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 financing.”

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 Morton, Ill.