8 ways homebuilders alienate agents
To build co-broker networks, appeal to agents' best interests
By David Fletcher, Wednesday, May 9, 2012.
Frustrated woman image via Shutterstock.Editor's note: This column has been updated to correct an error introduced in editing. Truth 2 should have read, "We don't need to know how to sell new homes," not, "We know how to sell new homes," as originally published.
Today we take a hard look at how homebuilders market to general real estate agents, and why for years their aggressive co-broker marketing has been sending the wrong messages. Apologies to the new homes marketing consultants out there, including me.
According to many reports (verify with your local homebuilders), about seven out of 10 new homes sold today are brokered -- the term used to identify a broker prospect -- as opposed to a "walk in."
Unfortunately, according to new-home blogs, less than 5 percent of Realtors show new homes. My experience tells me this is probably close.
Homebuilders continue to stabilize their commission and prospect registration policies, build products that compete with short sales, and have closable inventory for sale. But some general agents still remember some misunderstanding with a homebuilder that happened years ago, and they continue to share it with anyone who will listen.
The truth is, the solution is right in front of our noses, and we have not seen it.
Disagree with me if you wish, as I present the following eight truths as seen through the eyes of general real estate agents.
Truth 1: Homebuilders treat agents like spoiled children.
Homebuilders write the contract, provide transaction management and, in 2011, started setting appointments for our prospects. But it has not helped grow their co-broker networks.
Homebuilders should talk to agents in terms of the agents' interests, not their own. Meet us at our point of need. Our need is not to sell your home. We need to sell a home. As you share your location story, remember that agents need to hear it too. It will help us answer location questions our prospects may ask, and make us better at selling the property.
Truth 2: We don't need to know how to sell new homes.
We do not sell new homes. Your on-site agents do. We do not even show new homes. We introduce our prospects to you, and you do the rest. At least that is what you tell us.
You might want to rethink your message on this one. Help us understand that we will sell more resales and get more listings if we show new homes. That is what we do. It goes without writing that we will show more new homes if we do not have to learn a new skill.
Truth 3: Selling a new home is not the easiest sale in real estate.
Agents are insulted when homebuilders tell them selling a new home is the easiest sale in real estate. Having to follow up with the prospect plus your on-site agent gets complicated and confusing. We get into way too many "he said, she said" disagreements with third-party involvement. So be a little more sensitive here. As you can imagine, working outside of our system while not understanding yours is stressful.
Also, you know we are going to show resales. Quit fighting us on this issue, and you will see us show up more often at your office.
Truth 4: Knowing "construction" will not make us better new-home co-brokers.
Homebuilders need to know construction. Agents don't. Agents need a clean car, a qualified prospect, your address and a GPS, just in case. What else do I need to bring a prospect to your sales center? You want to keep us away in droves? Keep beating the "construction" drum.
I come out of a sales and marketing background. I don't know construction and don't enjoy being around it. I cannot imagine a general agent with even good knowledge of construction who would not prefer that the builder answer their prospect's construction-related questions.
Truth 5: You care only about selling your own homes.
Agents get the part about homebuilders wanting to sell their own homes, but that's a short-sighted view. If you want to build a productive, loyal co-broker network, understand that agents must make resales and get listings. Start caring.
Offer to train general agents how to show a model. Explain the psychology of what you do and say, and where you stand and why. It will make agents better listing agents for the seller to know they have been trained by new-home agents. But more than that, it will make you a co-broker friend like no other.
Truth 6: It's OK if agents rush through your sales center.
Many times agents rush through models with prospects because they have a relocation prospect in tow who has not accepted the position offered. Part of the agent's job is to help the company help the prospect accept the position. Their first priority is to show the "big picture" of homes available on the side of town where the prospect may work or want to live. A little understanding would go a long way with this one.
Truth 7: Your message does not appeal to top producers.
Top producers make every minute count. They already know about you, your community and your commission policy. They get your invitations. Show them how they can make more money faster by coming to your event, and they will be the first to respond.
Hint: It is not about your new models. It is about helping them list and sell a home, any home.
The message needs changing. It is not about you. The next time you have a broker luncheon, try adding a "We are going to show you our models, and give you three ways we help you make more sales and get more listings."
Truth 8: You need us.
At no time in history have homebuilders and general agents needed each other more than they do today. This is the most important truth of all.
David Fletcher, a licensed real estate broker and lifetime achiever, is founder of EMentoru, a company dedicated to helping real estate agents and homebuilders help each other make sales. Contact him by phone or text at 407- 234-2349, or by email at davidf@ementoru.com.
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Submitted by Kim Clinton on May 9, 2012 - 11:49am.
Great article! Wish the majority of the new home building industry would read this.
Submitted by Cameron Jackson on May 10, 2012 - 7:58am.
Good article. I agree wholeheartedly with most of it, except "truth" #4. I think it's ignorant and elitist to suggest that a Broker/General Agent doesn't need to know anything about construction when selling a new home. This after all is the reason to sell a NEW home vs. a USED home. A new home typcially costs more than a comparably sized used home, and for good reason. A general agent should understand how to talk about the "why" with their buyer as it relates to construction. The way homes are constructed today is substantially more energy efficient than even 5 years ago, plus you get the added benefits of better indoor air quality (health benefits) and state of the art technology in the way the home is constructed. I'm not suggesting that an outside broker/agent needs to be an expert in construction (that IS the builder's job after all as you say) but a high level understanding of the features/benefits and construction differences of a new vs. used home will go a long way in helping your buyer understand the difference and the value propositin and help YOU make the sale. If you're going to take the time to show them a new home, then you might as well know what you're selling. You'll appear competent in the eyes of your buyer, and you'll form lasting partnerships with builders and their onsite agents if they see you as an ally vs. a 3rd party to the transaction who also must be convinced.
Submitted by Mary Beth Brennan on May 10, 2012 - 10:10am.
Wow what a great post! I have been trained to sell new homes and participated in the Street of Dreams many years. Spent $400 on a CNHS designation that does me no good. Drop your client off and have a nice day isn't my style. I am a relationship builder. I like my clients to know that I worked hard for them.
I would like to be recognized as a professional that provides a service not a lead generating tool.
"Call Mary Beth"
Keller Williams
1921 Lohmans Crossing
Austin, TX 78734
www.callmarybeth.com
Submitted by Alisha Alway Braatz on May 10, 2012 - 11:13am.
HI!
Usually don't respond to posts...but this one hit a bit too close to home and sounded uh, very extra realtory.
What do I mean?
Coming from the home building industry I see a number of problems with this post.
1. There is a huge difference between a national and localized home builder. This distinction must be made. It's akin to Walmart v. an upscale boutique. If you want to say that National Building chains often put uneducated sales agents between you and your client, fine-- I've seen it happen. But this is such a generalized statement, it's almost offensive to the building community.
2. WHY? Well, because of the RISK factor. If you are still in business as a local builder, you are having a heck of a time finding financing. NO MATTER WHO YOU ARE. And you deserve a gold medal for still being in business. That means you are doing something extra right. All the risk of a new home (spec) lies on the back of the homebuilder--not the agent. So, yes, agents DO get treated like children because they NEVER feel the pressure like the builder does. Also, as so aptly described in #4-- agents DON'T care about what they are selling. Which is SO SAD. Is there any other industry in which the sales agent knows less and actually doesn't care about knowing their product? Yikes. What a statement. It's all about the commission.
I will beat the drum until it falls apart: New homes are worth knowing about. The energy saving aspects of a new home v. a resale can be astounding money-wise. Your clients deserve to know how a home is engineered and we as agents should feel compelled to understand the basics of what we are selling.
Submitted by Holly McKie on May 10, 2012 - 12:05pm.
I'm also from building industry and while Alisha makes some good points, my reaction to the post was ABSOLUTELY positive.
The message that really resonated for me was that builders need to give their customers (here it is general agents) something that they truly value. Not what is assumed they value.
Builders have been using the same approach for years & only about 5% of agents show new homes? That's not working. David has given some great perspective here in my opinion. Thanks.
Submitted by Daniel Levitan on May 10, 2012 - 12:39pm.
Sorry to disagree but the issues to which you refer between Realtors and Builders are so 1980s and both groups have a come a long way since then in understanding the benefits of working together.
I would like to think that a course created by the National Association of Ho,me Builders' Sales and Marketing Council which I was pleased to author, "Increased Profits Through Effective Builder Broker Cooperation", was helpful in creating a better understanding by all parties of the other side's position and how cooperation between Realtors and Builders is an absolute "win-win".
www.residentialmarketingblog.com
Submitted by David Fletcher on May 10, 2012 - 2:31pm.
This good stuff! Thank all of you for writing. It is going to take a while, but my overriding operating principle is that general agents will sell more new homes if they learn how to use a new homes "showing" to give their resale 'showings' a benchmark from which the prospect can evaluate both resales and a new homes purchase. I know it is true.
In the spirit of generating open discussion, I will be posting my agreement or disagreements with you if I feel so led.
My next column deals with what general agents need to do to clean up their ranks.
So stay tuned!
Submitted by David Fletcher on May 10, 2012 - 3:12pm.
Alisha, I did not say or infer this,becasue I don't believe it. Some of the sharpest sales agents in real estate are onsite consultants.
"If you want to say that National Building chains often put uneducated sales agents between you and your client, fine-- I've seen it happen. But this is such a generalized statement, it's almost offensive to the building community.
Please copy and paste what you are referring to, because if it is misunderstood, that is my fault.
Submitted by David Fletcher on May 10, 2012 - 3:15pm.
Dan, you are one of the most if not the most respected new homes professionals in the industry. I would appreciate knowing what you are specifically referring to. I am totally open to being corrected if proven wrong.
Remember, I am coming 100 percent from a broker's standpoint, not a marketing consultant's or a sales trainer's.
Just the other day I took a couple to look at new homes communities, seven in two days. I know the builders have changed, and said so. The real estate community, not so much.
Submitted by David Fletcher on May 10, 2012 - 4:48pm.
Cameron, thanks for your comments. I agree that the more an agent knows about a new home, the better. But the issue is a marketing one, and one I believe the industry should debate and decide.
Do you want to make it easy for the general agent to bring their ready, willing and buyers to your sales office without knowing construction, or not.
Brokers and resale buyers depend on home inspectors for construction related matters. Why should they have to know construction when they bring a prospect to an office full of people who do?
Just asking?
Submitted by Matt Sicignano on May 10, 2012 - 5:27pm.
Very well done! And that's not what I was going to say when I first read the post! Coming from a new home sales background I was getting very defensive.....but I forced myself to look at your comments with an open mind. I'm glad I did-while some of your points may have another side-there's enough truths to all of them to be carefully considered in these changing times.
Submitted by David Fletcher on May 10, 2012 - 6:03pm.
Matt, thank you for willingness to view the post with an open mind. That is all I can ask, and that is all you can expect cobroker prospects to do when touring your new homes. We will be working on that, I promise you.