An Overview of Marketing and Selling Affordable Homes

Introduction to Marketing and Sales

Marketing is not just about promotion. In fact, business schools teach the “Four Ps” of marketing: Product, Price, Promotion and Place1. All four components ideally are designed with the customer in mind and a solid understanding of the competition for that customer’s choice.

Think about a car. If an engineer designed it based purely on the idea of creating functional personal transportation with no research on customer preferences, he might produce a plain metal box on wheels, with no cup holders, paint choices, stereo systems, financing options or showrooms. He might promote it through a jargon-ridden ad about the engine, placed in the local newspaper. If there were no other options in personal transportation, his company might sell a few. Imagine, however, if he was required to sell those cars to real buyers in today’s marketplace, with hundreds of alternative choices designed with the customers’ needs and wants in mind.

Similarly, no amount of promotion can sell a house that lacks the amenities buyers can get elsewhere at a similar price, in a better neighborhood or with more accessible or affordable financing.

Marketing begins with understanding the marketplace and the customer, and continues with:

  • Making the PRODUCT match the customers’ wants better than the competition does, whether through original product design or refinement.
  • Setting a PRICE that customers believe to be a good value for your product, relative to other products and prices in the marketplace.
  • PROMOTING the product and its benefits to customers in places where they consume information, and in language that is meaningful to them.
  • Through a system – PLACE – that makes it as easy, enjoyable, convenient and timely as possible for them to buy the product.

You may think you have no control over most of these things. After all, funder guidelines are usually full of rules and regulations about where and how you can acquire properties for rehab, what amenities or features can be included in the rehab, how prices are to be set and who is (and is not) eligible to buy. And then there is the financing – the banks decide how that works, and what can you do if the lenders turn down the people who want to buy your homes?

Because they are conscious of all the components of marketing, effective developers plan well, adjust to obstacles quickly and usually do not find themselves holding for-sale properties for six, eight or even twelve months. It is never too late to bring a full marketing focus to your real estate program. As we proceed through the marketing and sales planning steps, you’ll see how to diagnose flaws in your current system and how you can refine it, even midcourse, to produce better results.

As you read this Guide, we invite you to consider not only how you can better promote your homes for sale, but also how you can refine the product itself (the house, the neighborhood and the financing) to better match what the customer wants, adjust the price where it could be helpful, and/or revamp the system a prospective customer must navigate to conclude a purchase.

Marketing vs. Sales

Throughout the Guide, your will find the phrase “marketing and sales” used frequently. Simply put, marketing is what goes into persuading potential buyers to call you, visit your website, come to your office or attend your open house or other event. Sales is what happens to that potential buyer once they make contact with you and your product – what you do to convert that potential buyer into a closed sale.

1 Place refers to the distribution system through which a product moves to get from where it is made to the point of sale. Although the homes you are selling do not move geographically, one could make the case that the process of acquiring them moves the buyer through a distribution system of homebuyer education, Realtors, lenders, etc.