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

davidf@newhomesniche.com