Credit: Fred Forbes
The deal-closer was the price tag—which has been averaging around $325,000. Rather than shooting high and later resorting to gimmicks and discounts to move inventory, the developers realistically predicted where the market was likely to be six months from their kickoff date and downscaled their up-front pricing accordingly.
“We saw the world collapsing around us with people very nervous about their builders going under, and we needed to create an island of stability,” Mumford says. “This project has not been characterized by a litany of cascading prices, so our buyers feel their investment is secure.”
Well, almost. “We did have one model that we dropped the price on by about $15,000 early on,” he concedes. “At the time, we had three buyers of that model who had already signed contracts, so we had our sales manager call and tell them we were making an adjustment to their contract price on good faith, even though we were not contractually obligated to do so. We were afraid people might be spooked by that, but it actually had the opposite effect and spurred a wave of referrals. I guess people saw it as a very forthright way to run a business, and they appreciated that.”
In fact, eight of the units sold thus far are the result of referrals. In one case, a single sale led to a chain of three subsequent word-of-mouth referrals, according to sales manager Karol Johnson, who continues to see model traffic of 40 to 50 people per week. “On Super Bowl Sunday, I sold three houses before kickoff, which was nuts,” she says.
And did those fictional buyer profiles hit their mark? Bullseye. Only 15 percent of sales to date have been to couples in their 40s and 50s, whereas the remainder have sold to young professional singles or couples. In fact, the Chelsea model was snapped up, fully furnished, by a single woman in her 30s who works in New York City, Johnson says. “She loved the house and bought everything just as it was."
Community: River Place at Butler
Total acreage: 7.75
Date opened for sale: Sept. 15, 2007
Product: Two-bedroom townhomes from 1,442 square feet to 2,036 square feet
Price range: $310,000 to $425,000
Total number of units at build-out: 68
Sales to date: 64
Builder: Heartstone Development, East Hanover, N.J., and Roger Mumford, Colts Neck, N.J.
Architect: Thomas J. Brennan Architects, Plano, Texas
Interior designer: Mary Cook & Associates, Chicago