After decades selling new homes, Ben Caballero, CEO and broker of HomesUSA.com in Addison, Texas, has a few tips to share with real estate agents. But there’s another reason to listen to Caballero besides his experience: he’s the only real estate professional to hold a Guinness World Record for the “most annual home sales transactions by an individual sell side real estate agent.”
“One of the best reasons to get into selling new homes is that even in a tight market you won’t run out of inventory to sell,” says Caballero. “If there are no spec homes being built, a builder can build something for your client. One agent told me he switched entirely to selling new construction after a year of writing contracts and never getting paid because his clients kept losing in bidding wars.”
Caballero says that selling new homes is easier than selling existing homes because builders are eager to sell their product and make it as simple as possible.
“Most builders are scrupulous about paying commissions to buyer’s agents,” says Caballero. “You just have to be prepared to wait until the closing, which can take a little longer than with an existing home.”
Share the benefits of new homes with your clients
If your clients are among those looking at both new homes and existing homes, Caballero says it’s important for agents to understand the appeal of newly built residences.
While newly built homes cost a little more than existing homes, Caballero says you should explain to your buyers that they can live more comfortably and with a greater peace of mind in a new home. Not only is the home less likely to need repairs, builders include multiple warranties on various elements of the house for one or two years as well as a 10-year warranty on the structure.
“There’s a glamour to new homes because no one else has lived in them,” says Caballero, “They’ve got the latest design trends and color palettes, and are built with the newest materials and appliances. Most important, new homes are better quality because of the higher standards of building codes today. They’re more energy efficient and have better air quality.”
7 tips for selling new home
Caballero says agents need to educate themselves on the building process and on local builders in order to provide excellent service to their customers. Some of the tips he shares for agents include:
1. Foot work is the best way to learn about local builders. Visiting models and sales centers can be informative for agents not only about the quality and details of the homes for sale, but also about whether the builder is willing to work with agents, says Caballero.
“Ask the builder how long they have been in business, who their principals are, where they worked before and whether there’s anything in the contract that your clients should know about,” he said. “Your office manager and other agents should know the reputation of builders, too.”
2. Track builder timelines. Caballero recommends signing up for email alerts about inventory and promotions as well as tracking information in the local MLS. He says builder reps are thrilled to add agents to their database because it helps them sell houses.
3. Don’t have an adversarial attitude. “Understand that you and the builder’s rep are on the same side and you both want the sale to go through,” says Caballero. “Introduce your client to the builder’s rep and let that person do the selling of the product and explain what’s included in the base price.”
4. Consider the builder as a partner. If you have concerns about anything, Caballero suggests talking to the builder in private first rather than introducing stress in the transaction in front of your buyer. Ask the builder if there are issues, such as a construction delay, to contact you first so you can be the one to let your client known what’s happening.
5. Be prepared for a floating closing date. “Builders can’t tell you an exact date for when a house will be complete because they can’t control the weather, the inspection process, when materials will be delivered and their labor pool,” says Caballero. He says agents need to get used to the idea that the closing date won’t be set for several months.
6. Builders typically use their own contracts. Large companies especiallyneed to meet the requirements of their legal department, their investors and their contractors, says Caballero, so they rarely use the standard state purchase contract. Expect that if a new contract needs to be negotiated, the builder’s rep will write it rather than you.
7. Be prepared to use the builder’s recommended title company and lender. Although buyers have a choice, Caballero says the preferred companies are far more likely to ensure a smooth transaction. “If you go to another title company, that company will need extensive legal information from the builder that could delay delivery of the house,” says Caballero. “In addition, the preferred lender has an incentive to close the loan as soon as the house is finished.” Builders also often offer incentives to buyers for the use of a preferred lender and title company.
Knowledge about local builders and the building process is essential information that you can share with clients to build your reputation as the go-to agent for new construction. Taking the time to get to know builder representatives and to visit model homes can provide a big pay-off in client loyalty and referrals – even if you don’t reach the stellar heights of a world record in sales.
Michele Lerner is an award-winning freelance writer, editor and author who has been writing about real estate, personal finance and business topics for more than two decades.
She writes for regional, national and international publications in print and online for a variety of audiences including consumers, real estate investors, business owners and real estate professionals.
Her work has appeared in The Washington Post, The Washington Times, Urban Land magazine, NAREIT’s REIT magazine, National Real Estate Investor Magazine and online at Bankrate.com, HSH.com, The Motley Fool, DailyFinance.com, Insurance.com, Fox Business, MSN, Yahoo, Investopedia.com, MoneyCrashers.com, GetRichSlowly.com and in numerous state and local realtor association publications.