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Wednesday, 29 January 2020
Agent Resource Center
Agent Resource Center

Keeping a Positive Attitude About Home Builders

Written by Posted On Sunday, 12 June 2005 17:00

One of the most financially crippling diseases known to commission sales people is "hardening of the attitude." The salesperson usually doesn’t recognize that they have the "disease," but it can spell the death of a career.

There is no medicine for this self-induced disease, and only the one who has it can cure it. It attacks the heart, travels to the brain, then comes spewing out of the patient's mouth in the form of cynical, sarcastic and critical communications.

Some say that it is more contagious than enthusiasm.

There are three major symptoms of this career-killing virus. If you know a fellow agent with any of these habits, move away from them before you develop the same affliction:

  1. They have little patience with just about everybody

  2. They complain and whine about almost everything

  3. They are usually the victim in sales situations

Now, a new strain has begun attacking some real estate agents over homebuilder policies.

The cause being the revision of co-broker commission policies in favor of the home builder.

There is a feeling among some builders that based on supply and demand today, sales would not suffer greatly if co-broker commissions played a smaller part in their program.

This attitude is giving some agents a hissy fit, and it shouldn’t.

Here are some recent case studies:

  • Case #1: An agent sold a $400,000 home for a 3 percent commission ($12,000), but the builder did not pay the agent for the upgrades.

    The result: The agent announced to her office, "I will never take that builder another client as long as I live."

    Antidote: Accept the fact that some builders don’t pay commission on upgrades, but they do pay a nice commission on expensive homes and do all of the transaction management.

  • Case #2: An agent sent their prospect to the new homes sales office, but did not accompany them. The builder advised the agent that in the future their commission would not be protected unless they actually brought them to the sales center.

    The result: The agent complained at the sales meeting that "builders are starting to get greedy and were looking for ways to cut the broker out of the sale."

    Antidote: Accept the fact that it is not asking you to do too much to personally escort your prospect to the sales center the first time. After all, you don’t write the contract and you can’t negotiate price, this is the least you can do. Your builders and prospects will appreciate your effort.

  • Case #3: A builder reduced his co-broker commission from three percent to a flat $2,000 per sale because they had 2,000 reservations for the release of 10 homes.

    The result: The agent reported that this builder was no longer paying co-broker commissions.

    Antidote: This builder has 14 communities in this particular market and had cut the commissions on this one community, not the other 13. They have been paying a 3 percent co-broker fee for years and 40 percent of their sales were sold by local real estate agents. Do not take anything as face value. There are dynamics in the market place. Prices change. Commission policies change. Confirm every rumor you hear. If you were to believe the agent, you could lose sales in 13 communities that are paying 3 percent.

Personally, I am grateful for new home builders. The vast majority I have worked with have been professional and cooperative. The thing we have to remember is that there is nothing emotional about the sale of a new home by a builder. It is their business. They are in it to make a profit.

Most of us have no idea how they fight to keep the price of their homes affordable in the face of labor shortages, rising material costs, land prices and governmental restrictions, which are the reasons why there are housing shortages in so many areas today.

If you want to quarantine yourself against hardening of the attitude about home builders, do the following:

  • Be thankful for those who pay you a co-broker fee. Actually thank them.

  • Quit sending people to the sales office with your business card and expecting a commission (which many builders have paid in the past).

  • Appreciate selling new homes, because you do far less for the commission than you would for private sellers, who sometimes have unreasonable emotional and financial baggage.

  • Do your homework. Call before you show a new home. Ask what the commission policy is including upgrades. If this is more important to you than putting your customer in a house they will truly love, that’s a decision you have to make.

  • As someone once said, you cannot control the wind, but you can control how you set your sails. You can’t control your sellers, whether they be owners of resales or builders. But you can control your response.

  • Respond with an accepting and professional attitude and it will put money in your pocket.
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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.Onsite sales teams he recruited, trained and supervised sold more than $3 billion in new construction for more than 50 communities.

He is the founder and CEO of New Home Co-Broker Academy, LLC, where more than 4000 Realtors have earned their New Home Co-Broker designation as of January 1, 2020.

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