Builders; Is auction for them?

• Builders...What makes them tick?
• What is the builder strategy when it slows?
• What appeals to the builder?

Builders...What makes them tick?

1. They have to build to survive 2. Construction loans for small builders means making payroll 3. Publicly held builders must keep construction activity rolling to answer to the stockholders 4. Large/national builders consider ALL standing inventory to be a company "asset" 5. Small builders will fall fast when the market gets sluggish

Incentive#1

FREE options such as FREE 9' ceilings, FREE sunroom, FREE granite

Why? Because dollar for dollar the least painful way to interest buyers. For example, if a builder "gives away' $50,000 in upgrades his actual costs range between $25,000-$35,000.

Incentive #2

Closing $ assistance. Currently we are seeing between $ 5,000 -$15,000 in closing cost help being offered.

Why? Because most builders have already dictated (within the contract) the use of the builder's title company. Therefore, the closing cost expenses are shared by the builder AND the title company. This isn't as much of a builder hit it appears.

Incentive # 3

Agents Bonus- we have seen everything from $5000 to $50,000 agent's bonus throughout the last quarter. Although extra money is very nice, agents cannot magically produce buyers JUST because there is a bonus attached to the sale. (Often the agent will "share" the bonus with their buyer)

1. The time value of money
2. All sold on one day
3. History is 100% sell out
4. Non0contingent buyers
5. Leverage with their lender
6. Scale down options post auction are greater profit
7. Average options post auction are greater

The Deal Structure

1. We are prepared to "take over" the site
2. Builder pays site agent
3. Open 3-5 days a week
4. Pre sell all that you can
5. Offer 6% buyers premium
6. Track the leads for other subdivisions

Bank Auction Realty - The Deal Structure

We are prepared to "take over" the site Builder pays site agent Open 3-5 days a week Pre sell all that you can Offer 6% buyers premium Track the leads for other subdivisions