Tuesday, 11 December 2018
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This Old House - Do-it-Yourself

Builder/Realtor Relationships Poised For Long-Term Win-Win - Part 1

Written by Posted On Monday, 21 May 2018 16:11

I have been asked to write a series about the status and future of builder/Realtor relationships.

To quote Associated Press feature writer Saul Pett (now deceased) when asked to write a feature story about feature writing for feature writers, he said:

“I feel about as comfortable as a condemned man, lecturing the firing squad on marksmanship because everything I say can be held against me.”

Who would have the nerve to think what anyone had to say mattered to 1.3 million Realtors, most of whom are not encouraged or trained to work with homebuilders?

After thanking home builders for providing much-needed inventory, I can only think of two things to say to this hardworking, risk-taking group:

One, stop telling Realtors they won’t get paid if they don’t bring the prospect to your sales office first. This 40-year policy became outdated about a generation ago the first time a home shopper completed a builder's internet registration form. We both know you make exceptions on a regular basis. Why not say so up front?

Two, stop telling Realtors they need to learn construction because nothing could be further from the money – or the truth. There no evidence to support this assumption. Case studies do, as we shall see.

What caused builder/Realtor relationships to evolve from mistrust and disdain to a growing dependence on each other?

The most important event by far happened in August of 2012, when Realtor.com and Builder Digital Index (BDX) announced a partnership whereby BDX would feed its national inventory of new homes to REALTOR.com.

Homebuilders now had what they had long lacked, access to the Realtors Multiple Listing System (MLS). And Realtors had access to inventory of new homes in a format they are trained to use. Realtors can find inventory of new homes, floor plans, prices, amenities, and more side by side with resales.

The increased demand by new home shoppers forced Realtors to start showing new homes, whether they were trained to or not. It seems to be working big time.

“Millions of new home shoppers were drawn to this new service,” according to Senior Vice President of Channel Sales and Operation, Tricia Smith, speaking at the 2018 National Association of Home Builders International Builders Show in January.

In December 2013 the headline below appeared in Realty Times:

Bank of America Urging Home Builders and Realtors to Work Together.

“If you are a REALTOR® looking for some unusual but timely business advice from a banker, E.J. Achtner, Senior Vice President of Bank of America, has some for you.

"Education, training and relationship-building are essential to tapping the new homes market."

Why is a banker suggesting new home training to Realtors?

According to Achtner, "many builders, regardless of their size, are taking a much more collaborative view of partnering with Realtors than in the past and we encourage our builders to work with Realtors.”

It would be safe to assume that other lenders started encouraging their builders to do the same thing,

Then less than two years later, more than 25 MLS Partners were offering inventory of new homes from their local source.

BDX Announces 25 MLS Partners Providing Access To New Construction Inventory For 400,000 Realtors.

"With our partners in this effort, nearly 400,000 REALTORS® have direct access to New Home Source Professional through their MLS today," said Tim Costello, President and CEO of BDX.

"More than half of all home shoppers consider new construction, so it's imperative that we continue this industry collaboration to help agents and brokers serve their clients.

“Today builders and Realtors are working closer together than ever,” Costello said.

Systems are in place to communicate clearly and accurately. Commission issues are few and far between.

While builders are finally working within the MLS system, they still have a way to go with their Realtor training. A study said they need to do a better job of bringing Realtors into their process.

Two Out Of Three REALTORS Say Homebuilder New Homes Training Is 'Not Useful'

According to a study commissioned by Builder Homesite Inc, "nearly two-thirds of Realtors believe that builders are not offering useful training about how to sell new homes."

Why? Because what they teach does not engage Realtors in the sales process. The Builder Homesite study nailed it with this statement:

“There is a sizeable portion of Realtors that would welcome an outreach effort to engage them in a sales process and increase the proportion of new homes that they sell."

A national position on a few key issues would be helpful. We will get to those issues in Part 4.

 

Summary: Except for a lingering lack of trust, there is no excuse for Realtors to ignore inventory of new homes.

Homebuilders, your training question is this:

‘Is what I am saying, or about to say, building more trust in my product or me?”

If you struggle with the answer, you need to rethink your message, which we will address.

 

Next: Part 2 How Experienced New Home Co-Brokers Feel About Selling New Homes

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David Fletcher, NHCB

Lifetime Achiever David Fletcher spent an entire 30-year career working with homebuilders, builder developers, and real estate agents. Teams he recruited, trained and supervised for more than 70 communities, sold more than $3 billion.

He is the founder of New Home Co-Broker Academy, LLC, where more than 2500 Realtors have earned their New Home Co-Broker designation. Those earning the NHCB designation must complete the online course, How To Build A New Homes Niche and pass a 20-question multiple choice exam.

newhomecobroker.com

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