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The power of partnership is the reason why real estate agents and new home builders should work together
Just like many other industries, working in home building and real estate in times such as the ongoing COVID-19 pandemic comes with its fair share of challenges. But despite the big question mark that this entire year has been, today's hot housing market turned out to be a peculiar outcrop, with experts applauding the "V"-shaped recovery in home sales, especially those in the residential new construction market. In fact, the resilient homebuyer demand continues to outpace home resale inventory, whereas new home sales are sharply rebounding. Today's buyers looking to relocate and cash in on low-interest rates are considering new construction. In a nutshell, that is why real estate agents and new home builders should work together: to get clients into their dream homes – homes that will provide fond memories for years to come
Yet, home builders and real estate agents have a history of being uneasy neighbors. The two are, more often than not, pitted against each other in competition for buyers and sales. In fact, there are quite a few myths and misconceptions that realtors, builders, and even buyers hold that contribute to this relationship being portrayed as antagonistic.
For example, some real estate agents believe a buyer and builder's direct communication eliminates the need for an agent. Meanwhile, builders often fear that the sizable commission real estate agents take will decrease their profits. Finally, buyers sometimes are in two minds about using an agent's representation. That's primarily because they believe that they will get a better deal that way.
Don't succumb to all the hype – these myths are actually far from the truth. Here's a little myth-buster session!
For example, some real estate agents believe a buyer and builder's direct communication eliminates the need for an agent. Meanwhile, builders often fear that the sizable commission real estate agents take will decrease their profits. Finally, buyers sometimes are in two minds about using an agent's representation. That's primarily because they believe that they will get a better deal that way.
Don't succumb to all the hype – these myths are actually far from the truth. Here's a little myth-buster session!
One sure way to get the two to nod in the mutual agreement is to point out that their partnership works both ways, with each providing value to the other.
It's in a real estate professionals' best interests to stay abreast of the most up-to-date and accurate information about the different neighborhoods that builders are working in and to-be-built homes and condos available. It is about efficiency, and it is about information. The more informed the estate agent is, the better service they will be able to provide to the homebuyer. More agents today are choosing to bring their clients to the new home sales sites than ever before.
The builders' prime focus, on the other hand, is to have their inventory in front of agents as soon as they find a qualified buyer. There are plenty of new construction builders nationwide, but those who've been thriving for some time have understood the importance of nurturing long-standing, genuine relationships with those they work with - not the least of which are the buyers' agents. In fact, most builders consider agents a tremendous asset for their ability to bring in qualified prospects. They're a critical marketing component.
Revenue boost
The builders' prime focus, on the other hand, is to have their inventory in front of agents as soon as they find a qualified buyer. There are plenty of new construction builders nationwide, but those who've been thriving for some time have understood the importance of nurturing long-standing, genuine relationships with those they work with - not the least of which are the buyers' agents. In fact, most builders consider agents a tremendous asset for their ability to bring in qualified prospects. They're a critical marketing component.
Perhaps the most obvious reason why real estate agents and new home builders should work together is to increase revenue. An agent can get a commission for every home they sell based on the base contract price of the property. Fostering a good relationship with a builder means you can add to your income by recommending them to a prospect. A stamp of approval from a homebuyer's trusted agent will make closing the deal more likely.
Next, realtors® should also partner with custom home builders since these builders don’t have any inventory in the MLS to find them other than at BuildersUpdate.com. The two have the same target market – people looking to build a new home. What this means is that they interact with prospects inquiring about homes on a daily basis. This partnership, thus, increases the odds that they will refer you to their clients if they need agent's representation, thereby increasing visibility for your real estate company and reaching the target audience.
New valuable inventory
High demand and low inventory in today’s market are keeping home buyers on the sidelines and significantly slowing the rate of home sales. The housing market seems desperate for extra inventory. Luckily, the builders are working on adding what’s sorely needed day after day. This, in turn, creates opportunities for agents to increase their volume, and thereby, their profitability.
New construction offers peace of mind
Improved post-sale relationships
Every day, builders are adding new, and much-needed inventory to your market
But builders do not just build any inventory. In fact, agents intending to tap into the new-homes market will soon discover that it's one of the fastest ways to increase their bottom line and they have buyers. That's because, as we have mentioned, the rates of newly built homes sales are surging – and for a good reason.
Buying a newly built home can provide a level of confidence and freedom that resale cannot. The average resale home is roughly 40 years old. Thus, purchasing one can expose a homebuyer to various uncertainties and future investments, such as:
- a new roof
- new windows
- new HVAC
- interior upgrades
- energy efficiency
- etc.
New construction comes with the convenience of being move-in ready. So, if your clients are moving long-distance, they just need to find reputable movers to organize a simple move, and they get to walk into their new home worry-free with only their suitcases.
New Homes are move-in ready
But new-home buyers get more than just a new home. Owners get to participate in building their dream home with cutting-edge architecture and design, the latest technology, and energy efficiency. Last, but not least, thanks to the brand-new condition and the nature of the warranty, buyers and their agents needn't worry about the resale property value based on condition. This is all good news that is easy for a real estate professional to share with a home buyer considering new construction.
Short-term mindsets hardly ever yield tangible results down the road. So, even after the deal is closed and the home is finished, agents and builders don't go their separate ways. Instead, they remain involved after the sale, reaping the mutual benefits. For agents, a reliable builder who cultivates positive post-sale experiences (either through a solid warranty or otherwise) means more referrals and repeat success stories. And it's the same for builders who can rely on the agent to show future clients their inventory. This kind of long-term partnership is exactly the reason why real estate agents and new home builders should work together.
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