Written by David Fletcher, NHCB
This contribution is prompted by the overwhelming response to a recent piece that has drawn 72,295 viewers about why the 40-year REALTOR/Builder feud is over. Normal readership is around 12,000 mostly real estate agents.
Why are so many real estate agents showing an interest in new homes? Could it be because there is a growing need for saleable existing inventory?
The fact is rising ‘used-home’ obsolescence is driving would be resale buyers by the thousands “to wait.”
According to the National Association of Realtors Profile of Home Buyers And Sellers 2014 (page 23), forty percent of those who purchased new homes did so to “avoid renovations or problems with plumbing or electricity.” FORTY PERCENT.
In other words, if your resale prospect is looking at resales in the new home price range in your area, there is a good chance they will also look at new construction.
Single-family homes, the largest portion of the homebuilding market, rose 7.2 percent to a seasonally adjusted annual pace of 728,000 units in December 2014. It’s the highest level since March 2008, Source: “U.S. Single-Family Housing Starts Highest Since Early 2008.”
Meanwhile, Realtor prospects are buying twice as many new homes as those who walk into new homes sales offices without a real estate agent.
According to the National Association of Realtors, 67% of all new homes sold are sold to prospects introduced to the new homebuilder by a Realtor.
Yet, according to a study commissioned by Builder Homesite Inc, “nearly two-thirds of Realtors believe that builders are not offering useful training about how to sell new homes.”
At least homebuilders are offering training, which is more than can be said for Realtors. If Realtors were asked about their satisfaction with new homes training offered in their own office, an unquantifiable guess would be about 99% would say, ‘We get no new homes training.”
Realtors have left new homes training up to homebuilders, when in fact agents need new homes training presented through the agent’s filter, not the homebuilders, because listing and selling resales it the agent’s core business.
After all the years of teaching construction, energy efficiency , and why the sale is so easy why are Realtors are not finding home builder training useful?
Because what they teach does not engage Realtors in the sales process. The Builder Homesite study nailed it with this statement:
“There is a sizeable portion of Realtors that would welcome an outreach effort to engage them in a sales process and increase the proportion of new homes that they sell.”
But how do builders engage Realtors in the sales process? Simple. Put your products in the first place most agents are trained to look: the MLS.
Simple as 1, 2,3.
- Make sure your homes are well represented by price points in MLS
- Put your internet advisor in charge of your listings so your advisor can offer other inventory as needed with only one phone call from the agents.
- Make sure your internet advisor ‘service and contact information in on the homepage of your website.
This is how you “engage agents in your sales process.” Make sure the above drives your co-broker marketing program and you will do more ‘to engage them in the sales process and increase the number new homes that they sell”.
A. Agents do not need to learn how to build a home. They need to learn how to build their business. They need to understand that if they market to new homebuyers they will sell more resales and new homes. Cases studies support this premise.
B. Agents do not ‘sell’ new homes. They rarely show them. They introduce their prospects to onsite professionals. They work from a ‘showing’ schedule.
C. Realtors are trained to look for complete information on MLS data sheets. Provide it.
D. MLS participation sends an ‘all in’ message that confirms registration and commission policies.
In the meantime, let’s encourage Realtor leadership to assume responsibility for ‘new homes’ training for their own kind.
In our next column we will share some thoughts on what that training should be, starting with the fact that it must be based on the fact that listing and selling existing home inventory is the agent’s core business.