Realty Times: Selling New Homes for Fun and Profit

December 1, 1999

Selling New Homes for Fun and Profit
by Dena Kouremetis

Walk into many real estate offices around the country you may find that there are agents who "specialize" in some form of real estate or another. Some are big in land sales, others in showing vintage homes, selling high end homes, aiding first time buyers, taking listings only, or becoming household words in certain "farm" areas or parts of town. You name it and there's a "niche" for every facet of real estate sales. Diversity is indeed what made this country great. Real estate or the sale of it is no exception to that rule.

How, then, does one become a specialist at representing buyers for new homes? These are the homes with model home parks and smiling on-site sales consultants, advertised with slick weekend newspaper spreads, complemented by billboards along freeways leading to suburban areas. Homebuyers are known to "map out" entire tours for themselves when looking for new homes, without the aid of a real estate agents, bouncing from builder to builder like the steel balls in a pinball game. Some are more sophisticated than others, having bought several homes before, and some are totally clueless as to what to look for in a new home purchase. But whether they are knowledgeable about what they are seeing or not, many buyers could use the skills of a good agent representing their interests when making a purchase as large as this. For now, I won't delve into how to procure a clientele for this purpose. Rather, I will discuss how to become an expert at builder/buyer relations.

Many agents shy away from new home tours with their clients, resorting to them only when they have admitted defeat in the resale market. What does this stem from? Perhaps the lessened dollar amount in cooperating referral fees paid by new home builders is a factor (some do not pay referral fees at all), but one would like to think that money is not the overriding factor in providing for their clients' needs. Another may be fear of the unknown; what advice can they impart their buyers? How much do they already know about the builder, his product, his inventory and the neighborhood? The third may be time factors, with new home escrows taking up to six months to close and produce an income for the agent.

What an agent representing buyers to builders may consider is that there is generally safety in numbers (many subdivisions have several hundred homes in their future), providing a ready source of homes and potential income as well. Cashing in on this area of agent representation, however, can truly become an art form.

How do I know this? Having been a builder agent for thirteen years before turning to marketing and then full time real estate journalism, I can attest to the beauty of the partnership between the Realtor and the builder salesperson, one I call a win-win-win situation. The real estate agent wins by successfully matching buyer with product, thereby ensuring their own income due to their efforts. The builder wins because it didn't have to rely solely on their advertising campaign to bring the buyer in. Best yet, the buyer wins because they have now found the home they were looking for. Builders realize that many agent-represented buyers would never have found their new home communities without help (although many won't admit it).

Agents wishing to specialize in new home buyer representation can take the following steps to prepare themselves for a systematic and (hopefully) steady income from new home sales:

Build rapport with the builder's agent. These agents are specialists in their own right. Perpetuating the myth that tract agents are "ticket-takers" will not achieve the desired effect, nor will it win you any points with them for the future. Builder representatives are usually well versed on their builder, product, the area and its future, and can work in tandem with you to find just the right home for your client. It was not unusual for me to even refer an agent and their client to another builder and subdivision, knowing full well that I did not have the home their client was looking for. Why? Just because I liked them and was looking out for their buyer. (What goes around comes around.)

Make it your business to know everything. Collect builder brochures, preliminary floor plans, press releases, and advertisements on every builder out there in which you can put your faith. Call weekly for updates to the builder's sales office for regular bulletins on price changes, incentives, inventory, and homes that lose buyers (making them among the "ready to move into" variety.) Keep a builder file by area, by builder, by price or by floor plan. Just - do it! How impressed will a buyer of yours become when you can instantly spout off where a 2500 square foot two-story home with a downstairs master is located?

Be a buyer advocate, but understand the builder's perspective as well. Has the builder represented things to the buyer that are not materializing? You can be the squeaky wheel to the builder, earning you credibility with your buyers and needed referrals. Is the fact that the builder cannot add another last minute electrical outlet after the sheet rock has gone up unreasonable? You can explain cut-off times in production home construction to your buyer, taking the "bad guy" status off the builder's representative, and they will thank you 'till the cows come home.

Drop in and refresh your memory even when you don't have buyers. Stroll through the models once again; drive by newly trenched and prepared home sites. Take note of new "available" signs for future reference. And, of course, build that rapport with the builder's agent once again! When the on-site agent suddenly loses a buyer, creating more inventory, who do you think they may call first to let them know?

Outside agents and builder agents are oftentimes seen in different "camps", unfortunately creating a superficial "us and them" agenda. Why spend time trying to figure out the reason for this phenomenon? If I were bent on becoming a successful buyer's agent for new homes, overcoming this would be my primary goal. I would concentrate instead on becoming a builder's household word, no matter how reticent the builder's agent may appear. After all, what would I have to lose?

This is not my first article on builder/Realtor relations, and it probably won't be my last. With the advent of the Internet and so much self-reliance within the industry, the important services a Realtor can provide to new homebuyers can be worth much more than the amount of monetary gain involved. The Realtor can be a resource and a friend to both their new homebuyers and the builders they patronize for years to come. The partnership is powerful, and the rewards are great.

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