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7/11/2008 - New Hinton McGraw program helps buyers sell existing homes
Business First of Louisville - by Sarah Jeffords Pister Staff Writer To move inventory in a down real estate market, builders and developers are challenged to think creatively.
That has been the case for Hinton McGraw Builders Developers LLC, which is developing five patio-home projects that are located in Oldham County, Shelbyville and Frankfort.
So, the company came up with a package plan that ties selling homeowners' existing homes, at a reduced commission, with the purchase of a Hinton McGraw patio home, said company president Mark Hinton.
For months, Hinton said, he watched the same potential buyers visit and re-visit his company's model patio homes.
They appeared to be happy with the models and the patio-home communities.
But the drawback for prospective buyers was that they had to sell their existing homes before they could buy a Hinton McGraw property.
That scenario prompted company officials to create a new division, Hinton McGraw Realty, to help potential buyers sell their existing homes.
Five-step process
The real estate division offers a five-step program that starts with a market analysis of the existing home, which includes research on comparable sales in the neighborhood.
The homeowners get advice on steps such as painting rooms and updating landscapes to ready their home for sale.
The third step is to sign an agreement for Hinton McGraw Realty to list the home for sale, and the fourth step is to sign a contract to buy a Hinton McGraw patio home.
The contract is contingent on the homeowner's existing home selling within a specified time frame, typically 90 days.
Then, Hinton McGraw Realty markets the existing home in attempt to close the deal. A bonus for homeowners is that Hinton McGraw charges a commission of 5 percent on the sale of the existing home, which is less than the 6 percent commission many real estate agents charge.
As an added incentive, Hinton McGraw has contracted with Arrow Moving Co. to provide moving services.
Hinton said his company will pay up to $2,500 in moving expenses in instances in which the existing home sells prior to the new patio home being completed and belongings have to be moved to a temporary storage facility.
First home sold within two weeks
Realtor Leslie Shaw, who was hired to oversee the new division, said she has met with 24 homeowners since May. Of those, half have enlisted Hinton McGraw Realty to conduct a market analysis.
Five homeowners have listed their homes. One of the five homes sold for the full asking price of $242,950 within two weeks of being on the market, Shaw said. A second home came under contract last week, and the deal is scheduled to close within 30 days.
Shaw said she is pleased with the level of activity, and in particular, with the quick sales cycle for the first two contracts.
Hinton said he's pleasantly surprised by the response to the company's new realty division.
He said he expected it would take at least 120 days for the first sale because that is often how long homes are on the market these days.
So the turnaround has been positive, and it represents two homes that Hinton McGraw might not have sold otherwise.
"Anything that this program gives us is a bonus," Hinton said. "It's another tool that we use to help make us full-service builders/developers."
Another way to move inventory
There are other builders and developers in the local market who also own and operate real estate firms, so Hinton McGraw's shift in that direction is not a completely novel approach.
But it makes sense in a down market, said Joe Simms, co-owner of Re/Max Associates and past president of the Greater Louisville Association of Realtors.
With the contingency contract, he said, Hinton McGraw Realty has an extra motivation to market and sell the existing home, which can be a tough job these days.
Realtors are having to work harder to distinguish their properties from other inventory available. And, in some cases, they actually are charging higher commissions because of the additional work the job entails.
Don Kepple, president of ERA Kepple Keene Realtors, agreed. He said pricing is more important than ever, and some agents have begun to offer free home staging services to ensure the property is appealing to buyers and other agents.
Builders also are going the extra mile, he said, sometimes offering selling bonuses to agents. Other builder incentives include adding finished basements and other free upgrades, which would have been unheard of three or four years ago.
So Kepple is not surprised that Hinton McGraw would roll out such a program.
"It's another bonus or discount to get people to buy their new construction properties," he said.
Hinton McGraw Builders Developers LLC
Office location: 12925 U.S. 42 in Prospect
Partners: Bill Hinton; his son, Mark Hinton; and son-in-law Scott McGraw
Projects in Oldham County: Eagles Landing (units priced at $194,900 to $216,900) and Rivers Landing (units priced at $350,000 to $599,000)
Projects in Shelbyville: The Links at Fairway Crossing (units priced at $199,000) and Reserve at Twin Springs (units priced at $159,000 to $189,900)
Project in Frankfort: The Villas at Berry Hill (units priced from $239,900 to $289,900)
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