Editor’s note: This column has been updated to correct an error introduced in editing. BuildersUpdate.com allows homebuyers to search for new homes using agents’ websites. Homebuyers cannot conduct new home searches directly from BuildersUpdate.com.
That elephant in the homebuilders’ sales office — prospect registration — has left the building.
BuildersUpdate.com has chased him off with its electronic registration technology, adding what the company considers to be a better new-home search tool in the process.
Based in Austin, Texas, BuildersUpdate.com is a Web-based search engine for agents that includes a feature that allows homebuyers to use participating agents’ websites to search for new homes.
Having launched its homebuyer portal in September, last month BuildersUpdate.com rolled out a new prospect registration system the company claims will "revolutionize Realtor-builder relationships and change the way real estate agents practice real estate."
Over a three-hour lunch, BuildersUpdate.com CEO Bill Gaul explained the thinking behind such claims.
"We need to be clear that this is not a new-home technology for homebuilders," Gaul said. "Our mission is to make our technology work for real estate agents, because if it works for them, it will work for homebuilders."
Gaul, a West Point graduate and Internet entrepreneur, said BuildersUpdate.com has conducted research demonstrating that agents want to show new homes. But agents find it’s harder to scope out new-home inventory than resales.
Resales are almost always marketed through the multiple listing service (MLS). Homebuilders do not typically put their entire inventory in the MLS, nor is it up-to-date with complete information.
But even if new homes are listed in the MLS, agents are not sure how the builders’ prospect registration works.
"There are serious issues involving trust that homebuilders cannot solve," Gaul said.
General real estate agents sold 63 percent of all new homes sold in 2012, according to the National Association of Realtors’ Profile of Home Buyers and Sellers. There is no quantified study available, but it’s thought that less than 5 percent of Realtors show new homes as part of their inventory-showing schedule. Based my experience, it might be more like 2 percent.
BuildersUpdate.com’s solution to getting more agents to show new homes is for the agents themselves to take a role in marketing them, providing information on available new homes inventory directly from their websites to their ready, willing and able prospects.
"The challenge was to how to protect the real estate agent’s commission in the process," Gaul said.
Homebuilders can reach out to real estate agents by providing services, events, bonuses, encouragement, training, and, now, setting appointments for agents’ prospects.
Here are problems homebuilders have faced in the past, and the innovations BuildersUpdate.com has introduced to solve them. Without the third solution, the other two wouldn’t matter. With it, the first two become sales technology imperatives.
1. Problem: Agents cannot offer new-home inventory on their websites because their commission cannot be protected.
Solution: Agents can now offer new-home inventory and floor plans from their website with no additional effort. Builder’s name and contact information and an MLS-type detail sheet are provided to the prospect only after the prospect agrees to use that specific real estate agent offering up the information to them. Prospects not represented by a real estate agent are offered the opportunity to have an agent assigned to them.
2. Problem: Agents cannot shop new homes by narrow and self-defined boundaries.
Solution: Agents can now use map technology to shop within self-defined boundaries.
3. Problem: Prospect registration can be confusing, inconsistent and generate a climate of doubt regarding the homebuilder’s commission policy.
Solution: electronic prospect registration initiated by the agent, approved by the builder in real time, recorded with a date and time stamp, attached to the reservation.
Electronic prospect registration portends to deliver registration clarity and confidence. It gives the agent much needed control of the prospect and the home builders the opportunity for thoughtful acceptance or rejection of the prospect registration.
"If agents perceive that the commission could become an issue, due to prospect registration conflicts, agents will not participate with that builder, or, for that matter, ‘builders’ in general, if they can help it," Gaul said, regardless of the technology available.
"On the other hand, builders need to know they are working with real prospects. The fact that the prospect is willing to work with a Realtor is a good indication that the prospect is seriously looking for a home, be it resale or new," Gaul said.
"We are not concerned with the number of ‘hits’ on our site. You will not see advertising or other distracting images," he said. "Rather, we are focused on delivering good prospects to the homebuilder working through a network of real estate agents from around the country and the world for that matter, and the agent is paid if the prospect purchases a new home from that builder."
BuildersUpdate.com COO Lee Goldstein said the company designed the patent-pending system to work with the builder’s current policies and procedures, giving them final word on how long preregistration lasts.
"Preregistration acceptance by the homebuilder protects the agent until he/she can bring the client to the model, in case the prospect walks into a sales office before the agent has a chance to introduce them personally at the sales office," Goldstein said.
Real estate agents register with Builders Update at no cost. Builders pay a registration fee based on the number of subdivisions that are involved.
"We feel we have a trust-based system that delivers every feature that agents told us they needed to become truly involved with new homes … to help those agents bring homebuilders a lot of business," Gaul said.