Forget the mortgage, let’s talk about total cost of homeownership. It’s normal for buyers to get stuck comparing costs on a surface level — a $1,500 mortgage versus an $1,800 mortgage — but as new home sales professionals, we must be able to see past the sticker price and help our clients see past it, too.

Total cost of ownership includes aspects beyond a mortgage payment, such as maintenance and repair costs, overall utilities, taxes, homeowner’s insurance, and more. Seeing past the sticker price is crucial, whether you’re selling green features, discussing the cost of a new home versus a resale, or considering the true difference in cost between two homes. And whatever the scenario, you’ll need to be able to do the math and translate such costs into a language buyers understand.

Selling Green

Green products and architecture are widening the gap between utility costs in existing homes and newer, greener homes. Sales professionals can help consumers understand the benefits of green products by translating them into something buyers care about — like health, quality of life, and financial savings.

Beazer Homes does a great job demonstrating its highly sealed attic spaces by having a display in model homes. Behind a glass panel, thermometers show the temperature outside the home, inside the home, and in the attic. When buyers see that the attic space is barely different from the temperature inside the home, then the sales professional can tell them what it means to them — how lower heating and air conditioning bills translate into dollars saved.

Energy Star’s website says that homes that meet the Environmental Protection Agency’s guidelines for energy efficiency are 20-30 percent more efficient than standard homes. But rather than just quoting that 20-30 percent figure, get your calculator out and show buyers the monthly savings in dollars.

Existing Vs. New Homes

Energy efficiency is a great tool for demonstrating the benefits of new homes, but there are other key advantages new homes have over existing ones. That’s good news for builders because the National Association of Realtors reported in March that sales of foreclosures and existing homes are rising, but new home sales remain sluggish. The biggest competitor to homebuilders right now is not the builder across the street — it’s the existing home in the next neighborhood.

While a resale or foreclosure may be less expensive than a new home on the surface, there are several other aspects to consider. This is a prime opportunity to help prospects calculate maintenance costs, commuter costs, taxes, insurance rates, utilities, and more. Create a worksheet that makes it simple to add up and compare non-mortgage costs, giving buyers a more accurate idea of what they’ll be spending each month. This worksheet is especially helpful if your buyer is deciding between your home and another. Once you’ve used the available tools to demonstrate true costs, don’t let that information get lost in translation. Get out the calculator and show buyers why it matters to them and their pocketbooks.

When my wife and I were shopping for granite countertops, we needed to decide if the granite we really wanted was worth the extra cost. The standard countertop cost $44 per square foot, but the granite we wanted cost $144 per square foot. That meant nothing to me until I started asking questions. I found out that we’d need 80 square feet of granite, so I subtracted the included amount per square foot ($44) from the granite we wanted ($144) and multiplied the difference by 80 square feet. The difference was $8,000. A few simple calculations and we got a number we understood. We kept looking and chose something we really liked that cost an extra $1,500. The only problem was that I had to drive the process. I asked the questions and crunched the numbers, but our associate would have earned our trust and respect if she’d pulled out her calculator and walked us through it herself.

Don’t make customers figure it all out. Ask the right questions and do the math for them. Will they save money on taxes or maintenance costs? Will they cut their commute or be closer to entertainment and dining options? If so, figure the difference in dollars and say, “This new home will cut your commute in half, lower your taxes, and have energy efficient features. Overall, these benefits will cut your monthly costs by X dollars compared to the resale you’re considering.”

Here’s a link to a great tool for calculating the cost of each additional $1,000 in loan value. It allows you to enter loan information and find out the difference in mortgage payments between one price and another. With today’s interest rates, the rule of thumb is that an increase of $1,000 in overall price will be about $6 extra per month on the mortgage.

Don’t just inform prospective buyers with facts and figures; use that information to persuade and influence. Let’s say that after you consider total costs, your client will save $300 a month in utilities, taxes, and other benefits with your home. Don’t leave it at that nebulous $300 figure. Show them why that number matters. Would it buy them more of what they want? Using the $6 per $1,000 equation above, $300 a month gives them $50,000 more in spending power. That may translate to getting all the finishes they want, a home theater package, or a bigger lot. It could mean the difference between a sale and no sale.

Do your homework and use the tools included in this article. The more knowledgeable you are about your competition (other builders and existing homes alike), the more equipped you’ll be to help your buyers see things differently. You’ll be able to walk them through the process in a way that takes the mystery out of home financing and makes them feel comfortable with their purchase. You’ll earn their respect and appreciation and give them one of the most valuable things a homebuyer can have — confidence.

Jason Forrest is a professional sales trainer, coach and speaker specializing in new home sales. He is the author of Creating Urgency in a Non-Urgent Housing Market and 40 Day Sales Dare for New Home Sales. He can be reached at jason@shoreforrest.com and his website is www.jforrestgroup.com.