A growing number of prospective residential pool buyers are dropping out of project negotiations during the drafting stages as their search for financing comes up dry.
This behavioral trend is troublesome for many pool builders, in
large part because project costs often begin mounting long before
any actual digging takes place.
“A ton of money is wasted on drawings, plans, gasoline and so
on,” said Larry Duffy, president of Cameo Pools, a Pool
& Spa News Top Builder in Mesa, Ariz. “Our
salespeople might have to drive out to a customer’s house
twice, and rework their plans multiple times, before that person
finally admits to us that they can’t qualify for any
These customers — many of whom are financially stable overall
— are often stunned to learn how much their equity has
suffered as a result of decreased property values.
“People assume the current state of the housing market
doesn’t apply to them,” said Bob Hampe, owner of
Paradise Pools & Spas Inc. in Charleston, S.C. “They tell
us to go ahead and order the pool [shell] — but a few days
later, they call us back in shock, saying they don’t have
enough home equity to get financing.”
But there is a second, and perhaps less evident, aspect of the
problem. Not only is the current credit crunch preventing consumers
from acquiring loans, but many are also underestimating the cost of
a new pool, and ending negotiations when construction companies are
unable to meet their price expectation.
“I think a lot of them just don’t know what price to
expect,” said Barb Flack, owner of Aquatech Pools and Spas in
Morton, Ill. “They usually have a set price in mind —
often about 20 to 25 percent lower than our bid — and no
matter what, they’re just not willing to go above that.”
Other builders agree that recent customers approach the process
with a lack of real understanding about the costs involved, using
pool salespeople as their preliminary research sources. “In
all honesty, they probably don’t know what the process
entails,” Duffy said. “They think they should just come
to us to see what they can get.”
One positive turn, however, is that an increasing number of
financial institutions are recognizing the scale of the current
market for unsecured loans.
“We’re seeing a lot more customers starting projects
with unsecured loans right now,” Hampe said.
Others believe that once banks relax their lending standards to
more customary levels, many homeowners who are willing to shoulder
the cost of a new pool are likely to return with down payments in hand.
“I think if financing loosens up over the next couple of
years, a lot of these people will come back and buy pools,”
said Mike Gresham, service manager at Aquatech Pools and Spas in