You walk through a display home on a Saturday. It's beautiful. The sales consultant mentions that the upgrade package (stone benchtops, ducted air, upgraded facade) is free, but only if you sign a preliminary agreement today. Next weekend it ends. Oh, and there's only one lot left in the release at this price.
Your heart rate goes up. Your partner's eyes light up. Your rational brain hasn't been consulted yet.
That's emotional marketing, and new home sales are full of it. Good marketing works on emotion, and some marketers push it too far. Once you recognise the tactics, they lose most of their power. Here's what to watch for.
The emotions they work on
Fear and FOMO
Fear of missing out is the big one in new homes. Builders and developers create urgency and scarcity so you decide quickly:
- "This promotion ends Sunday."
- "Last lot at this price."
- "Prices go up on the 1st."
- "Another couple is looking at this one this afternoon."
Some of these may be true. The point is that they're designed to make you act before you've compared builders, read the contract or had anyone check it. Ask yourself: if this deal disappears, will I really be worse off? There is always another promotion, another builder and another lot.
Greed: the "free" upgrade
Everybody loves getting something for nothing. That's why so many new home promotions lead with free upgrades: "$40,000 of inclusions free".
Nothing is free. The cost of the upgrade package is built into the price somewhere. Ask what the home costs without the promotion, and whether you can take a lower price instead of the inclusions. Often you'll find the "free" items are things you'd have chosen anyway, or things you don't need at all. Compare the total price for the home you actually want, like for like, with other builders.
Pleasure: the display home
Display homes are built to make you fall in love. Furniture, styling, lighting, landscaping and upgraded finishes everywhere. Most of what you see isn't in the base price.
Walk through with the standard inclusions list in your hand. Ask the consultant to point out everything that isn't standard. The answer is usually most of it.
Upselling
Once you're committed, the upselling starts. The colour selection appointment is where budgets go to die. Each upgrade is "only" a few thousand dollars, and it all adds up. Each one is also a variation, priced by the builder with very little competition.
Set your selections budget before the appointment and stick to it. Decide what matters to you before someone else decides for you.
Pain and fear of loss
The flip side of pleasure is fear of loss: "Interest rates are going up, lock in now", or "Building costs are rising, this price won't last". Again, there may be some truth in it, but it's being used to rush you. A bad contract signed quickly is far more expensive than a few weeks spent checking it.
How to protect yourself
Recognise the pressure. Any time you feel rushed, that's a signal to slow down, not speed up.
Take the night. Never sign on the day. If the deal is only available today, it was designed to stop you thinking.
Ask the right questions. Our C4 Asking the Right Questions checklist is built for exactly these conversations with builders.
Read what you're signing. A "preliminary agreement" or "expression of interest" usually involves a deposit and terms. Know whether it's refundable and what you're committing to.
Use your cooling-off period. In Queensland, you have a 5 business day cooling-off period on a domestic building contract of $20,000 or more, starting the day after you receive a signed copy of the contract and the QBCC Consumer Building Guide. Use it to have the contract reviewed. If you pull out, the builder can only charge you $100 plus their reasonable out-of-pocket expenses.
Remember that "too good to be true" usually is. Builders don't give things away unless they profit from it.
Before you sign
- Compare. Get prices from at least three builders for the home you actually want, with matching specifications.
- Strip out the promotion. Ask for the price without the upgrade package and compare the real numbers.
- Get the contract checked. Have a construction lawyer or independent building consultant review the contract, plans and specification before you sign, or within the cooling-off period.
Building a home is one of the biggest purchases you'll ever make. It deserves more thought than a Saturday afternoon in a display village.
Further reading
Understanding Customer Awareness in Residential ConstructionNavigating the residential construction process for the first time? This guide breaks down the five crucial stages of customer awareness you’ll encounter. From problem recognition to post-purchase evaluation, arm yourself with the knowledge to make informed decisions.
Understanding TOF, MOF, BOF: How Project Builders MarketCurious about the influx of ads for new housing developments? This article explores the marketing tactics used by project builders, dissecting the ‘funnel’ method from awareness to purchase. Understand marketing strategies and make informed choices for your significant investment.
Project Builders: From Building Companies to MarketersExplore the evolution of project builders from traditional construction companies to marketing-focused entities, offering standardised building products.
