New Construction Tips for Realtors


The main point of this blog is to better understand the value we bring to the table as Realtors and how to better serve the new construction sector of our business. With low inventory levels plaguing most markets and new construction operating as fast as they can build them, needless to say there’s a LOT of opportunity out there in the new construction sector.  If you make it a point to follow these tips, I’m very confident you’ll be able to secure more business as a result.

Please keep in mind that the real estate market is fluid by nature and constantly moving, so certain sales or negotiating trends do come and go as the supply vs demand fluctuates over time.  The important thing is to best understand your position at that particular time relative to the market, inventory, and the overall state of our local economy so you can best help guide your client into an informed real estate decision.

New Construction Sales in Real Estate…. Here we go!

Most builder contracts state something to the effect:

“Buyer acknowledges and understands that Seller’s New Home Consultant and Internet Sales Consultant are employees of Seller, are acting solely for the Seller’s interests, and are not acting in any representative capacity for Buyer.” Enough said!!!! Explain to the Buyer that the onsite agents work for the builder, not for them and in some cases, that onsite agent gets paid more money without an “outside realtor” present.

Know the On-Site Sales Reps:

Relationships truly do matter.  This is huge because they will keep you up to date on the latest inventory and deals.  Often times we get the benefit of the doubt when there’s a strong established working relationship, more lenient on pre-registrations too.  Sometimes you’ll get more direct answers, no fluff, and easier negotiations.  They can certainly help your business so you should have contacts in all new communities.

Know the Product:

Your overall market knowledge is key to earning buyer confidence and trust.  Know the communities, builders, floor plans, product/pricing, amenities, CDD, HOA fees, restrictions, etc.  The pros/cons of their locations are important too from a big picture perspective. The product knowledge is directly tied to the value you have to offer and helps the client make an informed decision by comparison.

    • Have a solid database of builder floor plans, memberships, and other community info or contacts.

Educate your Buyers:

Believe it or not, the average buyer don’t understand how our business works, especially when it comes to “buyer agent representation”.  Never assume!  You need to talk about how you can help both resales and new construction.  Make sure they understand that it’s essentially free representation because the seller or builder will pay the commissions.  Give them cards to bring with them in case they “walk in” without you or attend open houses.  They need to voice your working relationship but you also need to earn it.

  • Build the relationship and do not take shortcuts for a quick paycheck.  Just sending the client’s name to the builder doesn’t work in today’s environment.

The Registration Process:

Some builders require the agent to be with the client on the 1st visit to be included in the sale and seem to be stricter these days about it. Keep the builder copy of your pre-registration agreement signed with the builder.  Make sure you ask for a copy as they don’t always provide it.  Upload this into whatever cloud based contract management system you use & even put date on your calendar so you don’t let it expire!  The registration process might be the most important step up front because if you miss this step, you may be cut out of the deal all together.  We must communicate and explain the process to them.

  • Send an Email to the builder and the client documenting that you are representing the buyer and confirm the appointment time.

Someone Working for You:

At the end of the day your buyers need somebody pushing for them and help them better understand the immediate options so they can make an informed real estate decision.  The builder is one sided so they need you to help keep a balanced perspective. Some of the things we help the client navigate:

  • You will help them find the best community & location
  • You will help them capture any incentives the builders may be offering
  • You will help them find the best lot while always keeping resale value in mind
  • You will help them negotiate the best price and terms
  • You will help them with the sale of their home should they have a home to sell while coordinating the process with extreme care
  • You will be there for inspections and final walkthrough
  • You will help them shop “secondary services” such as mortgage, insurance, and title.

Cross Shop & Compare:

A builder isn’t going to send a buyer up the street to compare product between competing builders and they offer very little, if any, insight on resales.  We know commonly used incentives and how/where the builders are likely to negotiate.  We can literally save the buyer a good amount of money just being conscious of the market by comparison. We know how to leverage that knowledge into our negotiations with both the builders and their “affiliate vendors” such as mortgage and title who may be used in connection with a purchase.

  • Closing costs with the lender and title are negotiable too.  Have them shop 2 or 3 and go back to the “affiliate lender” to hold them accountable and honest to true fair market rate.  Compare the quotes/fees line by line to see where they differ.
  • Generally speaking, the first quote you get is not always the best deal you can walk away with.  Learn to push back a little for your clients…..within reason of course.  Check the “closing fee” charged by the escrow agent and compare competitors.

***Did you know lenders can charge any rate “within reason” of fair market?  Did you also know this could mean a deviation of 1/2 pt up to a full point!  Don’t be fooled by a 10k closing cost incentive only to get severely beat up on your rate and pay thousands in interest over the life of the loan.

Doesn’t cost the buyer $$$ and buyer won’t get a “better deal” without you:

Most buyers are not aware that you can help them free of charge because the builder is the one paying all commissions.  Furthermore, a common misconception is that buyer will get a better deal without using you as their realtor… that is false in most cases.  So why not use a Realtor? If anything, we save them money because we generally know where discounts can be applied, have experience with negotiations, and stay dialed in to the supply/demands of our local market.

Design Selection and Walk Through:

Often times us agents become a 2nd pair of eyes for things such as your final walkthrough or choosing options at the design center.  We see lots of homes and decor so clients learn to value our opinion.  It can be stressful for them and overwhelming, so to have somebody with experience and ideas can make it a much smoother overall experience.  We have reputable inspectors or interior designers that can provide even further insight.

    • The notorious “blue tape” walkthrough is a great time to showcase your knowledge with the building process.

Other Tips or Thoughts to Consider and Keep in Mind:

  • Generally, there isn’t as much flex on the brand new (to be built) homes although it does happen here and there.  Perhaps a discount on the lot, closing cost credits, or a free pool upgrades up to 40k is a big one we’ve seen.  20k allowance upgrades for the design center.  Generally there’s always some sort of promotion in place but the key is knowing that’s not where the savings can end.  🙂
  • The ready to go or soon to be ready “inventory” homes are the most negotiable because they are done and the builder is carrying them.  They are motivated to get them off the books and will have the most room on price.  The longer it sits the more it’s negotiable.
  • A lot of these builders are publicly traded companies so pay attention to the end of a fiscal quarter or year when they love to sweeten the pot in order to get more inventory off the books and write new contracts.  They want to boost their earnings reports for investors of course so expect some deals to be had around this time.
  • Don’t push too hard until the buyer is ready to leave a deposit check because the builder is more likely to accommodate certain demands knowing your that close to making a decision.  Only when you’re evidently “ready to go” is often times when the builder will put their best foot forward.

Ultimately, it comes down to what VALUE do you provide or why do buyers need to work with you?  If you can comfortably and confidently answer that question, I’m certain you will see the direct correlation in your closed sales.

Happy selling everyone!

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