Sunday, 05 April 2020

2020 Vision: Saleable Inventory To Become Even Tighter

Written by Posted On Friday, 10 January 2020 17:39

I've been asked what I see for the residential real estate industry in 2020. As I always say when asked my thoughts on such matters, I feel like Associated Press feature writer Saul Pett, (now deceased) said he felt when asked to write a feature story about feature writing for feature writers. 

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

In 40 years of working with builders and condominium builders/developers, I have never seen such a tight market for saleable resales. And the listing inventory opportunities are about to get worse. 

Discount listing services are making their way through the listing gate.  Some will be heavily branded with strong marketing budgets. Sellers who use these services will include for-sale-by-owners, some with unsalable properties for price or functional reasons, as well as others who are not in a hurry to sell but are willing to try it. Could I be wrong? Of course, I could.

The market will figure out the real vs. perceived value of these shops. This service may confuse the listing market for a while.

The reality is that your business success depends on what you offer for sale that is saleable. The less you have to sell, the less you will sell. 

There is an option.

 The days of thinking that Realtors sell resales and builders sell new homes ended with the internet. Today’s buyers have a need and the right to expect better service from a Realtor than just resales. They expect their Realtor to serve them for both resales and new homes. 

In November 2018, the National Association of Homebuilders reported that 38% (almost two out of  five) home shoppers were “undecided,” meaning resale shoppers would consider a new home and new home shoppers would consider a resale. 

But  even better news comes from the homebuilders, especially the production builders who are reaching out to Realtors with market-rate commissions, bonuses, and free seminars. 

Commissions are consistent. Bonuses are not uncommon. Builders understand that Realtors control the one thing builders need most- qualified buyers. 

Realtors are starting to understand that builders pay Realtors for one thing:  introduce a prospect who buys the builders home. Period. No need to learn construction, how to write a contract or manage the transactions.

If your prospect is looking at $400,000 resales, show them a $400,000 new home. 

Depending on their price point, homebuilders are seeing co-broker sales ramping up to 70% and higher while providing a full transaction management service, writing the contract and closing escrows. 

 Look for home builders to offer the same resale technology regarding virtual reality and artificial intelligence. Builders will use it to draw prospects directly to their website, as they should.

Don’t mistake this as being anti--Realtor.  Their marketing programs have no effect on your builder sales.

Reading between the lines, we need to make some assumptions based on accepting the above as ‘the current situation.” 

So what can we expect? 

Homebuilders 

• Expect local Realtors to introduce their qualified shoppers by virtual reality
• Expect local Realtors to meet with your onsite consultant on behalf of an absent but qualified prospect.
• Expect prospect registration of these prospects to be requested and perhaps test your ‘first-time introduction’ policy.  The challenge is to offer a consistent policy.

Realtors 

• Become current and stay up to date with the latest technology that has to do with virtual reality.
• Include new homes in your residential listings.

The greatest need for the new home industry in 2020? 

Builders will need more qualified prospects, which Realtors control. Realtors will need more saleable inventory, which builders provide. 

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David Fletcher, NHCB

Lifetime Achiever David Fletcher is Founder and CEO of New Home Co-Broker Academy LLC, home of the New Home Co-Broker (NHCB) designation. More than 4,000 real estate agents have completed the  Academy's course, How To Build A New Homes Niche, a three-hour online course based on research, case studies and David's  long career recruiting, training and supervising onsite teams, who sold more than $3 billion new homes and condominiums.

Along the way, he wrote Condominium Sales and Listings and has been the featured speaker for the National Association of Realtors and a present at the International Builders Show. He served as chair of the Sales and Marketing Council for the Florida Home Builders Association. 

He started in real estate as the project manager for Bay Island, of the first major condominium communities in Florida. During this time, he obtained his Florida real estate broker's license, served as chair of the Sales and Marketing Council for the Florida Homebuilders Association, earned his MIRM designation, and served as president of the Florida Condominium Developers Association. It was here that he leaned to work with local Realtors, 

After a successful three-year run, he brokered 27 lender workouts, 11 rental conversions, a TPC golf course, and more than 1000 condominium units in six different communities. 

He recruited, trained and supervised onsite sales teams for more than 70 communities, always insisting on co-broker cooperation in his listing agreements. 

He has been a contributor to Realty Times for 16 years and contributed to Inman News for 3 years. 

His education philosophy is based on these simple assumptions:

  • Builders need qualified buyers. Realtors need saleable inventory. 
    Today's home shoppers expect their Realtor to help them navigate the buying process whether it be for a resale or new construction. 

To lean how you or your office can benefit with our popular online new homes course, visit our website. 

newhomecobroker.com

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