You’ve been working with ‘Bob the Buyer’ for a while now, but you’re not having any luck finding the right property. Then he pops the question:
“What about building?” 🤔
This article will explain how you can become an essential advocate for your buyer client should he decide to pursue this option.
First of all, let’s all agree that we REALTORS® like New Home Salespeople, about as much as we enjoy a swarm of giant murder hornets at a BBQ. 😡
This adversarial relationship is understandable. After all, you want what’s best for your client, while the New Home Salesperson wants what is best for the builder, and themselves.
In many cases, the New Home Salesperson makes less money when a REALTOR® is involved. It’s also easier for them to control the sales process without a knowledgeable agent asking difficult questions and bringing up the pesky truth about things.
Be aware that REALTOR® commissions can vary wildly, from generous to insulting. And, there may be arcane ‘Builder Rules’ designed to push you out of the picture, such as requiring that you pre-register your client before they ever enter a showhome.
“Oh, you didn’t pre-register your clients? No commission for you!”
Heed my advice:
Learn the ‘Builder Rules’ in your market area, and discuss them with your clients early on, just in case they decide to explore some showhomes. Be certain they understand the importance of having their own independent expert representation, rather than dealing directly with a sales shark. 🦈
Here are ten examples of expert advice you can provide before Bob signs a contract with a builder.
1. Ensure he understands the potential negatives, such as living in a noisy and dusty construction zone for the next X years.
2. Ensure he understands the extra costs that the builder may not cover, such as fencing, landscaping, window coverings, etc. You’ll need to confirm these things with each builder, independently. Don’t make any assumptions.
3. Read the spec sheet and figure out what is included and what is not included. Builders often advertise the “base” price, but that’s for the cheapest (worst) lot and basic (cheap) finishings. It’s not unusual for an upgraded home to cost 10%-20% more. 💰
4. Help Bob choose the best lot, taking into account grading issues (both front to back and side to side), as well as street “furniture” (utility/transformer boxes, streetlights, etc). Builders often “forget” to mention these details that the average buyer doesn’t think about. After all, their job is to sell ALL the lots, not just the good ones.
5. Advise on what improvements to include, and which items may be smarter to add afterward. For example, it’s probably cheaper to include an A/C rough-in, but the A/C unit itself is likely less costly to add later.
6. Think about what features could be important for future resale value. For example, in my market – even on a basic starter home – I would recommend a master ensuite, quartz counters in the kitchen, and 9-ft ceilings on both the main floor and basement. These are features that future entry-level buyers will want and expect, even if your buyer doesn’t care about them now,
7. Spending a bit more on appliances can make a big difference. For example, you can go from a loud dishwasher to a quiet one for a couple of hundred dollars.
8. Consider enlarging or adding more windows to the basement. This is a surprisingly inexpensive improvement, with a big pay-off.
9. Ensure you get a say in where the utilities and bathroom rough-in are located in the basement. I’ve seen builders locate the furnace in the basement’s dead-center, just because it was easier for the installer, and nobody told him otherwise.
10. Make sure Bob knows that builders are notoriously overly-optimistic when it comes to estimating construction times. Add an extra 2-3 months to be safe.
These are just a few examples of how you can add value as an expert advocate for your buyer. 😃
One last thing: We complain about builders and their arcane rules. But many times, they’ve got a legitimate beef with us, too. Like when the agent contributes ZERO to the process, and the only thing they care about is collecting a commission check.
If you want to be a knowledgeable advocate for future buyers, go and meet the builder representatives in their show homes and learn about their product. Ask for their input on what they consider to be smart upgrades, and which are the best lots. Invest some time in learning, even if you don’t have any new home buyers currently.
You’ll increase your knowledge, and you’ll lay the groundwork for a future mutually respectful business relationship.
Honey bees are so much nicer than giant murder hornets.
For more information on working with buyers, check out The Motivation Alignment Principle (MAP).
This article was inspired by module #5 – Working with Buyers – part of the Agent Skills Master’s Program.
If you like these tiny bits of straightforward advice, imagine what you could learn from 7½ hours of video, 14 workbooks, numerous simple business forms, and clear instructions on how to immediately incorporate what you’ve learned into your business.
The Master’s Program takes an average of 2-3 hours per week for 14 weeks. The cost? An eighth of a decent commission – $997 USD or $1250 CAD. I guarantee you’ll make back at least 50X that amount within six months of completing the course, even if you don’t do the homework.
“The best investment you can make is an investment in yourself… The more you learn, the more you’ll earn.” — Warren Buffett