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Eighty Four Percent of Existing Home Shoppers Use Realtors To Buy New Homes

Written by Posted On Monday, 17 February 2020 03:47

Eight four percent of new home purchases, preferred existing homes. Ninety one present  who preferred a new home purchased an existing home. What more proof is needed to convince real estate agents to farm new home shoppers and qualify resale shoppers for new homes?  

According to the NewHomeSource Home Shopper Survey – Wave 5, published in May 2019.the results shown below may be the trigger to encourage resale professionals to add new homes to their ‘resale showings.

Use a Realtor®

1. Purchased New. Preferred New               65%               
2. Purchased New. Preferred Existing         84%
3. Purchased Existing. Preferred New         91%
4. Purchased Existing. Preferred Existing   90%

Survey: Base: All 2018 Recent Buyers (Purchased New + Prefer New): 1,110 (Purchased Existing + Prefer New): 963 (Purchased Existing + Prefer Existing): 1,531 (Purchased New + Prefer Existing): 104 ●Q14: Did you use a real estate professional?

 “As expected, Realtors® play a dominant role in the purchase of existing homes. Agents typically assist buyers who prefer existing homes in purchasing one.  However, agents are also involved with the 91% of buyers who prefer new, but buy existing homes,” according to the survey.

Realtors® were involved with 84% of buyers who preferred existing homes but purchased a new home. 

One thing is clear. The home buying public is ready, willing and able to use Realtors® to purchase both new and existing homes and Realtors®need to include those who prefer new homes in their overall marketing plans.

The study says “only” 65% who purchased new and preferred new homes  used a Realtor® as compared to the higher percentages. 

In my opinion, 65% is not an ‘only’ it is a real world ‘wow’.  Think about it. Realtors® sell 65% of all new homes sold, a percentage that is usually supported by NAR and Home Builder Association  reports. 

Why are home builders paying market rate commissions and in many cases bonuses to draw 'co-broker' sales  in such a good market?

Answer: Because they need qualified buyers and they know that Realtors® control 90% of the home shoppers in the market.

Why do builders insist on providing all the services, including writing the contract, that the agent provides for resale shoppers?

Answer: Because many have professional staffs that can better serve the new home buyer and are motivated to perform at a high level.

 One reason the 65% is not higher is that home shoppers can visit model centers without a Realtor®  and that’s the way it should be. 

A home builder arguably is the most motivated for-sale-by-owner (FSBO )in America. Many hold  ‘open house’ in model centers seven days a week and invite shoppers to visit the model without a Realtor, something listed resale inventory is not positioned to do.

There is another reason the 65% is not higher. Many if not most resale agents are not comfortable showing new homes and are not trained to do so. As a result, many agents don't show new homes unless requested.

Then there are those who would show new homes, but are not encouraged to do so and therefore not trained.

Recently an agent said she had shown resales to a couple for five weeks who ended up buying a new home over the weekend without her assistance.  They had shopped new homes over the weekend “just to get some ideas” and fell in love with the floorplan. 

The couple had  insisted on a home with a pool and were adamant about not looking at new construction because new homes were “too expensive”. 

Why did they buy the “too expensive’ new home?

Answer: They ran into an onsite sales consultant trained like most are to deal with every objection known to mankind. 

The consultant showed them the model home, which incidentally did not have a pool. It did have a nice backyard.  Some of you know where this is going. 

The couple said they fell in love with the floorplan, remember?

The consultant made this suggestion: “Why don’t you move in, give yourself a few months to look at pools and prices and when you are ready, add the pool?”

They liked that idea, so when the agent shared the incentives with them, it ‘just made too much sense.” 

Uh huh. Good bye $12,000 commission. Why? Because this agent did not know construction? No.  Was not a good closer? Not at all. It had nothing to do with her skills. It had to do with understanding the option offered by the onsite sales consultant and knowing when to present it. Had she suggested a new home without a pool while having lunch, chances are the couple would have have said 'no' because they had not seen the new home model and therefore had no vision that helped they them see, touch and feel how they could enjoy the floorplan.   

What do you think the chances are that this couple will ever add a pool? As opposed to using the community pool, for example. My guess would be just about the same as those who move to a
Florida condominium with a marina who plan to retire and buy a boat, but don’t. 

My hope is the real estate profession will see a marked improvement in retention rates when the National Association of Realtors® and other influence leaders decide that the time to start helping their members remember to add nw homes to their showing schedules as a matter of 'best practice.' 

Too many commissions are needlessly left   on the builder’s closing table that the builder is more than willing to pay. When we see research that shows that 84% of resale  shoppers who preferred an existing home, bougth a new home, there is no time to lose. 

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David Fletcher, NHCB

New Home Co-Broker Academy LLC offers affordable online new homes sales training and strategies based on the 20 year experience of its founder and CEO, David Fletcher. More than 5,000 Realtors earned their New Home Co-Broker (NHCB) certification over the past six years by successfully completing the 3-hour online course and passing an exam. 

Fletcher spend his 30-year career representing condominium builders/developers/ developers/single family builders and lenders He recruited, trained, and supervised an onsite sales team that sold more than $3 billion in more than 70 communities. 

His experience in working with both onsite agents and Realtors is unmatched in the industry.

To learn more about the course

 Broker/Owners - Due to the dynamics of the market, many of you will be approached with a request for new homes training beyond what you now offer. Some of you will be approached by agents who want to form new home teams, or you may rethinking about establishing a new home division. If so, as a professional courtesy, David, invites you to contact him for  a free consultation at davidf@newhomcobroker.com. No obligation. This offer may be withdrawn without notice.


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