‘Got New’

*‘Got New’*
**By Lew Sichelman**

LewS***Have you hugged your builder lately? Have you ever hugged a builder at all?

****I ask because a coalition of builders, perhaps a thousand strong, are about to embark on a major push to convince wanna-be home buyers that new construction is better than resale, and the fact that builders have close ties to lenders with plenty of mortgage money is going to be hung out there as a major reason.

****Here’s the skinny: Beginning in March, builders will launch what we’ll call the “Got Milk” ad campaign for housing, with the goal of capturing up to a 20 percent share of all home sales. If they are successful, that means roughly 900,000 deals a year.

****Currently, builders are nailing about a 7 percent share — less than 400,00 sales — so they’ve got a long way to go. But I’ve seen and heard some of the ads, and I’m convinced — new is better, far better.

****But the thing is, research shows that buyers don’t need to be convinced, at least not that much. And builders aren’t even going to go after the 46 percent of buyers who favor existing homes. Those people are lost. Rather, they’re going after the agnostics, the 35 percent who are on the fence, who don’t have a pre-conceived notion one way or the other of which is better, new or used.

****Builders are also going to target real estate brokers and agents because studies show realty pros control the leads. According to the research, 84 percent of all buyers – more than four out of five! – either plan to work with a realty pro or already are.

****For numerous reasons, builders and brokers have always had a love-hate relationship, and brokers have a built-in predisposition to show existing houses. But surveys show that a large percentage would like to be recommending or at least showing new homes but lack information about the houses and communities builders are erecting.

****So the mostly digital ad campaign to win the hearts and minds of buyers also is aimed at education realty agents. And one advantage that will be dangled in front of them is financing. That doesn’t mean participating builders have to have their own mortgage company, I was told. “They just need to have partners.” And that could be — or rather, should be — you.

****So go out and hug a builder or two, because the multi-million dollar, multi-year “Start Fresh, Buy New” campaign promises to be a dozy. It will emphasize the idea that owners of never before lived-in houses will enjoy the freedom of doing what they want, not what they have to do.

****In other words, it will stress “Everything Is New and Perfect” over taking down that so ‘50s wallpaper, repainting ugly walls and replacing worn carpeting. Or, as one ad exec put it a little more graphically, “People don’t want to sit on someone else’s toilet seat, or pick someone else’s toenails out of the carpet.”

****ABOUT THIS COLUMN: We are happy to welcome Lew to the PROGRESS in Lending team. He’s a veteran financial services reporter with vast industry knowledge. In this regular column he’ll reflect on the latest news and industry trends in his own voice, sharing his unique views, which is why the column is called: Lew’s Views.