New-construction sales offer both buyers and their agents financial advantages that many might not be aware of. Here are five of them.

The second half of 2019 has just launched! In many markets, inventory still remains low so competing offers are still a challenge for buyers.

While new-home sales plunged recently in the West and Northeast, they rose slightly in the South and Midwest.

Historically, the strong resale season is spring through late summer. For new-home sales, summer can be the slow season with sales stronger in the winter months.

Having been in general real estate since 1999, I transitioned over to new-home site sales from 2014 to 2017 to learn that side of the business; sales were often good in the first quarter, so I expected the summer to be phenomenal.

Imagine my panic when traffic to the model home trickled down to a handful of prospects each week, in the summer.

But there’s a rational reason behind this: Purchasers know that it takes time to build a home, so they often start the search during the second half of the year, researching and visiting communities and builders before they make a decision. They want to coordinate the sale of their current home and the closing of the new home in the spring, and they realize this will take several months.

With the decline of new-home sales in several regions of the country, builders are likely to offer incentives to move existing inventory and boost sales. This can provide a substantial savings to your buyer and boost your income with generous commissions and bonuses. Here are five more reasons to sell new construction:

1. Site agents are a good source of referrals

Site agents, whether they are employees of the builder or independent contractors, represent the builder’s product. They only get paid if they sell one of the builder’s homes.

So what happens if a buyer contracts on a home but has an existing home to sell? Someone has to list it!

The site agent is not allowed to sell resale homes and will often refer these listings to ensure that there are no hiccups on the sale of the new-construction home.

They will often recommend an agent that often sends buyers to their community. The better news is: They cannot receive a referral fee on the listing!

2. Homeowner’s insurance is often less expensive

Hazard (homeowner’s) insurance is often less expensive on new construction.

Insurance rates are based on many factors. The purchaser’s personal credit rating, proximity to a fire station and fire hydrant, as well as the components and materials used.

Energy-efficient features in a home matter now too, such as energy-star rated appliances, the types of windows, the HEERs rating of the home ventilation and air conditioning system, and the siding material. By contrast, a resale home may not meet current building code or pass the required four-point inspection.

Another area of concern for resale homes is prior claims on the home by previous owners, which are reported to C.L.U.E. This is the acronym for Comprehensive Loss & Underwriters Exchange. It is like the Carfax for homes. Prior claims stay with the home, not the claimant, so they affect the insurance rate for the new purchaser.

3. New construction often makes good financial sense for buyers

Builders often raise base pricing at pre-selected intervals to manage production and availability of labor and supplies. If a buyer commits to build a home in the first phase, or at least early in the development, they will often have equity at the closing table. This could lead to very positive reviews and testimonials for you, resulting in referrals.

4. Buyer’s agents save time

Most builders have their own contracts and addenda, and the site agent prepares it all. It is also the responsibility of the site agent to manage the entire transaction for the buyer, and simply keep you informed along the way.

New-home sales are less time-consuming for you during the transaction, allowing you to invest those hours back into prospecting for new business.

5. Agents are more likely to get a steady income

Incorporating new-construction sales into your business plan can help insulate against the typical roller coaster of income.

Because build times will differ, you can have multiple pending contracts for months into the future. While most builders pay at closing, some pay half or full commission at the time the slab is poured.

Are you inspired now to discuss new construction as an option during the buyer consultation? Challenge yourself for the second half of 2019 to offer new construction to each buyer prospect. You’ll becoming a raving fan, too!

How do you stay ahead in a changing market? Inman Connect Las Vegas — Featuring 250+ experts from across the industry sharing insight and tactics to navigate threat and seize opportunity in tomorrow’s real estate. Join over 4,000 top producers, brokers and industry leaders to network and discover what’s next, July 23-26 at the Aria Resort. Hurry! Tickets are going fast, register today!

Thinking of bringing your team? There are special onsite perks and discounts when you buy tickets together. Contact us to find out more.


Christine Williams, CRS, is a real estate instructor and coach with Accredited Real Estate Institute. Connect with her on LinkedIn.

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