If you’re tired of losing out on multiple offers situations, then now is a great time to discover how much easier it is to sell new homes — especially when you consider that working with a homebuilder eliminates many of the struggles buyer’s agents face in hot markets today.
Tapping into the builder market is one of the fastest ways to increase your bottom line — but there are a few crucial differences that agents need to understand about selling new versus existing homes.
Once you know these differences, you’ll likely gain a competitive advantage in your market because many buyer’s agents do not know how to work effectively with builders.
First, if builders don’t have inventory, they can build it. Builders are adding new inventory in your market every day and creating opportunities for you to increase your volume and your profitability.
Second, builders are business people who share your goal of selling homes. Unlike existing home sales, you are not having to deal with emotional sellers with life-long memories attached to their homes.
Builders are motivated sellers who need to move their inventory, and that means less headache (and heartache) for everyone involved.
5 tips for working with homebuilders
Here are five tips on how to work successfully with builders and boost your business:
1. Builders’ contracts are different for a reason
The standard forms created by Realtor associations or state bar associations are not designed for volume builders. Builders use their own money to build homes, and that means they can suffer a significant loss when a buyer doesn’t close a sale.
And because builders construct different types of homes in different municipal areas, their contracts must comply with constraints imposed by local regulators, building codes, city inspectors, lenders, restrictive covenants, developers and others.
2. Specific closing dates are not possible
Unlike an existing home, closing dates depend on the completion of the home, and completion depends on a number of variables that builders do not control.
Weather, inspections, vandalism, accidents, labor availability and material deliveries are some of these.
Agents must understand this and educate their buyers about these differences.
3. Building mutual trust is essential
Builders are business people like you. Your dealings with builders will go smoother when you take the time to get to know them and to understand their business.
Visit a builder’s sales center and introduce yourself. Get to know the builder reps and view the homes. Ask about their sales process, their warranty and if they have a preferred lender or title company.
The more you know about each other, the less likely there is for a potential misunderstanding and the better job you can do for your buyer.
If you can’t develop trust, then don’t work with the builder, as it will not benefit you or your buyers.
4. Builder representatives do much of the work agents typically do
Understand that builders handle many aspects that agents typically do for an existing home sale. This means the transaction management process is much simpler, but only when agents let the builder representatives do their job.
Be flexible: don’t try to impose on a new-home sale the same process you use for an existing-home sale.
5. Builders are not your adversaries
Builders have detailed knowledge of their product — including the warranty, the materials and available options and upgrades and the history of the subdivision. Leverage this expertise.
Smart buyer’s agents make every effort to avoid controversy in a transaction because they know it makes their buyers extremely nervous, and that can cost them a sale.
Buying a home is already a highly emotional process and keeping an even keel is crucial, especially if something unplanned occurs.
If an issue arises, discuss it with the builder rep privately, get a good handle on the issue so when you and your client meet with the builder, you won’t ask unnecessary questions that could contribute to your client’s stress.
Your client is buying a home for his or her family and spending a lot of money to do so. As their representative, you should do all in your power to make the experience as pleasant as possible.
Real estate agents are often looking for new ways to differentiate what they offer versus their competitors. Working with builders can be a great differentiator.
It’s also a terrific market for an agent to become an expert, as new-home sales transactions typically offer less hassles than an existing home sale and certainly less competition from other buyer’s agents.
All it takes is a little bit of time for an agent to understand builders — why they do what they do — to reap the rewards the new-home market can deliver.
Ben Caballero is the president of Texas-based HomesUSA.com and America’s No. 1 Realtor for the past five years.