You can lead a horse to water, but you can’t make him drink. Unless you first make him thirsty. Which brings us to why homebuilders have so much trouble drawing larger numbers of real estate agents to their events, even when the builder agrees to pay huge commissions and do all the work.
Realtors® understand what is going on in their markets. They know Realtors® who are making huge commissions working with new homes and new condominium communities.
But the vast majority of the 1.3 million members of the National Association of Realtors® have no taste for working with new construction.
Studies show that Realtors® don’t want to wait for their presale commissions, they resist not being able to negotiate the price, and (opinion) they would not know how to find the right new home for a new home prospect if they had one.
So what is the solution to these concerns and fears? Offer training that teaches construction? Offer tours of construction sites? Lunch and learns?
Unfortunately, a major study commissioned by Builder Homesite Inc said that 63% of the 3002 Realtors® interviewed felt that builder training was ineffective. It did not say why.
Excuse me for asking, but why should homebuilders be teaching Realtors®? Should not Realtors® be teaching Realtors®? And, uh, why would a Realtor® need to know construction to introduce a new home prospect to the builder? What Realtors® need is a clean car and a GPS if they don’t know how to get to sales centers.
But wait, what would Realtors® teach Realtors®, especially when there is no thirst to do such a thing?
“He who controls the inventory, controls the market” was the baseline philosophy of the Multiple Listing System until 2012 when Realtor.com and BDX partnered to offer home builders something they wanted and needed for a long time- access to the MLS without having to list their new homes inventory. BDX provided the new homes inventory feed, and 28 MLS associations around the country now access the same feed.
At this point, something critical started to change the culture. Inventory access was available via the Internet to shoppers as well as Realtor® and buyers for both new homes and resales started contacting Realtors®.
A 2018 NAHB report showed that 38% of these shoppers (up from 35% in 2013) are undecided, meaning they will buy a new home or a resale. This forced the Realtor®, ready or not, to start serving the needs of new home shoppers in addition to resales, especially now that they have access to new Home inventory.
Homebuilders understood the ‘undecided’ market five years ago when the number reported was 46% and immediately targeted this market segment to convince resale shoppers to buy new homes.
Realtors® seem to understand the need for new homes training of some kind, but no one seems to be thirsty enough to take even a swig at meaningful new homes training. Those that do recommend learning construction and ‘stopping by some sales centers” it seems.
The “training” reality should be obvious.
The training needed is not about the builder
It is not about the builder’s homes
It is about the Realtor®.
Realtors® need a large bucket of myth-busting truth to help them overcome their wrong assumptions, negative thinking, and costly no-training approach to working with new home buyers, builders and onsite sales teams.
To understand the need is to understand why more Realtors® are not thirsty enough to attend builder events or get involved with new home shoppers.
Especially, when the builder is providing the one thing Realtors® need most: saleable inventory.
It’s a shame because from a practical standpoint, new homes are the easiest to sell and close. The builder provides the inventor Many production builders offer a service that recommends which homes to show, sets the appointment at the onsite sales center, and registers the prospect on the phone. Only a small percentage of Realtors® heard about this service, which has been around about 15 years.
More than 50 percent of the 244 completing a New Home Co-broker Academ Academy survey said they did not know that there is an important exception to the builder’s ever present ‘first time’ registration policy. Knowing how to resolve this one issue can be worth thousands in commission.
The deeper problem is the fact that the Realtor® community does not know for a fact what to train or how to train its agents. Nor is it a priority.
The solution: Provide an affordable online course with exam that any agent in any state can take that quells their resistance to sell new homes and creates a thirst to serve new home shoppers at the same level they serve resale prospects.