, if they’re more environmental, if they’re fun and clever design ideas that solve a problem most generic houses have, make sure you point them out. Not every custom home feature will be problematic, so even if they’re unique they might still have general appeal.
About the Author: Matt Doyle is the Vice-President and Co-Founder of Excel Builders, a custom home building company serving Delaware and Maryland. The company specializes in ICF and custom-built, energy efficient homes. Matt grew up in the construction industry and he has a Bachelor of Science degree in Entrepreneurship from the University of Alabama. He also has an extensive background in internet marketing and has worked with some well-known international companies such as Best Western, McGraw Hill Construction, Sharp, and Canon. Connect with Matt on Twitter.