When is a sale a sale?

When is a new home sale a sale?

I mean, when can you put it in the sales column and leave it there? When can you definitively say you have a sale? When can you rest easy and not jump when the phone rings? When can you be totally confident that a sale you’ve made won’t come undone?

Let’s look at some possible answers:

▪ When you take a deposit – this signifies an intent by the buyers, but they can cancel or withdraw if the terms aren’t satisfactory.

▪ When you do the paperwork – this starts a binding relationship but it’s just a start and much remains to be done.

▪ When you have a non-refundable deposit, a completed sales agreement, and a commitment letter from the bank – this provides a reasonable amount of confidence and some money, but the sale could still cancel from unforeseen family or economic issues.

▪ When it’s a pre-sale and the customer gets funded for a “cp” (construction-to-permanent) loan and you begin construction – again the sale could still cancel from unforeseen family or economic issues or the customer could challenge a draw or refuse to accept the finished product.

▪ When you close title and the sale is totally funded – this seems safe – except for warranty issues.

▪ After the sale is funded, the customer moves in, and the first year of warranty responsibility has elapsed – this seems the safest so far.

▪ When the customer has lived in and enjoyed their new home – and become a valuable testimonial for you on the quality, value, and workmanship of what you deliver – here we go.

Depending on what you build, there may be more than one answer. They are structured in ascending order of confidence.

Just to play it safe, I like the last one.

* For more information about my consulting and coaching services visit my website stevehoffacker.com.