Innovative Providence Developer to Continue Paying Co-Broker Commissions

Written by Posted On Friday, 12 April 2024 00:00

Matt Brown, vice president of sales and marketing for ABD Development in Davenport, FL, has an uncanny vision for meeting home builder sales challenges early and head-on.  

His response to the unsettling NAR settlement is a case in point. But resolving co-broker issues is not his first rodeo. Let’s understand why this is important.

The NAR settlement will become effective in mid-July, requiring major changes in how Realtors practice their profession. The biggest impact will affect resale home shoppers. Home buyers must sign a Buyer Representation Agreement before looking at resales. The agreement includes details about commissions and real estate agent fees, ensuring transparency about how their Realtor will be paid.

This practice is unsettling for real estate agents, but it opens the door for new construction to become the housing type of choice for Realtors working in markets where new home construction is a major factor. They may not have a choice.

No one seems to be discussing that this settlement does not apply to buying new construction if the builder is not listing homes with the local MLS.

Brown is doing more than talking about it.

According to Brown, seventy-five percent of ABD’s sales at Providence are made through Realtors, and Brown intends to keep it that way.

“Our commission will remain at three percent, and no buyer agreement will be needed. For presales, fifty percent of the commission will be paid upfront for a limited time.”

Brown said that ABD Development is also building four spec homes, ranging in price from $600,000 to $900,000.

“We look at Realtors as our clients,” Brown said.

“Realtors will have enough confusion getting used to the new way of working with resale buyers. We want to be a real solution and we will be” Brown said.

Taking early action to generate co-broker sales is not a new practice for Brown.  When Brown joined ABD Development at Providence eight years ago, his five home builders complained that local Realtors were not responding to their open houses and other events.

So, what did Brown do about it?

He thought beyond traditions. He does not tend to look outside the box because he does not use a box. He bases his thinking on ‘need’ and knows that real estate agents don’t get new home sales training from their brokers. He decided to offer new home sales training to help the agents sell more new homes.

Recognizing a gap in new home training, Brown took the initiative to bring in a trainer and sponsor, “How to Build a New Homes Niche,” a three-hour course that focuses 100 percent on the agent, not the builder or the builders’ homes.

Despite knowing this training could benefit competitors, Brown rightly believed the agents would remain loyal to the builder who empowered them.

He launched a free three-hour new home sales seminar covering negotiation tactics, incentive introductions, and bypassing construction details. His focus was not on selling homes but on training them to work with his builders and letting the builders sell their own homes. He wanted to see the response, with the idea of doing a second one if needed.

After the training session, agents were directed to the builder sales offices, and they were awarded a certificate after a model home tour and lunch.

When Brown assumed control of Providence’s sales and marketing, co-broker sales stood at twenty percent. The builders’ request for increased broker traffic was met with an unexpected surge in sales. At the end of his first year, sponsoring one seminar a month, the community averaged 35 sales a month, with co-broker sales at eighty percent.

Initially planning only a few seminars, Brown’s efforts expanded to forty-nine monthly seminars over fifty months. The training, “How to Build a New Homes Niche,” attracted over 2,500 agents.

Brown’s strategic foresight and understanding of market dynamics have been crucial during a transformative period in real estate, proving the enduring value of his innovative vision for home builders, home shoppers, and his company.

Brown’s vision-driven passion fuels his passion-driven sense of seeing what many can’t see and accomplishing what many will not try.

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