Sie müssen Brand Viagra nur bei derviagra apothekeViagra Brand ist für jene Patienten nicht angezeigt, die eine andere Medizin gegen

Cialis is cheaper than brand pills, and you can always afford normal treatmentcialis onlineCialis online simply place your order, use your credit card to pay for your pillscialistaking erection pills to support your compromised erectile function (you will not have to take Cialis for the rest of your life.There is only one place to play from Online Casinos.casinoPlay Online Slots.Usually the recommended dose is 50 mg Viagra.ViagraViagra 100mg

‘No Haggle’ Pricing for 100K Houses?

by Chad Ludeman on July 23, 2008 · 4 comments

in Development,sales

As we get closer to building the first set of 100K Houses, we have been discussing the sales price a bit more. One of the subjects that has come up is the possibility of using a ‘No-Haggle’ policy for the first and every 100K House we build similar to what the GM brand, Saturn, instituted years ago.

Buying a house has always been similar to buying a car in that consumers rarely want to pay the full sticker price and usually haggle the seller down to a lower price. The sellers know this as well so they will often artificially inflate the advertised price of a home or car in order to hit whatever their “target price” might be. This is not always the case with homes as we saw a few years ago in some markets that saw steeply escalating home values and multiple offers over asking price. These situations are usually short lived as the market will quickly correct itself.

Getting back to our analogy, Saturn has experience great success with their no-haggle policy. Many consumers hated to haggle over the price of a new car and welcomed Saturn’s new strategy. In fact, Saturn posted the highest customer satisfaction statistics of all non-luxury brands. I have never purchased a Saturn before, but from what I can see the dealerships do a lot of things different to make their customers happy and confident in their decision. Things like taking pictures of the buyers with their new cars and welcoming them into the Saturn “family.”

Could this policy also work for the 100K House brand? One of the main essences of the brand is to make every effort to offer the best home for the best price to buyers that are stuck in between sub-par and high-end products with few decent options available. This includes everything from seeking out affordable land, to value engineering the design, to creating a business model that can survive on reasonable profit margins. It could make a lot of sense to put the same effort into determining a fair price for each home and sticking to a ‘no-haggle’ policy.

I am coming to realize that the ongoing strength of the business model may come from standardizing aspects of the home design, building process and sales process. The more efficient these things become, the more time we can spend on continually improving the design and seeking out more affordable land. This will then lead to more value being passed on to the buyers.

The flipside is that trying to institute a ‘no-haggle’ policy could fail and come back to bite us because everyone may still want to negotiate no matter how well we justify the price. Our margins could then suffer, which would possibly jeopardize the quality of our future developments.

If you enjoyed reading this post I can promise you'll love our new writing over at Postgreen Homes. Yeah, we know that's the same thing your favorite band said and their new album is nowhere near as good as their early stuff, but seriously, we are actually still getting better.

There also isn't much conversation to be had here . . . at least not with us. So come on over to the Postgreen Homes Blog and tell us what you think of our new(ish) digs and crazy ideas. We will be sure to tell you what we think of your opinion.

{ 4 comments… read them below or add one }

1 lavardera July 23, 2008 at 2:46 pm

I think this is the way to go. I have bought a car in both haggle and no haggle situation and preferred the latter. It simply removes a tremendous amount of stress. There is no wondering about whether you should have pressed for a lower number, whether or not you got as good a deal as that other guy. The seller has no cards to hold close to their chest and now everything can just be transparent. I found I could just sit back and enjoy buying the car and in the end I was much more satisfied.

2 tracy July 23, 2008 at 3:35 pm

I think no haggle could work for you. The success of a strategy like that depends on honesty and transparency and with all the detailed information available on this website, you should engender trust with a buyer. And you should also be attracting a certain type of consumer with the 100K house whose motivation is not only to put a roof over their heads but to do it with consciousness. You could still have someone who wants to haggle but as long as you’ve made your marketing on this point clear and you don’t make exceptions, it shouldn’t become a barrier unless that person wasn’t truly into the concept to begin with.

A risk is that a buyer who benefits from the no haggle pricing might then turn around and flip the house for more profit. Cars don’t have that same appreciation value. So you may want to think about no haggle for folks who will live in the house vs. those that might buy the property for investment.

Another thing to keep in mind is if Postgreen is going to do other projects beyond those with the 100K foundation, you need to make it very clear if all your projects are no haggle or only the 100K family. After all, you still need your financials to yield a profit, ultimately, so that you can sustain and grow your business and be able to do low profit gigs as much as possible. Like doing pro bono work because you can afford to. And haggling is about a cushion of profit that gets negotiated.

3 chad July 24, 2008 at 1:41 am

To clarify a bit, this is not really a question of profit but of process. When we or any developer sets out to build a house, they know how much they intend to sell it for and what the profit should be.

By going with a ‘no-haggle’ policy I am not suggesting that we will make less profit, I am simply saying that we would be going about the sales portion of real estate development in a non-traditional way. If we intend to sell something for ‘X’, we would list it at X, not 1.05X with the intention of negotiating our way to X.

This would be one more thing that sets the 100K brand and homes apart from traditional new construction. Basically we are saying that we pick what we feel is an affordable sales price for the neighborhood and then we bust our humps to find cheap enough land and design the greenest home possible for a construction budget that will still allow us to make our target profit margin.

Profit margin is a totally different conversation…

And to answer Tracy’s question, Yes, the ‘no-haggle’ policy would be specific to the 100K model as we may choose another method to sell other Postgreen projects that fall outside of this model.

4 tracy July 24, 2008 at 1:57 am

Right on, I get it. And it is a nice little differentiator to do the no haggle route. Just dependent on like-minded and respectful folks respecting that is all. With transparency and cool buyers, it would add another nice element to your 100K story for promotion and marketing.

Thanks for the clarification, Chad.

Leave a Comment

Previous post:

Next post: