Homebuilders, Realtors finally playing from the same page | North Salem Realtor

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In my more than 30 years in the business, I have never been more hopeful for the future of real estate services and the housing industry than I am today.

My reasons are not tied to the improving housing market. They are tied to tension-breaking actions by homebuilders, and market studies showing homebuilders’ commitment to work with real estate agents.

A recent market study by Builder Homesite Inc. (BHI) concluded that “shoppers are reluctant to navigate the homebuying process on their own and intend to work with a Realtor. The vast majority (84 percent) intend to use a Realtor (when shopping for both new homes and resales), recognizing the many areas in which they provide assistance.”

BHI is a consortium of 32 of the largest production builders in America. The study surveyed 984 potential buyers or shoppers, most of whom expected to spend $150,000 to $500,000 for a resale or a new home.

To the question, “Why do you intend to use a Realtor?” respondents gave these reasons:

  • Help negotiate terms/price (70 percent).
  • Find home with your specifications (68 percent).
  • Coordinate viewings/appointments (66 percent).
  • Draft offers and contracts (65 percent).
  • Assistance navigating the purchase process (63 percent).
  • Knowledge of marketing conditions (63 percent).
  • Determine what comparable homes sell for (61 percent).
  • Buyer Information on available properties (61 percent).
  • Reference for inspectors, brokers, buyers, others (53 percent).
  • Knowledge about the neighborhood (51 percent).

A couple of observations. Although “Help negotiate price” is the reason most often given for using a Realtor, it is a misleading indicator if you relate it to purchases of new homes. Homebuilders, with few exceptions, do not negotiate price, especially in a rising market. If one buyer negotiates a better deal, that can destroy the pricing integrity of an entire community.

The desire to have a Realtor help draft offers and contracts also doesn’t apply to new-home purchases. One of the “easy” parts of a new-home sale is that the agent does not write the contract.

Nor do agents have to provide assistance navigating the purchase process for new homes, at least not in the way they would for a resale. Once the purchase agreement is effective, the builder takes control of every step of the process through closing, as he should.

The inclusion of these questions in the study helps all of us understand why, according to industry consultants, about 70 percent of all new homes sold are sold by co-brokers. What is hard to understand is why this number is not much higher.

I’ve yet to see a study or hear good reason why general agents are not trained or encouraged to at least show new homes, not sell them.

I have long advocated that a new-home model should be the first place a new agent visits, so he can have a positive inventory experience from the get-go. The agent sees a beautiful model, meets a helpful new-home professional, learns the registration process and the location story on that side of town, and learns about the competition, the contract process, closings and more.

What possibly could be better exposure and encouragement for new agents than this practice, and would it not make traditional training relative?

For the benefit of the old-timers reading this, yes, I, too, remember the emphasis on learning construction, the confusion about who would follow up, and all the rest. I also remember the typewriter.

This is a new age, for a new-type housing recovery — a recovery due in a big part to the Internet, a tool to which nobody participating in former recoveries had access to.

Good news now travels as fast as bad news, and can be highly targeted for little cost.

Obviously, homebuilders understand that co-broker marketing is a measurable, sales-generating marketing strategy. Homebuilders are accepting the fact that general agents make their living finding the right home, be it resale or new, for their prospects and clients.

Professional courtesies to the agent at the sales office plus commission consistency, not rapport and bonuses, stabilize trust.

On the other hand, agents are learning that a large number of their prospects will consider a new home, and may have already registered with a builder or two on the Internet or at a sales office.

To those who are trained to qualify for new homes as well as resales, this is not a problem. It is no different that working with local “for-sale-by-owners,” regarding who is responsible for the sale.

Some of us need to forget the past, and quit reminding whomever will listen about the old days — that time we took a prospect to a sales office, and the world almost ended because there was a real or imagined problem with the commission. This is a rare exception to the rule today.

Homebuilders not only need your ready, willing and qualified prospects, they need your good will. And in a tight inventory market, you need homebuilders.

But there is even a better reason to show new homes first — you will sell more resales, or should.

A new-home model represents the price point in your market, for resales as well as new. This is why you should take your prospects to a model center first, so they can visualize what they can get for their money.

Then, when you show your resales, the prospect has a way to evaluate the value and price of the resale compared to the new home’s fixed price. Whether she buys a resale or a new home, you win.

A new band is climbing on the wagon. The parade of homebuilders and real estate agents is finally playing from the same page. Don’t let this commission-driven parade pass you by.

David Fletcher, a licensed real estate broker and lifetime achiever, is founder of EMentoru, a company dedicated to helping real estate agents and homebuilders help each other make sales. Contact him by phone or text at 407-234-2349, or by email at davidf@ementoru.com.

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