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TRANSCRIPT
U.S. Department of Housing and Urban Development
Marketing NSP Properties
March 15, 2011
Community Planning and Development
U.S. Department of Housing and Urban Development • Community Planning and Development 2
Moderators and Q and A Format• Moderators
– David Noguera, HUD
– John Laswick, HUD
– Hunter Kurtz, HUD
– Lawrence Williamson, ICF
– Courtney Smith, ICF
• How to ask questions
– Change status in Live Meeting from green to purple
– Press *1 to ask a question through Premiere Conference
• Provide Name and Organization
• If question already answered, press *2 to remove from queue
– Change status back to green after question answered
U.S. Department of Housing and Urban Development • Community Planning and Development 3
Agenda
• Webinar focus:
– Marketing, sales & leasing of NSP properties
• Participants will learn:
– Typical barriers to marketing
– Market Research-How data about market supply
& demand ties into effective marketing strategies
– Preparing the Marketing Plan
– Implementing the Marketing Plan
– Wrap-up & Questions
U.S. Department of Housing and Urban Development • Community Planning and Development 4
Barriers to Success
• NSP requirements are unfamiliar to buyers and may require
more time than open market sales
– Application, income eligibility, counseling, etc.
• Difficult to identify eligible homebuyers
– Those who want to buy and qualify for first mortgages
• Negative perceptions of target neighborhoods
• Challenges of buyers with a wide range of incomes
– NSP assistance needed, may vary in amounts and terms
• Challenges of structuring recapture/resale provisions
5U.S. Department of Housing and Urban Development • Community Planning and Development
Overcoming Barriers
• Design program and marketing plan so that clients have a
clear and smooth path to home purchases
• Increase demand through good market research, effective
marketing, and providing help in obtaining first mortgage
financing
• Use market research to identify “micro-areas” (in target area)
with stronger demand by owner-occupants (vs. investors)
– Overcome physical condition & crime perceptions
• Design financial assistance and provide disclosures so that
applicants clearly understand terms of NSP financing
6U.S. Department of Housing and Urban Development • Community Planning and Development
Market Research
• NSP acquisitions require supply-side research
– Inventory, vacancy rates, absorption, market rents and
sales prices, features, competitive advantages
• Understanding market demand (more difficult)
– Select target areas that are feasible for sales
– Set prices in line with the market
– Understand who is buying and what they want
– Consider: Demographics, purchasing power,
employment base, migration, commuting patterns
7U.S. Department of Housing and Urban Development • Community Planning and Development
Market Research (cont)
• Its best to use a professional for market analysis
• Market analysis answers to three basic questions:
– Is there a buyer for my units
– How quickly & at what price will the units be absorbed
– How might units be developed and marketed to be
more competitive
8U.S. Department of Housing and Urban Development • Community Planning and Development
Market Research (cont)
• Data Sources
– Recent home sales data
• Reveals prices, addresses, dates of sales & size
• Online sites like www.zillow.com or MLS
• Real Estate professional & recent buyers
– Preferences, message & program design
– Tax assessor data can indicate owner
occupancy
– For broader trends, use sources like Policy Map,
Claritas, and other proprietary databases
9U.S. Department of Housing and Urban Development • Community Planning and Development
Preparing the Marketing Plan
• Identify the target market
• Create a compelling message that describes your
competitive advantages, including Affirmative Marketing
Plan
• Determine when and how often to release the message
• Define the delivery mechanism (mode) for the
message
• Track the effectiveness of each mode
• Track the effectiveness of message
• Identify resources needed to implement the plan; staff,
budget etc.
10U.S. Department of Housing and Urban Development • Community Planning and Development
Preparing the Marketing Plan (cont)
• Compelling Messages – “Why buy this unit?”
– Quality of homes, neighborhood features, pricing,
subsidies, energy efficient, etc.
• Deliver message in a clear simple manner
• Message should be consistent in all modes and
translated into other languages if needed
• Deliver message frequently over the project period &
time the message with product availability
• Marketing modes – how best to get the message
across. See next slide for example/ideas
11U.S. Department of Housing and Urban Development • Community Planning and Development
Preparing the Marketing Plan (cont) Modes of Marketing
• Website & Links• Print Ad• Utility Bills
• Bus Signs • Events & Showings
• Realtors • P. S. Announcements• Press Releases (free) • Community News Paper• Talk Radio
• City News Paper• Social Networks (Facebook)• Billboards • Online-(www.owners.com)
• Grocery Stores • Multiply listing• Face to Face • Door Hanger/Flyers
– Employers• Direct Email– Broker breakfast
– Churches • Cross marketing
– Mall/Schools/Tradeshows • Referral Programs
• Yard signs • Use Fair Hsg info & Logo
• Signs w/ take-a-ways
12U.S. Department of Housing and Urban Development • Community Planning and Development
Preparing the Marketing Plan (cont)
• Other considerations in marketing properties
– Pre-qualifying Homebuyers for NSP & 1st Mortgage
• Who does this & are guidelines streamlined
• What happen to those that are not ready
– Sales Agreement, Disclosures & Terms
• Repayment, Resale/Recapture, NSP Commitment
Letter
– Housing Counseling & Income Certifications
• “Guide to NSP income Certification”
hudnsphelp.info
– Terms of NSP Financing: rates and repayment
13U.S. Department of Housing and Urban Development • Community Planning and Development
Preparing the Marketing Plan (cont)
• Marketing budget includes costs for:
– Marketing and design professionals
– Printing: flyers, brochures, door hangers, cards & signs
– Website setup and maintenance
– Paid advertising: radio, TV, magazines, billboards etc
– Re-branding video footage
– In house staff or sales agent (Commission: flat or
percentage)
– Average between 7-10% of homes sales (6% broker
4% campaign)
14U.S. Department of Housing and Urban Development • Community Planning and Development
Affirmative Marketing
• Use fair housing logo on all marketing materials and
in seller’s office
• http://www.hud.gov/library/bookshelf11/hudgraphics/fheologo.cfm
• Fair housing statement on marketing materials:
“It is the policy of the [insert name of agency] to provide services without regard
to race, color, religion, national origin, ancestry, age, sex, familial status, physical
handicap or disability.”
• Section 109 Compliant
http://www.hud.gov/offices/fheo/library/part109.pdf
• Plan must include outreach to those LEAST likely to apply
• Applies to NSP grantee that plan to redevelop 5+ units
15U.S. Department of Housing and Urban Development • Community Planning and Development
Affirmative Marketing (cont)
• Provide owners with guidance published by HUD
– Require activities appropriate to project
• Require owner to report marketing activities and save ALL applications
• Onsite, interview frontline staff to determine their awareness, consistency of approach, and attitude
• Watch for patterns
– interview rejected applicants and occupants
• If needed require Grantee review of all future applications and reporting on demographic mix for a specified time
16U.S. Department of Housing and Urban Development • Community Planning and Development
Implementing the Marketing Plan
• Engaging the Needed Personnel
– Professional marketing assistance
– Create messages; design Web pages and marketing pieces
(NSP eligible if specific to selling NSP homes)
• Home sales personnel
– Market the property, conduct open houses, show homes, pre-
qualify buyer for NSP and first mortgages, prepare for
closings, track leads
– Some NSP developers have this capability internally; others
hire real estate brokers
• Other Sources: SCORE, Work-Study, Temp., Consultants or
HUD-TA
17U.S. Department of Housing and Urban Development • Community Planning and Development
Implementing the Marketing Plan (cont)
Traditional Method
NSP1/NSP2
Developer - 1 R.E. Agent
R.E. AgentSub Recipient - 1
Centralized Method
CENTRALIZED Point of Contact
NSP-1
Developer -1
Sub R.-1
NSP-3
Developer 3
Sub R. -2
Developer 4
U.S. Department of Housing and Urban Development • Community Planning and Development18
Implementing the Marketing Plan (cont)
• Advantages to Centralized Marketing:
– Shared Human and Financial Resources
– Pre-screened buyer leads referrals & sharing
– Maximize property exposure
– Common Branding & Image
– Improved tracking
– Shared Marketing templates
– Equalizer for small & large developers
– Leads transfer from NSP1, 2 to 3…to developers
– TEAM=Together Everyone Achieves More!
19U.S. Department of Housing and Urban Development • Community Planning and Development
Implementing the Marketing Plan
(cont)• Tracking marketing and sales/rental data is crucial
– Can guide fine-tuning of plan to improve performance
– Key benchmark: number of homes sold or units rented
per month vs. original schedule – critical for meeting
NSP deadlines
– “Steps along the way” can show strengths and
weaknesses of current efforts and possible needs to
revise program:
• Monthly numbers of inquiries, showings, intakes,
applications, pre-qualifications, income certifications,
and sales contracts executed
20U.S. Department of Housing and Urban Development • Community Planning and Development
Implementing the Marketing Plan (cont)
• Marketing Example (Florida City’s 2010 figures)
– 537 TOTAL 100%
– 300 WORKSHOP 56%
– 78 APPLICATIONS 15%
– 27 ELIGIBLE 5%
– 12 HOMES SOLD 2%
• 1 homebuyer closed for every 45 contacts
• Marketing should generate several quality leads
• New climate requires new approaches
21U.S. Department of Housing and Urban Development • Community Planning and Development
Resources
• See the Homeownership Toolkit under “Resources” at
www.nsphelp.info – it includes:
– “Guide to Marketing and Selling NSP Homes”
– “Single Family Development and Sales Program
Manual”
• For HUD affirmative marketing procedures, see:
http://www.fhasecure.gov/offices/cpd/affordablehousing/trai
ning/web/crosscutting/equalaccess/marketing.cfm
• For sources of market data see Websites such as:
– www.zillow.com, www.mls.com, www.policymap.com
23U.S. Department of Housing and Urban Development • Community Planning and Development
Give Us Your Feedback!
• Answer a few short questions:
• http://www.surveymonkey.com/s/marketingproperties