How to Handle Risks Associated with New Construction Home Sales

Real estate developers are open to all sorts of risk within the multiple year span of a new project.  And nowhere is this more critical than in the sales centre. Some sales teams, both in-house or outsourced, still maintain decades-old sales practices that open them up to a wide array of inherent risk. A successful sales centre needs to have the correct systems and checks in place to ensure they are protected from costly risks.  Here are some of the more prominent risks that developers face when selling their new project.

Lack of compliance

With so much paperwork being processed and so many major transactions happening in a sales and presentation centre, the potential for clerical and administrative errors is very high. This could be due to several different factors like a high volume of buyers at launch or giving the option of upgrades and customization on purchased homes. Real estate developers can ensure compliance from the start of their sales program by remaining consistent with their documentation, their deal-related communications and their internal processes in the sales centre. It’s also very important for developers to log and store all deal information, touch points and payments as protection against potential audits. Selling internationally could open up a developer to added risk without proper procedures in place.

Manual Processes and Human Error

Every time someone from your team inputs or transfers information manually you’re put at risk of costly mistakes.  When working with a large range of information and several pieces of documentation, sales administrators can make the slightest mistake, like typing a word or number into the wrong field, rendering their work almost useless. There are also no safeguards in contemporary sales centres that can catch all human errors with absolutely certainty. Most still store and process their agreements and addenda on paper.  Manual processes severely affect visibility across an organization, as well. Reducing people involved by introducing automated processes can help a lot, less touch points means easier reporting and increased transparency. No matter how capable the sales and administrative teams are it is difficult to operate quickly, efficiently and without risk without integrated software.  An innocent human error could be immensely costly for a company’s finances and reputation

Automation can also save a lot of time in the deal process. Don’t lose precious days or weeks on a deal because a potential buyer has yet to come back into the sales centre to sign a contract. Digitizing your documents gives you the ability to automatically follow-up with your clients to sign contracts electronically. This shortens the deal timeline and encourages potential buyers to take action on your inventory.

“The release of a new project is a significant investment both financially and in time. Avesdo has helped us manage the risks associated with both, allowing us to see positive returns on both fronts.”

Dan Thompson Vice President of Marketing, Denna Homes


There are also risks that may not be quite as tangible, but have just as detrimental of impact on your sales centre. Something that affects many companies is the misalignment and disorganization of different areas of your business. An effective real estate sales team works in conjunction with the admin and finance staff, the marketing team and company leadership. Of course, the most effective way to solve misalignment is a centralized software system and document repository. Otherwise, your team will remain in information silos and won’t be referring to a single source of truth. Having a system that lets you find and access your deal information, regardless of where you are or when it was stored is crucial to avoiding such risks. With a complete audit trail of project data, you can easily search and find contracts or sales information they need, allowing you to make timely and effective decisions. Everyone referring to the same data means better collaboration between departments and better decision making as an organization.

In addition to internal accountability, management software can keep track of client deliverables and interactions. No more claims of people failing to receive contracts or information that was sent. Communication and deal logs not only allow you to track project activities, knowing who did what and when, but they also directly mitigate the risk of deals falling through or money being left on the table due to lost documents or missed deadlines.

Sales Risk

The inherent risks within the sales process itself resonates in every consumer-facing industry. Sales risk comes down to the uncertainty associated with your sales team and how they operate. Risk is also affected by the demand for your homes, sales performance, the stability of the market and, of course, pricing.  There is an enormous amount of pressure put upon sales teams due to the major costs of building a new construction project. They need to hit specific targets and often must do so on tight deadlines. In contemporary new construction sales, developer sales and marketing teams use various (sometimes costly) distribution channels to ensure they reach their sales targets. Not to mention, buying a home is a huge commitment for the average consumer and generally there’s not a lot a salesperson can do to maintain control of the sales process. 

Overall, there is a lot of uncertainty in new construction sales. Presentation centres can close or be forced to limit capacity. Frankly, multiple trips into the sales centre is already a lot to expect from buyers. Uncertainty in the buyer journey can be detrimental to builders that rely on revenue from a hot sales launch to fund current or future projects.  Developers need to make sure that they are swiftly closing as many deals as necessary and not risking the future of their project or the success of their team with outdated, unreliable processes.

Don’t be afraid of change

Avoiding or mitigating risk is an important part of managing new construction sales. By identifying, monitoring, and controlling risks, you can improve your sales team’s performance and help your company accomplish its objectives.

Want to learn more about how Avesdo Deal Management and OffPlan help developers and sales teams manage risk on every project? Click here to learn more from an Avesdo representative.

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