SHIFT HAPPENS The Great Paradigm Shift In Residential Real Estate Is Here Presented by the RE: Expert Consortium 10.09.08

What worked before – will not work again. Today’s buyers demand an elevated, customer-centric experience that demands you SHIFT your thinking and your actions… or face the consequences. Yesterday’s Buyers Today’s Buyers

RE: Expert Consortium Founding Members Metrostudy Wayde Jester, Director of Consulting Lance Jackson & Associates Lance Jackson, Strategic Director Trio Interior Design Angela Harris, Principal The InterPro Group Z. James Czupor, Principal Jennifer Gore Unlimited Jennifer Gore, Principal

Metrostudy Wayde Jester, Director of Consulting

Lance Jackson & Associates Lance Jackson, Strategic Director

Trio Interior Design Angela Harris, Principal

The InterPro Group Z. James Czupor, Principal

Jennifer Gore Unlimited Jennifer Gore, Principal

WAYDE JESTER Director of Consulting Metrostudy Safely Getting to the Other Side

Safely Getting To The Other Side THE PAST Size of Denver Market was 20,000 Homes Mortgages Were Easily Obtained Consumers Looked at Homes Like a Blue Chip Investment TODAY Size of Denver Market is 7,000 Homes Credit Markets Have Chilled Consumers Have Lost Equity in Their Home

THE PAST

Size of Denver Market was 20,000 Homes

Mortgages Were Easily Obtained

Consumers Looked at Homes Like a Blue Chip Investment

TODAY

Size of Denver Market is 7,000 Homes

Credit Markets Have Chilled

Consumers Have Lost Equity in Their Home

Bank on This… Most of your competition will continue to do business the same way, refusing to adapt to a new market environment Distressing times always produce winners; they are the ones who have paid attention to the market shift and adjusted their strategies Consumers are fence sitting right now, but when they return to shopping for a house they will respond to good value – “flight to quality” Big Builders have the advantage of in-house financing, but when the market picks up they are not prepared to ramp up production having lost key personnel

Most of your competition will continue to do business the same way, refusing to adapt to a new market environment Distressing times always produce winners; they are the ones who have paid attention to the market shift and adjusted their strategies Consumers are fence sitting right now, but when they return to shopping for a house they will respond to good value – “flight to quality” Big Builders have the advantage of in-house financing, but when the market picks up they are not prepared to ramp up production having lost key personnel

And This… Colorado is the 5 th best job producing State in the Country, many thanks to the energy business, but also because we have a diversified economy with tech, bio tech, tourism and manufacturing. Absent a price bubble, home values locally have less downside risk. Year over year Denver SF prices are down 14% compared with 20 and 30 percent in AZ, NV and CA. Metrostudy expects demand to pick up by Summer 2009, gradually for sure, but some of the fences sitters will jump back in. While it may be a decade before we reach the level of homebuilding activity we achieved in 2005, Denver and the State of Colorado have very good long term prospects.

Colorado is the 5 th best job producing State in the Country, many thanks to the energy business, but also because we have a diversified economy with tech, bio tech, tourism and manufacturing. Absent a price bubble, home values locally have less downside risk. Year over year Denver SF prices are down 14% compared with 20 and 30 percent in AZ, NV and CA. Metrostudy expects demand to pick up by Summer 2009, gradually for sure, but some of the fences sitters will jump back in. While it may be a decade before we reach the level of homebuilding activity we achieved in 2005, Denver and the State of Colorado have very good long term prospects.

Important Questions: Are we a unique builder defining our own niche? – Buyer profile, depth of market Are we a common builder looking for a fair share of the market? – Number of competitors, current supply and demand Do you need help answering these questions?

Are we a unique builder defining our own niche? – Buyer profile, depth of market Are we a common builder looking for a fair share of the market? – Number of competitors, current supply and demand Do you need help answering these questions?

LANCE JACKSON Strategic Director Lance Jackson & Associates The Shift in Defining and Communicating Who You Are

The Shift in Defining Who You Are THE PAST You stated with pride the number of years you have been a quality builder, or the number of years you’ve been building homes (number of years or homes has little interest to anyone except yourself) TODAY You must declare your credentials and unique ability to deliver your brand’s promise – every time (think about proprietary methods, protocols, etc.) The DEPTH your brand has to offer

THE PAST

You stated with pride the number of years you have been a quality builder, or the number of years you’ve been building homes (number of years or homes has little interest to anyone except yourself)

TODAY

You must declare your credentials and unique ability to deliver your brand’s promise – every time (think about proprietary methods, protocols, etc.)

The DEPTH your brand has to offer

The Shift in Defining Who You Are THE PAST Your builder story is based upon your history as a builder or developer… and that will be enough to differentiate you (yet, in your market’s mind, they all read the same) TODAY Your brand must embrace your personal vision for your enterprise, and your customers ( if you do, your brand will be unique) The DESIRE that drives your brand

THE PAST

Your builder story is based upon your history as a builder or developer… and that will be enough to differentiate you (yet, in your market’s mind, they all read the same)

TODAY

Your brand must embrace your personal vision for your enterprise, and your customers ( if you do, your brand will be unique)

The DESIRE that drives your brand

The Shift in Defining Who You Are THE PAST Your builder story was a well-crafted paragraph about “attention to detail,” “craftsmanship” and “design” (overused/common and undistinguishable) TODAY You must declare with clarity and brevity the market want you are fulfilling (Unique Selling Proposition – USP) The DEMAND your brand is fulfilling

THE PAST

Your builder story was a well-crafted paragraph about “attention to detail,” “craftsmanship” and “design” (overused/common and undistinguishable)

TODAY

You must declare with clarity and brevity the market want you are fulfilling (Unique Selling Proposition – USP)

The DEMAND your brand is fulfilling

Your Brand’s Unique Selling Proposition

Home Buyer Internet Usage 84% of active home buyers use the internet in their search for a new home. Source: 2007 NAR Profile of Home Buyers and Sellers

84% of active home buyers use the internet in their search for a new home.

Source: 2007 NAR Profile of Home Buyers and Sellers

The Shift in Communicating Who You Are THE PAST Your web site is static – a “brochure-ware” site TODAY Your web site must be dynamic

THE PAST

Your web site is static – a “brochure-ware” site

TODAY

Your web site must be dynamic

The Shift in Communicating Who You Are THE PAST You publish information regarding new locations or home designs TODAY Your web site must be interactive – think of it as a conversation venue

THE PAST

You publish information regarding new locations or home designs

TODAY

Your web site must be interactive – think of it as a conversation venue

The Shift in Communicating Who You Are THE PAST You use your web site to inform those who happen to visit it TODAY Once your web site is engaging and dynamic – promote it at every opportunity

THE PAST

You use your web site to inform those who happen to visit it

TODAY

Once your web site is engaging and dynamic – promote it at every opportunity

The Shift in Communicating Who You Are THE PAST You control the dialogue – one set of messages to everyone TODAY Use your web site to collaborate with your prospect, your buyers and your home owners

THE PAST

You control the dialogue – one set of messages to everyone

TODAY

Use your web site to collaborate with your prospect, your buyers and your home owners

ANGELA HARRIS Principal Trio Interior Design The Shift in Designing Desirable Product

The Shift in Designing Desirable Product THE PAST Build it and they will come is a method of design. Great location is all you need. TODAY The customer is much more educated on sustainable design, exterior materials, floor plan layout, functionality of spaces, finish level, technology, and will ultimately demand what type of product is marketable and should be built.

THE PAST

Build it and they will come is a method of design. Great location is all you need.

TODAY

The customer is much more educated on sustainable design, exterior materials, floor plan layout, functionality of spaces, finish level, technology, and will ultimately demand what type of product is marketable and should be built.

The Shift in Designing Desirable Product THE PAST The highest level of finish is desirable. TODAY The customer wants to see efficiency, consistency, and the appropriate finish level for their personal lifestyle. What are the buying patterns of your audience? Does the overall finish package make sense to them?

THE PAST

The highest level of finish is desirable.

TODAY

The customer wants to see efficiency, consistency, and the appropriate finish level for their personal lifestyle. What are the buying patterns of your audience? Does the overall finish package make sense to them?

The Shift in Designing Desirable Product THE PAST Space design is sacrificed for high end appliances and a high level of finish. TODAY Livability and functionality of spaces are vital to the success of a project. Taking the time to analyze room sizes, door swings, number of spaces, storage space, and the use of spaces, along with your finish package is a critical path to a successful project.

THE PAST

Space design is sacrificed for high end appliances and a high level of finish.

TODAY

Livability and functionality of spaces are vital to the success of a project. Taking the time to analyze room sizes, door swings, number of spaces, storage space, and the use of spaces, along with your finish package is a critical path to a successful project.

The Shift in Designing Desirable Product THE PAST We were successful with this floor plan, exterior elevation, and overall product in the past. We should stick with what works. TODAY Value added design elements such as extended outdoor living areas, differentiating exterior elements, and technology packages set you apart from your competitor. What are your value added design attributes and do they speak to the location and audience of your project?

THE PAST

We were successful with this floor plan, exterior elevation, and overall product in the past. We should stick with what works.

TODAY

Value added design elements such as extended outdoor living areas, differentiating exterior elements, and technology packages set you apart from your competitor. What are your value added design attributes and do they speak to the location and audience of your project?

Exterior Elevation – Customize Your Home

Livable Spaces – Speak To Your Targeted Customer

Finish Level – Speak To Your Targeted Customer

Outdoor Living – Value Added Attributes

The Shift in Communicating Your Design THE PAST A full set model home is the only avenue of showcasing your home and speaking to your targeted audience. TODAY The usage of space and scale is important for buyers to understand. If a model home is not affordable, builders are looking to alternate solutions such as staging. Showcasing your home in the appropriate capacity is important.

THE PAST

A full set model home is the only avenue of showcasing your home and speaking to your targeted audience.

TODAY

The usage of space and scale is important for buyers to understand. If a model home is not affordable, builders are looking to alternate solutions such as staging. Showcasing your home in the appropriate capacity is important.

The Shift in Communicating Your Design THE PAST Live sales centers with conceptual boards and model vignettes is the only way to communicating the finish level and design of the product. TODAY Interior renderings and animated virtual models are a great tool for pre-sale opportunity. Creating the “experience” for the buyer is an important step to reaching and communicating the value of your projects.

THE PAST

Live sales centers with conceptual boards and model vignettes is the only way to communicating the finish level and design of the product.

TODAY

Interior renderings and animated virtual models are a great tool for pre-sale opportunity. Creating the “experience” for the buyer is an important step to reaching and communicating the value of your projects.

Staging a Model

Virtual Renderings

Virtual Experiences

Virtual or Animated Rendering

Z. JAMES CZUPOR Principal The InterPro Group The Shift in How to Promote Your Business

The Shift in How to Promote Your Business THE PAST Newspaper ads Billboards Bus Boards Direct Mail Television Public Relations On Site Signage Special Events Radio TODAY Most Efficient and Cost Effective Websites Targeted Direct Mail Targeted Email Campaigns Public Relations On Site Signage Blogs/New Media

THE PAST

Newspaper ads

Billboards

Bus Boards

Direct Mail

Television

Public Relations

On Site Signage

Special Events

Radio

TODAY

Most Efficient and Cost Effective

Websites

Targeted Direct Mail

Targeted Email Campaigns

Public Relations

On Site Signage

Blogs/New Media

The Shift in How to Promote Your Business THE PAST Newspaper ads Billboards Bus Boards Direct Mail Television Public Relations Special Events On Site Signage Radio TODAY Nice if you can afford it – wasted message reach Newspaper ads Billboards Bus Boards Radio Television

THE PAST

Newspaper ads

Billboards

Bus Boards

Direct Mail

Television

Public Relations

Special Events

On Site Signage

Radio

TODAY

Nice if you can afford it – wasted message reach

Newspaper ads

Billboards

Bus Boards

Radio

Television

Six Forces Impacting How You Promote Today 1. Newspapers 2. Television 3. Internet 4. Aging Population 5. Emerging Population 6. Noise from Issues – Financial Crisis/Bailout – Housing Downturn News – High Oil/Gas Prices – Auto Industry Bailout – Natural Disasters – 2008 Presidential Election

1. Newspapers

2. Television

3. Internet

4. Aging Population

5. Emerging Population

6. Noise from Issues

– Financial Crisis/Bailout

– Housing Downturn News

– High Oil/Gas Prices

– Auto Industry Bailout

– Natural Disasters

– 2008 Presidential Election

12 Strategies You Can Use Today THE NEW MARKETING MODEL 1. Your buyers are GOLD 2. Targeted Email, Targeted Direct Marketing – Multiple “touches” 3. Newspaper, TV, Radio 4. “YOU” Websites 5. Special Events 6. Sponsorships

THE NEW MARKETING MODEL

1. Your buyers are GOLD

2. Targeted Email, Targeted Direct Marketing – Multiple “touches”

3. Newspaper, TV, Radio

4. “YOU” Websites

5. Special Events

6. Sponsorships

12 Strategies You Can Use Today THE NEW MARKETING MODEL 7. Sustained PR 8. Coordinate BRANDING, RESEARCH, PR, SALES & MARKETING, INTERIOR DESIGN experiences 9. Know your customer and speak your customer’s language 10. Key Messages 11. Be an Educator/Advocate 12. You are in the business of marketing

THE NEW MARKETING MODEL

7. Sustained PR

8. Coordinate BRANDING, RESEARCH, PR, SALES & MARKETING, INTERIOR DESIGN experiences

9. Know your customer and speak your customer’s language

10. Key Messages

11. Be an Educator/Advocate

12. You are in the business of marketing

JENNIFER GORE Principal Jennifer Gore Unlimited The Shift in Your Marketing and Your Sales Teams

The Shift in Your Marketing & Sales Teams Housing Market Conditions THE PAST HOT market Build it and they came Too much traffic Quality control Easy money Buyers had home equity Increasing prices TODAY Excessive Inventory Build it and you wait Too little traffic Preserving capital Tough financing Buyers cannot sell current home Discounts

THE PAST

HOT market

Build it and they came

Too much traffic

Quality control

Easy money

Buyers had home equity

Increasing prices

TODAY

Excessive Inventory

Build it and you wait

Too little traffic

Preserving capital

Tough financing

Buyers cannot sell current home

Discounts

The Shift in Your Marketing & Sales Teams Marketing THE PAST No research Signs Newspaper/magazine ads Website Small percentage of co-op Homeowner parties TODAY Never enough research – about buyers! More signs Testimonials and minimal print advertising Dynamic e-marketing Courting brokers Public relations and event marketing

THE PAST

No research

Signs

Newspaper/magazine ads

Website

Small percentage of co-op

Homeowner parties

TODAY

Never enough research – about buyers!

More signs

Testimonials and minimal print advertising

Dynamic e-marketing

Courting brokers

Public relations and event marketing

The Shift in Your Marketing & Sales Teams Sales THE PAST Enthusiasm Back-slapping the competition No research Greeting prospects Taking orders Stated income sufficed TODAY Perseverance Wanting to slap the competition Field research Cultivating buyers Artful negotiation Proving buyer’s ability to buy

THE PAST

Enthusiasm

Back-slapping the competition

No research

Greeting prospects

Taking orders

Stated income sufficed

TODAY

Perseverance

Wanting to slap the competition

Field research

Cultivating buyers

Artful negotiation

Proving buyer’s ability to buy

The Shift in Your Marketing & Sales Teams Sales THE PAST No contingent contracts Minimal broker relations Keeping up with paperwork Customer service TODAY Assisting buyer to sell current home Necessity for co-op relations Following up Customer counseling

THE PAST

No contingent contracts

Minimal broker relations

Keeping up with paperwork

Customer service

TODAY

Assisting buyer to sell current home

Necessity for co-op relations

Following up

Customer counseling

SHIFT HAPPENS Shift while you can before the bad news turns to good. www.REExpertConsortium.com