Realtors® and Home Builders: If You Knew a Sure-Fire Tactic to Generate More  Sales- Would You use it?

I’ve been teaching quite a bit of real estate continuing education of late and have noticed there is still a HUGE chasm between Realtors® and builders.

So here’s the questions…

How can Realtors® leverage builders to increase their business in 2010?

How can builders increase their co-op Realtor® sales?

Building relationships with Realtors® and builders is the fastest, easiest way to build your business. Here’s how to do it.

~Rick

Cracking the Realtor®/Builder Code

Every time I teach a real estate continuing education class I always ask this question…

“How many of you derive 5 – 15% of your income from representing buyers in new home sales?”

The statistics are pretty consistent…about 5%!

That means 95% of Realtors® AND builders are leaving money on the table.

Here’s what Realtors® are telling me about WHY they aren’t comfortable with builders…

1. They don’t trust builders. Either they’ve been burned by a client going directly to a builder or have heard a story about it in their office.
2. They don’t understand the building process. It’s hard to admit but Realtors® don’t feel comfortable working with builders because they don’t understand the process.
3. They don’t think of it. Most brokerages don’t have a training program that deals with buyer representation in new construction. Out of sight and out of mind.
4. They don’t want to wait to get paid. Would you? Let’s see…you can sell a used home and get paid in 45 days or wait 6 months to get paid for a build. Tough choice, isn’t it!
5. They don’t realize new homes are available in the area they’re showing homes. Most Realtors® don’t realize infill possibilities exist. Most aren’t aware of remodeling options and renovation financing either.

Now I’m sure there are more reasons but these are the top 5 I’m hearing on a consistent basis.

Builders Pay Attention

Because 85 – 95% of all transactions in any particular market are used- builders need Realtors® a lot more than Realtors® need builders.

Here’s the top mistakes I see builders making when it comes to working with Realtors®…

1. Paying the builders representative a higher commission if no outside Realtor® is involved. And how is this set up supposed to foster better cooperation?
2. Making the client registration process difficult. Have registration forms available at your model, office and on your website. Phone calls are just fine for temporary registrations too.
3. Relying on the MLS for your Realtor® business. Relationships, not showings will build your Realtor® business. Remember Mr. Builder, you need them more than they need you. You have to put your best foot forward to get these relationships going.
4. Treating the co-op fee as a commission. The 2-4% you pay out, Mr. Builder, is not a commission- it’s a marketing fee. The best news is you don’t pay a dime of it unless the sale is made.
   
5. Offering to take 2-4% off the price since the buyer doesn’t have a Realtor®. Look, I work in the trenches with my clients and I know how tight deals are today. But the minute you utter these words to your buyer and they get back to the Realtor® community- it’s the kiss of death. AND think about it- unless 100% of your sales are with cooperating Realtors®, you don’t have a 2-4% co-op fee built in on every sale.
   

“So herein lies our problem- Realtors® and builders keep traditional mind sets and no new business relationships are fostered. Well, is that good enough for you in 2010?”

Fresh Opportunities for the New Economy

Realtors® and Builders can’t continue the oil and water relationships of the past. Each needs a new avenue for business and both have something the other wants.

I’ve developed a list of “best practices” for Realtors® and builders. It’s called Cracking the Realtor®/Builder Code- 10 Sure-Fire Tactics to Jack up Your Sales.

This list is based on direct feedback from Realtors®, builders and builder sales representatives.

You can download it for absolutely FREE by clicking on this link>>

What about Your Thoughts?

Am I missing anything?

What are some of the successful relationships you have fostered with Realtors or builders?

We all have our horror stories of the past but that won’t help anyone grow their business today. I look forward to hearing what you think! Leave a comment below.

Happy Selling!

“Green is for Idiots!” Part II- The Green Marketing Answers Home Builders Have Been Looking For…

If you missed Part I of this article and are a bit “miffed” about my title, you can get caught up in about 3 minutes by clicking on this link.

Below you’ll find answers from actual HOME BUYERS- Not from any crack pot marketer or 3rd party Green designation theories…

~Rick

In my humble opinion, the National Association of Home Builder’s (NAHB) Institute of Residential Marketing (IRM) courses are the finest the association offers. To become a member of the IRM, you have to write a case study on the history of a residential development.

I submitted my case study back in 2006 and when I received the critique from the IRM- two comments stuck out in my mind…

1. “How could the developer run out of marketing money?” This was 2006 and the project was a bit “ahead of the curve.”

2. “The developer did a great job of selling lots to builders.”

Yes the project was now in foreclosure. Yes, besides only a few end users, the only owners in this project were builders.

This story reminds me a lot of how the Green movement within the housing industry is selling itself today. It’s doing a great job of selling to our own builder members but how good of a job does it do relating to home buyers?

Have most home builders and remodelers taken some sort of formal education regarding Green housing?

Answer: Yes!

Have many of these same companies attempted to provide a 3rd party certified Green home or project?

Answer: Yes!

Have these marketing and positioning strategies been consistently successful?

Answer: No!

Why?

In a 2008 National Association of Realtors (NAR) study of Home Buyers, recent home buyers were asked what is the “Importance of a Homes Environmentally Friendly Features?”

The answers are below and will tell you EXACTLY home you should be promoting Green…

To See the full report use this link>>

Using the above data you can see home buyers are VERY INTERESTED in one common theme- more money in their pocket through lower utility bills.

What’s the Lesson Here?

The lesson is the same as the builders in my case study learned…

It’s why you need to Segment Your Green marketing and identify what is important to your target market. You need to make it personal, make it real and most importantly- use it to differentiate your company from used homes.

Use this link to watch a video on how to segment Green and finally take the mystery out of selling it>>

Do you agree? Disagree? Think I’m clueless? Have a better idea?

Tell me what you think. Leave your comments below…

Happy Selling!