A Letter To General Real Estate Agents About Showing New Homes
Dear Real Estate Agent:
Let’s talk broker-to-broker about what you are doing to build your business. If you are not prospecting and qualifying for ‘new’construction, you are missing at least four revenue streams and I can prove it.
Start prospecting for new homes prospects and you will start getting more listings, selling more resales, and put commissions from new homes sales in your pocket you would have missed. It happens every day. I have talked with agents who are doing it successfully.
Many of your resale prospects are buying new homes, and you may not even know it. Others like what you showed them, but want to look at new homes over the weekend ‘just for comparison’ and you lose the sale to a new home. There is no excuse to ever lose a prospect to a new homes purchase. Never.
They are shopping new homes on the Internet, big time, and many are registering or setting appointments with new homes builders before they ever meet you. In the old days we didn’t have to worry about that, but it is a critically important opportunity for you, if you know what to do when it happens. Homebuilder registration on the Internet does not mean you will not be paid. But you need to know the process.
Until now, there has been little or no ‘new homes’ training in most real estate offices, be they national franchises or local boutiques. There was enough business to go around in the past, but that is no longer true, and the demand for housing is forecasted to stay weak for the foreseeable future. You need to make doubly sure that your inventory offering is complete, and it cannot possibly be complete if you are not qualifying for new homes.
The ‘new homes’ stats don’t change much in their relationship to resales. About one our of ten homes sold in your market will be a ‘new’ home. Some of these will be bought by prospects who would not think of anything else but a new home, yet you will never meet this prospect because you are not prospecting for him.
Before we get into this much deeper, let me say that you may not be the one who sells the home, but you could be the reason they buy it, whether it be resale or new. So let’s be clear. This is not about how to sell new homes. It is about how to find and qualify new homes buyers so you can grow your resale and listing business and add ‘new homes’ prospects and the homes they need to list, to your prospecting activities.
To its credit the National Home Builder’s Association has tried for years to encourage and train general real estate agents to sell new homes. Realtors, through their local associations formed builder/realtor committees in an effort to better understand the new homes industry, but to my knowledge, there has never been a cobroker training program that focused on helping the general agent grow their resale and listing business by focusing on ‘new homes.’
That is precisely what the Builder-Certified New Homes Cobroker training system is designed to do.
Home builders attempting to teach general real estate agents to sell new homes is like a cat trying to teach an old dog a new trick. There is an embedded push-pull effect that cannot be dismissed. On the other hand, the general real estate industry has always built its training around the importance of developing a listing base, and I agree 100% with that. Listings are the name of the game, unless you are a full time buyer’s broker. In that case, saleable inventory is the name of the game.
But in today’s buyer’s market, have you ever seen so many unsaleable listings in your life?
In addition, I don’t know that we will ever see such a sustained time when the ‘new home’ is priced so right, the value on a square foot basis so high, the home builders so motivated to sell, and the mortgage costs so low. It is a perfect storm of opportunity for both new homes buyers and new homes real estate agents.
This is one reason that the percentage of cobroker sales for new homes are so high, running 70 percent of all sales and higher in many subdivisions, with a good percentage paying cash. This data is easy to verify in your market. Call a new homes sales office. They will tell you.
Because the general real estate industry has not initiated a ‘new homes ‘ training program, home builders have provided the training, by default. Subject matter has been understandably skewed to favor the homebuilder because Realtors never quite know how to help builders understand that they are first and foremost in the resale and listing business.
What do I mean by ‘skewed’?
The training issue has always centered around “How To Sell New Homes” instead of “How To Include A New Home In Your Showing Schedule” and the benefits of doing so for both parties. Home builders push the sale of their product, and general agents push back, because they are rightly trained to sell whatever the prospect wants to purchase, be it new or resale.
Here is my simple contention, based on too many years as a new homes niche broker in a general agents world:
Home builders are not equipped to teach new homes cobrokering to general agents any more than general agents are prepared to teach the preconstruction process to on-site agents.
For example, general agents are trained to show homes. New agents are trained to sell them. General agents are trained to encourage offers. New homes agents are trained to be proud of ‘price’. General agents capture their on prospects and prequalify them before they show them inventory. On-site agents show a few models to everyone who walks in the office. You get the idea. The differences are HUGE.
General agents know almost nothing about the construction history of a home. New homes agents know every detail.
But the most important of all the difference is the fact that the general agent must show both new and resales in most cases and can close faster if they do, because the new homes visit takes the ‘I want to shop new homes before I make a decision’ objection away from the prospect.
The bottom line is this: “New homes’ are the most saleable FSBO”s in town. General agents need to be showing them, because they will get more resales, more listings and make a new homes sale they would have lost and never known why.
On the other hand, home builders need to understand that in today’s market the broker who is willing to bring their prospect to your sales office with a ready, willing and able prospect in tow, is absolute gold. It is up the the new homes agent to slow the broker down, which could easily be done at the site table , win the brokers trust, let the broker control the prospect, and take the communications initiative . The broker has a lot more inventory show more qualified buyers.
If you look at what new homes agents tell the real estate industry what they need to do to sell new homes, it is no wonder so many agents stay away. Here are a few of them. All of them with an embedded ‘repelling’ effect on the broker.
“They need to learn construction.’ “They need to know the market.”, “They are always rushing through the models.” “They should let us show the models without them. The can ruin the sale.” I don’t agree with any of these statements.
Seriously, what do I need to know about construction or the market to take a prospect to a builder’s sales office? Knowing these things can’t hurt, but if the construction industry had any sense of the required education at the state, local, and office level required, they would never in million years suggest to a real estate agent that they had to learn construction to be a good new homes cobroker. Think about it.
But it is not their fault. There has been no training or even encouragement within real estate offices for their agents to show new homes. Yet, look around your office at your highest producers. There is a good chance they are actively showing new construction.
The opportunity to make a good living in real estate is available for those who want to get serious about their career, and are willing to consider building a new homes niche, not just to sell more new homes, but to build your resale and listing business while doing so. Others are already doing exactly that.
The fact that our Builder-Certified New Homes Cobroker training is provided by a real estate cobroker with 30 years experience and $3 billion in sales presents the perfect storm opportunity to begin this journey now. Online one-hour classes are on-going. You will be tested. We are serious about helping those who are serious about seeking it. We hope you join us.
As always, your comments are welcome and the opportunity to prove me wrong invited.
David Fletcher, Lic Real Estate Broker
407.352.5500
David’s Apology Tour
Dear homebuilders and general real estate agents,
As we say around our house, “There seems to be some confusion around here.”
Today more than ever, home builders and real estate agents need to work together And after at least 30 years, they still do not know how. The proof is in the facts. General agents tend to shy away from selling new homes. Onsite agents don’t particular respect general real estate agents, although they welcome their prospect to their sales offices.
The reason: The little training they have had, has not, is not and is not going to work, unless it gets more about trying to understand the other’s responsibilities, limitations, and motivations.
As you seem to be rapidly discovering, I have developed and am offering a six-hour training system for general agents and home builders that helps general agents earn a Builder-Certified New Homes Broker designation. It is not official, but it is the best qualifying marketing tool, agents will ever see, whether it be for resale, new homes or making a listing presentation.
I clearly get that what I am doing is counter to establishment thinking. It is not politically correct, and some may find what I am doing threatening, which I don’t mean to be, but I must be honest.
What have I done?
I have written a six-hour, online cobroker course to help cobroker sell more new homes, sell more listings, and sell more resales by prospecting for new homes buyers. It is a Builder-Certified New Homes Cobroker training system, based on my long and successful career as a new homes cobroker.
After specilizing for more than 30 years in ‘new homes and condominiums, selling more than $3 billion, as the listing agent for more than 70 communities, I decided to write a cobroker training program that both home builders and real estate agents should take, because the both need it.
May I say, kindly, that the relationship between home builders and real estate agents has not changed in more than 30 years, and will not change in the future if we don’t come to grips with some issues on both sides.
Let me hasten to add here that I am not upset with anyone. I am not a member of the NAHB or NAR, and don’t not plan to be until I finish what I set out to do – change the way Realtors and builders’ think about working with each other.
Here is what may be just a tad controversial to some. Here is what I teach at the naked truth level:
General real estate agents do not sell new homes, but they well be the reason the new home sells.
General real estate agents do not need to know construction, finanancing, or anything else to bring a qualified prospect to a new homes sales office.
General real estate agents are trained to ‘show’ homes. Onsite agents are trained to sell homes.
General real estate agents are trained to encourage offers. Onsite agents are trained to ‘protect price’.
General agents will show fewer qualified prospects more homes. New homes agents are trained to show one or two homes to any and all who walk into their front door.
New homes builders are easier to work with than many resale homeowners
New home models are the most saleable FSBO’s in the market.
And the list goes on.
In my opinion, onsite agents cannot train general agent to show new homes, because they don’t live where the general agent lives. It would be like a general agent training new homes agents to sell new homes. It would make no sense.
Anyone who has been around a while knows that there are things that need to be said to the cobroker community that a home builder just couldn’t say, as it relates to sales office protocol, model tours, follow up, etc.
Statement from NAHB Chairman Bob Nielsen on President Obama’s Address to the Nation
September 9, 2011 – Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev., today issued the following statement regarding President Obama’s address to the nation last night:
“While the nation’s home builders commend President Obama for tackling critical employment issues, it’s discouraging that the Administration still fails to recognize that housing has a central role to play in restoring the nation’s workforce.
“In normal times, housing accounts for 18 percent of the nation’s gross domestic product, and nothing packs a bigger local economic impact than home building.
Constructing 100 average single-family homes generates more than
- 300 full-time jobs,
- $23.1 million in wage and business income and
- $8.9 million in federal, state and local tax revenue.”
“Housing has traditionally led the nation out of past recessions and needs to be playing a far bigger role than it has so far in today’s lackluster recovery. That won’t happen until
- “Federal regulators move to end the credit freeze for new home production,
- ‘Banks allow qualified home buyers access to affordable home loans and
- ”Policymakers acknowledge there is a clear need to support home ownership and get housing moving again to spur growth, create jobs and restore consumer confidence.”
Publisher’s comments:
I have a challenge for President Obama: Set goals for each leading indicator segment: housing, manufactoring, etc.
Based on the above numbers, set a goal to construct, say 50,000 a homes a month annualized to say 50,000 homes a month.
This would measurably produce 150,000 jobs a month, not to mention the jobs created in the manufactoring sector by the demand for appliances, carpet, paint, roofing supplies, and on and on.
Seventy percent of the new homes sold today are sold by real estate agents, so you would be helping this market grow, and sell more resales, because many new homes prospects purchase resales.
According to the National Association of Realtors, 50 percent of all homes sold are sold to first time home bueyrs. Renters mostly who are facing rising rents, which force them to look for homes. The fact that homes can be purchased for less than it costs to rent in many markets is a critical piece of this plan.
Dr. David Crowe, chief economist for the National Association of Home Builders said that there is an estimated 2.1 million ‘unformed’ households, and the number many be as high as 3 million. These are families who have moved back with family and friends or never moved out the first time. This group consists of both potential renters and buyers, but the point is they are UNENCUMBERED. It would not be surprising to me to find that a large percentage of this number actually worked in the construction industry and would welcome the opportunity to work in it again.
No short sale, no home to buy.
What all of this needs of course is a vision. It needs a sound. Visibility. There is no sweeter sound or site if you want to see the signs of a recovery than the site of rooftops, and the sounds of nails pounding away, with an electric saw humming in the background.
No other industry can offer the face of new homes being constructed.
Summary:
Primary target: First time home buyer
New Homes Permits Pulled: 50,000 per month
Jobs added: 150,000 a month
Promotion: NAR/NAHB combine marketing funds to push strong cobroker effort. Seventy percent of new homes sold in many markets are sold by cobrokers. This could be a major unifying and public testimony to the world about how two major housing groups, solved the housing crisis.
The night you speak to the nation with a specific plan to create jobs through new homes construction will be the night your political star resurfaces.
What would be the disadvantage to you to at least have a discussion with representatives of these two organizations, but ask them to bring you a specific plan.
You asked for ideas. I hope you like these. This is America. We can do this.
David R. Fletcher, Founder
New Homes Niche
407. 352.5500 (direct)
The Greatest Trainer The World Has Ever Known
As we move through our sales careers, no matter the profession, we meet and see some incredible trainers. And we remember them through the years, although we might forget exactly who taught us the “one thing to remember, if we don’t remember anything else.”
Who would you say is the greatest trainer ever? I’ve been thinking about this lately, because as a trainer, I have to be careful, especially in hard times, to make sure what I am sharing is the truth. How do I know it works, for sure? Unless it is a principle, I must know by my own experience or the experience of someone I totally trust.
My ego can get in the way, I can become so enamoured with my own stuff that it’s all I talk about. I can do the one thing I must guard against-quit learning.
My nomination for the greatest trainer, and by that I mean the person who affected more peoples lives than any other trainer who ever lived, is Jesus.
I heared people call him a great teacher, yes. Trainer? Then one day I started reading what I thought had to be a great book on training..and it was that and more.It is book that I could not put down, because as a sales person, sales manager, and sales trainer, I am always looking for the truth in what I read. The author of this book is A.B. Bruce. It’s title,The Training Of The Twelve. It is an exhaustive study of how Jesus trained his disciples.
His technique was simple: He used stories, or parables, to make spiritual points, but what caught my attention was how the same parable had such practical applications for living.
For example, Jesus used the parable of the good Samaritan when he was challenged to define “neighbor” when he told the questioner to “love your neighbor as yourself.” Here is the parable, followed by a practical truth. Amazing.
30 In reply Jesus said: “A man was going down from Jerusalem to Jericho, when he was attacked by robbers. They stripped him of his clothes, beat him and went away, leaving him half dead. 31 A priest happened to be going down the same road, and when he saw the man, he passed by on the other side. 32 So too, a Levite, when he came to the place and saw him, passed by on the other side. 33 But a Samaritan, as he traveled, came where the man was; and when he saw him, he took pity on him. 34 He went to him and bandaged his wounds, pouring on oil and wine. Then he put the man on his own donkey, brought him to an inn and took care of him. 35 The next day he took out two denarii[c] and gave them to the innkeeper. ‘Look after him,’ he said, ‘and when I return, I will reimburse you for any extra expense you may have.’
36 “Which of these three do you think was a neighbor to the man who fell into the hands of robbers?”
37 The expert in the law replied, “The one who had mercy on him.”
Jesus told him, “Go and do likewise.”
Jesus was teaching about spiritual things, but look at what comes out of this parable as a ‘truth’ about five ways to treat people:
1. We can exploit people. Take advantage of our expertise and knowledge (the robbers exploited their victim)
2. We can treat people as a problem to avoid (the priest saw the problem, crossed the road). How often have you avoided people in need of something as small as a kind word?
3. We can treat people as a problem to discuss (The Levite saw the wounded man, ignored him and probably discussed him at home that night). Ever gossiped or said something about someone that would harm their reputation?
4. We can treat people as customers, ones to make a buck on. The Inn Keeper saw an opportunity to make a buck. Nothing wrong with this. It’s business.
5. We can go the extra mile and help those in need because they need help. Do you know anyone that could use a phone call or a personal note?
When I started ‘getting it’ with the help of the author, this book came alive to me, because he was discussing a man who had nothing– no home, no money, no position, no family, no standing in society, who was sought after for what he could do for others (healing), picked 12 uneducated men from wide and different backgrounds and within three years trained, coached and mentored them to carry his message to the world after he left this world.
What are your thoughts?
Commission Sales Agents: Be Sure To Learn Your Lessons
Good, sharp selling skills are a business imperative for real estate agents, especially today. But there is something much more to learn than skills. It took me years for this to sink in.
My undertanding changed one day after years in the business when I sat down at my home-office desk, got out a yellow pad, and starting remembering the lessons I had learned through the years, who taught them to me, and under what circumstances they were learned.
I learned to laugh at myself, the night my coat caught on fire in front of the CEO of large lender and 450 of his closest friends came over, learned what happed and started laughing so hard they started crying. I learned that ‘we all have room for improvement’ from my daughter’s fifth grade teacher, and other ‘unintentional mentors”.
I learned what ‘hurt’ feels like in the ninth grade,when I made the baseball team as a pitcher and the team’s senior catcher asked me to throw my fast ball to him. I was excited. This was big deal. The senior catcher wanted to catch with ME. With his buddies watching, he caught me barehanded. I learned that day to never try to make a fool out of someone else, especially when they are giving it a hundred percent.
Mr. Chet Vanscoy, now deceased, taught me that ‘lessons’ are more important than skills.
He was an experienced sales manager. I was his manager, with no real sales experience. I asked him one question: If you had one piece of advice to give me to be successful in real estate, what would it be? Without hesitation, he said :”Patience.” Learn to be patient. What? He then said this and I never forgot it.
“I can teach a high school student how to sell. Learning skills is the easy part of selling. But if you don’t learn patience, you will not need the skills because you will be out of business. If you cannot handle the broken appointments, cancellations, late closings, in additon to the rejection that in inherent in sales, you will not make it in real estate.”
I came up with 14 lessons I learned along the way, and only two from trainers. I will be sharing some of them in the days ahead. What lessons have you learned? Feel free to share here. And if you have never done what I did with a yellow pad, try it. It will help you appreciate a lot of people that helped you along the way, and they never knew it.
Realtors Encouraged To Prospect For New Homes For Unusual Reason: To Increase Resales And Listings
For years, in fact throughout modern history, real estate agents have shunned new homes prospecting. They did not understand homebuilders; Homebuilders saw the Realtors commission as an extra and heavy expense on top of their advertising budgets.
Today in many markets, ‘cobroker; sales represent 70 percent +/- of all sales in the builder’s subdivision. It is only a guess, but your local builders will tell you that internet traffic far exceeds that of the Realtor, but the Realtor’s prospect far exceeds the delivery of a ready,willing and able buyer.
Homebuilders are getting walk-in traffic from bandit signs, the internet, and traditional media. A large percentage of this traffic is not a ready, willing, or able prospect. Realtors, however, qualify their prospects before putting them in their cars, so it stands to reason that Realtors have the buyers. A few home builders are staring to see the cobroker as the customer and are delivering precontract qualifying and appointment setting services for the Realtor.
As the homebuilding industry continues to understand the significant contribution Realtors are making to new homes sales, more real estate agents will start asking for ‘new homes’ training.
The irony is this: New homes prospects buy resales, tend to purchase higher priced homes, are better qualified, and many have homes with low mortgages or no mortage, to sell.
Prove me wrong, if you can, and I will correct my assumption.
Realtors: Meet Two Objectives At Builder Events And Watch Your Sales Increase
If at all possible, every Realtor in the market should attend a builder’s open house, with two objectives:
1. Get an update on the location story
2. Meet the top producing cobroker for that community
Here’s what you probably do now: get a drink, socialize a minute or two, wander around the models, get something to eat then sit the rest of the night with the people from your office. The same ones you were with that morning at the sales meeting or some friends you had planned to there.
Here is a better plan:
1. Get a location update –After you arrive, get your beverage then head straight to find one of the sales consultants that is on site at that sales office. Her her take you to the site table and give you the location story and the ‘urgency’ story. They have one, and it is usually shared at the site table. But what you really want to know is an updated location story,because knowing the location story and some details about the schools, parks, and playgrounds may help you with your resales and listing presentations.
2. Meet the top cobroker for that community. As you are building a relationship with the onsite consultant, learning about the location, ask her if their top selling cobroker is there. They might say “No, but she is expected to.”. Tell the consultant you would appreciate an introduction. When you meet this person, ask them two questions:
1. What do they like most about this builder?
2. What other builders in the area do they take or not take their prospects to?
Hearing this from a producing new homes Realtor will add confidence and trust. Once you have this information, get your food and sit at the table with your friend or fellow agents and enjoy the evening.
The good news is that you have accomplished some important business in a short period of time, that those who about through eating about the time you sat down, will never appreciate or know.
Interestingly enough, the better resale presentation you can make the more of both new and resales you will sell. And who better to help you, than the home builder’s new homes sales staff. A word to new agents. Make it your business to attend every builder open house you can. Then go with the purpose of meeting the two objective here. If there is a faster way to learn about a market area in your town, I am now aware of it.
Comments?
Cobroker Sales Are More Than Double All Other Prospect Marketing Sources, Including The Internet
Numbers don’t lie, but they could be conservative. Many homebuilders will tell you that cobroker sales represent 65-70% or more of his sales in this market. If that is true, that means that cobrokers brokers are out- selling internet prospects, bandit signs, and newspaper advertising by about 2 to 1 or double all other sources.
What would it mean to a home builder to increase cobroker sales by another 20% over the next year or for a real estate agent to sell two new homes among her resales in the next twelve months? Or for that matter increase her resales because she learned how to eliminate and/or compare new homes to resales in the early stages of the qualification/showing process.
Here is my simple, subjective but passionate plea to real estate broker owners, office managers, and sales managers: Please add a meaningful ‘new homes’ module to your required ‘sales’ training for your general agents. Agents need the sales, and you need the retention. The numbers say it all, and we have reason to believe that this less-stress option will prove to be a great move for your agents and the home builders in your market.
Welcome to Builder-Certified New Homes Cobroker training!
Myth Buster: Agents Don’t Need To Know Construction To Sell New Homes.
General agents don’t need to know construction to sell new homes. Where does this stuff come from? I have sold more than $3 billion in new homes and condominium communities and don’t know a level from a shovel. Ok, I do know the difference, but not much more.
In most cases, agents don’t write the contract, conduct any transaction management, or sell the home. What agents really need to know is how to find and qualify prospects for new homes. Then know what to do after they qualify them. Hint: Call the internet registration manager.