First Time Registration Policy is a Myth

Written by Posted On Tuesday, 23 April 2024 00:00

Forgive me if I step on some toes. I don’t mean to, but I need to correct a long-standing myth.

The misunderstood first-time registration policy has cost builders thousands of sales and Realtors millions in commission, and it has got to stop! It is a myth.

Pardon the personal references, but I need to crow.

What you are about to read can put thousands of dollars in your pocket and generate a sale the builder would have missed.

 For more than twenty years, I sold new homes as a listing agent for builders and condominium developers. I founded New Home Co-Broker Academy and teach only what I know.

The first-time registration policy is a myth.

Don’t take my word for it. Call a production builder the next time the following scenario happens to you and see what the builder says.

Will this happen more than usual due the NAR Settlement? Yes.

Home shoppers will flock to new home communities both in person and online like crazy; about 95% of them will not be ready, willing, or able but are just looking.

Builders want the broker’s business for one reason: Realtors control the qualified resale buyers, about half of whom will consider a new home if they are shopping resales at new home price points. For the record, they are referred to as the ‘indifferent’ market. They will shop resales and buy new and vice versa.

Expect to start meeting resale shoppers who registered with new home builders before they ever thought about you.

Here’s how you get paid:

Here is what our course teaches agents to do. If you have already done so, another course may copy this if you like, but at least give us credit.

 It needs to be taught in every broker's office to every agent who has the slightest chance of working with a buyer who might want to buy new homes.

You have been corresponding with your resale prospect for months. When you meet them, out of nowhere, they make this statement:

“Last Friday, we visited a builder (or they had been talking to a builder before they met you) to get some ideas, and we fell in love with the Palm model. When we go out to see resales, can we stop by the builder’s homes to see the Palm model again?”

What did your prospects just tell you that they did not say?  They are registered with a builder! A builder from whom they might purchase a new home.

What you say next will cost you thousands of dollars and possibly a loss of trust.

Here are some possibilities: All wrong.

  1. 1.  “You are paying my commission, so I will happily show you any home you want to see.” All together now, what will your prospect say? “We have already seen the house, and if we buy it, the builder will do all the work, including writing the contract, so why would we pay you anything?”
  2. 3.  “If you buy that house, the builder will not pay my commission, so you must pay it out of pocket. See #1.
  3. 4.  “Yes, we are familiar with that builder and will happily show you comparables.”

Here is what you should have heard your prospect tell you.

“We are a hot prospect for a builders’ home, and you may have a sale without ever showing us a resale.”

Here is how you respond to this home shopper who wants to return to a builder’s home they have already seen:

“Of course I can. I will call to set up a convenient time. Do you remember the salesperson's name? “Yes, here is their card.” “No, I don’t.”  Their answer does not matter.

Get the builder's name and phone number, perhaps from the builder’s website, and call the sales office. If you know the sales manager or agent, ask them. If not, talk to the sales consultant who answered the phone.

Once the agent is on the phone, say something like this:

Hi, this is Bill Brown from Brown Realty. I have a good prospect for your builder sitting in my office. They were out last Friday and no doubt registered with you. We will be looking at homes this afternoon and wanted to stop by again and see the Palm model.

What did the onsite agent just hear?  Something along this line:

“I have a red-hot prospect for one of your homes, and I control what they see. You may never see them again.”

The onsite agent is already checking for the registration, date, and notes regarding your prospect.

“Here’s the thing. I have to assume that my prospect registered with you before meeting me, so I guess I am asking how I get paid if I bring something back and become the securing cause of the sale. “

Don’t say one more word.

If you are talking to a sales agent with a production (national or regional builders) that has been selling in your market for a while and is paying co-broker commissions, you will hear something like this 95 percent of the time.

“Bring them back. We will protect your commission.”

In other words, the commission registration policy is on a case-by-case basis. Homebuilders who are paying co-broker commissions knew what their co-broker policy would be before they bought the land.

Onsite sales agents sell against quotas. They are well trained and need your co-broker sales.

When you respond honestly by sharing your prospects' names, you are signaling to the on-site agent that this is not a test. You are not playing games. They will appreciate you and how you do business and want to do more business with you.

Action plan: Send your local builder contacts a link to this column and see what they tell you.

Attitude adjustment: Realtors working in new home markets will be the big winners in the NAR Settlement if they make an effort..

Attribution would be appreciated for sales trainers and others who want to share this This email address is being protected from spambots. You need JavaScript enabled to view it. with your agents.

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