Renovation bids are too high. Multiple bids for resales are too low. Deal killers, morale busters both. Could this be why bid-free, ‘no renovation' bids are driving resale buyers to ‘new homes?"

All the standard reasons to buy new homes still apply, but, according the National Association of REALTORS®, forty percent of all new homes bought by Realtor-generated buyers in 2014, were purchased mostly as an option to renovating a resale.

General agents do not ‘sell' new homes. They introduce their prospects to onsite agents who do the showing and the selling. Therefore, there is no need for an agent to learn construction. What general agents need to learn is how to qualify resale prospects for new homes and how to find new homes fast, beyond MLS searches.

According to a study by Builder Homesite Inc., a builder consortium formed in 2000 by thirty two of the largest homebuilders in the United States, thirty-five percent of the home shopping market will look at both new homes and resales. I have written about this ‘game changer' marketing study for the last two years, because it changed the way builders look at Realtors and themselves.

New homes consultants are in an awkward place because they see the numbers. They know that according to the National Association of Realtors sixty seven percent of all new homes sold are through their co-broker networks.

Yet, you rarely see a Realtor marketing program included in a builder or Realtor national convention program or discussed in new-year marketing strategies.

Why?

Because everybody knows that if homebuilders could cut out the cobroker commission, they could make more money on the house. In the past, when markets become as strong as the one we are now experiencing, homebuilders would cut broker commissions, creating more confusion within the Realtor community, resulting in Realtors staying away from ‘new home' training.

Not so today. Production homebuilders are competing for co-broker business like never before and are providing all transaction services plus presale services via their internet advisors.

The above is addressed to help Realtors understand that the builder/Realtor commission issues are practically non existent.

Just look around in your market. We are in a seller's market in most markets yet homebuilder marketing programs are as aggressive as ever. They need Realtors and Realtors need their inventory.

Homebuilders reach out to Realtors because Realtors have the qualified buyers in their car, and the homebuilders via their own studies know that thirty-five percent of them will consider a new home. they also know that the vast percentage of walk in traffic is either not qualified, motivated or both.

By the way, according to the BHI study, nineteen percent will purchase ‘new' and not consider resales. If your agents are not marketing to new homes buyers, they are in effect ignoring one out of five home buyer prospects, some of whom will purchase a resale, of course, and will have homes to list.

Which brings us to the reason ‘new homes' training cannot be separated from resale training. New homes inventory should be positioned as ‘salable' inventory options for home shoppers looking for resales at the price point of new homes or above.

So, how do you, a trainer, squeeze a new homes training program into your current training system and making it part of your resales and listing training, which it should be. What do you include in the training?

Suggestions:

1. Understand your market. What is the new home price point in your market? Do you know? If the new homes price point is $250,000 and your agents are working with a resale prospect in the $250,000 range or higher, would it not make sense for the agent to show the new home as a matter of establishing a baseline price showing the prospect what they can buy for their money?  It will help sell more resales, because the new home visit gives the home shopper a fixed price example of what can be purchased for the money. 

2. Include how easy it is to find new homes inventory on short notice, for those fun times when the agent gets blind-sided with a request to see new homes ‘while we are looking at resales'.  Hint: call one of the internet advisors your agents you train them to place in their contact system.

3. Keep it short. Offer it online eventually. (No management. No time taken from resale training).

4. Always remember: it is not the general agent's job to ‘sell' a new home. It is the agent's job to help the home shopper find the home they want to buy, be it resale or new home.

So, in reality, agents don't need a ‘How To Sell New Homes' course. They need to learn to show salable inventory to qualified buyers who can afford what they cannot only see, but purchase without bidding and move in without renovating, be it resale or new a new home.

What's your opinion?