A Winning Strategy For Established Markets
With the right approach, you can sell and build new homes in markets with no raw land.
If you think land costs are at a premium in your market, try building new homes in the five boroughs of New York—fughedaboutit! In the New York–metro market, raw land is scarcer than sunshine in Seattle.
That’s why builder Neal Mandel targets homeowners who love their neighborhoods, but hate their homes. Using full-page ads he places in local real estate magazines, Mandel offers dozens of home plans that fit the foundations of inner-city lots. Savvy buyers are opting for his panelized construction system rather than settling for remodeling their older homes.
“We run those ads 12 times a year, which gets us about 600 phone calls. This, in turn, gets us about 150 visits into our show room,” says Mandel, owner of Forest Homes of New York (West Islip, NY).
How It Works
 “In our presentations, we point out that when renovating an existing home, the homeowner will inevitably have to make compromises along the way. With older homes, when you start opening up walls, it’s like opening up Pandora’s Box—you never know what you might find. The home could be rotted out or a half-dozen other major problems. That’s a big unknown when it comes to the final price. Often, it’s less expensive in the long run to just tear the home down and build something custom that the owner truly wants.”
Rather than getting a buyer to make one large commitment to a project, Mandel has created a much softer sales approach. The emphasis is on smaller commitments, which he spells out in his agreement with the buyer. A few of the first steps and the associated costs offered by Mandel’s company include:
1. Site Visit ($150)
Assess site for new home placement and arrange for soil testing (lab results billed separately).
2. Zoning & Code Compliance ($150)
Review local codes and zoning to determine the possible maximum site development without requiring a variance.
3. Create Schematic Design ($500)
Modify a standard plan or create a new schematic floor plan and front elevation for a custom design (in accordance with municipal code and zoning) for the owners’ approval.
4. Review and Finalize Schematic Design ($150)
This is accomplished over two, one-hour meetings at their office.
5. Construction Documents (cost to be determined by project)
Mandel coordinates with an architect or engineer to sign and seal construction documents for the project—including foundation plans, demolition plans, floor plans, elevations, wall sections and other details.
Easier To Swallow
While new home construction is old hat to us pros, Mandel reminds us it’s often fraught with stress for the buyer. That’s why he designed his sales process to be a series of smaller steps leading to the completion of a new home.
“It’s not effective to try to sell all your services at once. Rather than overcoming their fears, we embrace them with a process that’s comfortable and clearly spelled out.”
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