What is the “Best” deal?

This question is one that every consumer wonders about and every salesperson has been asked. The answer to this question is something that I have wanted to address for many years. Obviously the easy answer is, the “Best” price is a price that the customer and seller agree on. That doesn’t always equate to the best price for the buyer involved in the transaction.

Over the years of retail experience I have discovered that “Perception” is the defining term when getting to the “Best” price. This example might help you understand just what I mean by that.

Several years back I was selling homes in a very nice community for a builder in the Houston area. Our homes were priced from the $190’s plus with standard amenities equal to most builders in that community. There were two other builders in the same community selling basically the same product at similar pricing. Even though outwardly the three builders seemed to be offering similar products, the fact is the end product was vastly different and I will discuss this a little later on in the article.

Two builders were offering a “Buyers Bonus” of $5,000.00 and the third builder was offering a $10,000.00 “Buyers Bonus”. Right out of the shoot there goes that term “Perception”. Obviously if there was a builder willing to offer 100% more in incentives, for sure that was the better deal, or was it?

I was driving by that community the other day and decided to enter the community to see what was going on. They are still developing that community and I noticed that the only builder left building in that community was the builder that I had worked for years earlier so I decided to stop in and visit with the salesperson.

Walking up to the model home I noticed the sign which stated “Homes starting from the $240’s” and immediately realized that they were still building the exact same floor plans that I had been selling in the community. Wow! I was shocked! A $50,000.00 increase in cost for the exact same product.

I entered and visited with the sales person for a while and then she said something to me that was equally shocking. She stated; “Sir if you purchase a home right now, We are offering a $45,000.00 buyers bonus, would that help you with your decision on building one of our quality homes?”

This is a great “Marketing Plan” for the builder. It is NOT designed to be the best deal for the customer and this is why.

  • Building the perception that someone is getting $45,000.00 in free upgrades for simply purchasing is an invitation to sell the customer more upgrades. For the most part, upgrades only serve to build profit margins.
  • If the customer decides to take the buyers bonus off the selling price and reduce the price of the home, then compared to the pricing several years ago, you’re still paying a similar price. Using the example above if the base price of the home is $240,000.00 and you get a $45,000.00 buyers bonus and do no further upgrades, you’re paying $195,000.00 for the home.
  • Offering “Too good to be true” buyers incentives only serves to confuse the customer. It shifts the concerns from quality to price and while price is important, it certainly isn’t the primary reason for purchasing a new home or anything else for that matter.

Now here’s the interesting thing about this example. Of the three builders, the builder that I was working for didn’t build the best home! They built a good home but the other two builders built a better home. Better controls, better constructions crews, better construction managers, better shingles, no pre-fab products, they wrapped the entire home in OSB (Oriented Strand Board) rather than Styrofoam sheeting just to mention a few. The final product was delivered to a higher standard and their customer service / warranty was much stronger than the builder that I once worked for.

So I guess that brings us full circle. What is the “Best” deal? Hopefully this article has helped demonstrate that buying the “Perception” rather than quality doesn’t necessarily equate to the “Best” deal.

Bayway Homes has been building homes in the Houston area going on 14 years. Most of our management, office personnel and construction crews have been with us from the start. Our after the sale and warranty service is unsurpassed and have a lot of very satisfied customers that can prove it.

Bayway Homes doesn’t build the “Perception” of a good deal, we build the reality of a quality home at a fair and reasonable price. We invite you to visit any of our communities in the Houston area. We would love to show why we are the better builder.