Marketplace Homes Expands in Weak Markets

By:John Caulfield

Its formula of offering lease payments for unsold existing homes translated into 543 sales last year for its preferred builder network.

And you thought your salespeople were good.

Joel Parrot, who for the past 18 months has been a “solutions manager” for Marketplace Homes, helped that company’s preferred builders sell 144 new houses in 2011. Parrot was one of at least four of Marketplace’s 22 solutions managers who each negotiated more than 60 purchase agreements with buyers last year.

The Plymouth, Mich.-based Marketplace helped sell 543 homes last year, a 165% increase over 2010. The carrot that Marketplace has been dangling since 2003 to win over prospects is its guarantee of monthly lease payments on their existing homes for up to six years if they purchase a new house from one of the builders in Marketplace’s network. In many cases, those existing homes get rented instead of resold.

Mike Kalis, Marketplace Homes’ managing partner, believes that Parrot’s sales total might have been the highest for any individual seller in the industry last year. “We haven’t found too many other people who sold more than 50 [houses],” he tells Builder.

Parrot, who worked for Pulte for four years, has a master’s degree in real estate development and management. He attributes his success at Marketplace to the company’s leasing strategy. “Nearly every client I deal with feels stuck: They can’t move into a new house because they can’t sell their old home. We unstick them.” He says the majority of new homes he helped sell last year were priced in the low $200s to low $300s.

Parrot says he also benefits from the fact that he’s not tied to selling in just one area. On any given day he’s dealing with between four and six buyers in his two primary markets: Chicago, where he works with 10 builders; and Denver, where he works with four. In the fourth quarter of 2011 alone, Marketplace helped K Hovnanian sell more than 25 homes in Chicagoland, says Kalis.

Marketplace currently works with nearly 40 builders in 36 markets in 18 states. These include nationals such as PulteGroup and Lennar; regional players such as Ashton Woods, Orleans, The Drees Cos., William Ryan Homes, and Taylor Morrison; and market-specific builders such as Lombardo Homes, ICI, Maronda, and Goodall Homes.

Kalis says he’s seeing encouraging signs of improving consumer confidence. But home values in most markets are still a long way from being anywhere close to full recovery. These conditions are why Kalis projects that Marketplace can increase the number of purchase agreements it negotiates to 1,500 homes in 2012. He also predicts that a good number of new-home buyers’ existing houses will be converted to rental properties, some of them permanently.

As for Parrot, he’s shooting for 200 sales this year.

John Caulfield is senior editor for Builder magazine.

URL to original article: http://www.builderonline.com/sales/marketplace-homes-expands-in-weak-markets.aspx?cid=BP:011312:FULL

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