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The Marketing-Driven Approach: Fostering Good Relationships with Builders Produces Results

Couple reviewing paperwork with Realtor
By demonstrating your value to homebuilders, you’ll become an invaluable resource for them and your clients. One way to do that is to use a marketing-driven approach.

With a steady supply of inventory from lots to spec homes, new homebuilders and developers are constantly looking for ways to drive sales. For real estate professionals, new construction offers access to a consistent sales channel. But there’s more to it than that.

By demonstrating your knowledge of the local market and a willingness to advocate for new construction, you also have the opportunity to become a go-to marketing expert for local builders — and, more important, to create potentially long-term and mutually beneficial relationships with the homebuilding community.

“Local real estate agents are an incredibly important resource for builders to connect with potential buyers, so we welcome the opportunity to educate agents about our communities and what we offer buyers,” said Brian Brunhofer, president of Deerfield, Ill.-based Meritus Homes.

Providing Value

In positioning yourself as a new-home advocate, it’s important to educate yourself about the homebuilding industry, including getting to know the builders in your area, particularly the ones that best fit your client profiles.

Doing your homework up front is one of most important steps you can take, said Andrew Kiener, a licensed Realtor and director of project sales at Kinzie Real Estate Group in Chicago.

“I encourage Realtors to contact a builder’s sales center before ever coming out with a client. Tour the community and become acquainted with the homes offered,” he says. “The Realtor community is a key marketing ally of builders. A well-educated builder’s representative will look at partnering with Realtors as a mutually beneficial opportunity.”

Brunhofer concurs, saying that most builders are happy to preview a community with an agent before they bring any clients on site. “This lets the agent get to know the builder and its sales team and starts to create a level of trust and understanding all around,” he says.

Another way you can provide extra value to builders — and to your clients — is to learn about the building process. You don’t have to reach general contractor level, but by understanding the overall process and time frame, you can better impart that information to clients and help soothe any fears about construction delays.

“If an agent isn’t already knowledgeable about the new-construction process, they should ask a local builder to walk them through the construction timeline, typical contract terms, the builder’s design process, product specifications and other information that will better prepare the agent to present new construction as an option to clients,” Brunhofer says.

Builders also appreciate — and invite — your knowledge of what buyers are looking for in design, floor plans, standard features, fixtures and so on.

“The Realtors we work with are terrific at knowing what buyers want,” says Jenna Jacobson, development manager and general counsel to S2 Development LLC in Washington, D.C. “They interact with many more buyers than we do, so they provide an invaluable service to us when they can advise us on what finishes to select and what amenities to provide.”

That feedback also serves as a bridge to continued contact with a builder or developer. By staying on top of what a builder has available in its communities, you can keep an eye on homes that might be right for other clients.

Co-Broker Commissions

By demonstrating your knowledge of the local market and a willingness to advocate for new construction, you also have the opportunity to become a go-to marketing expert for local builders.Most builders appreciate the extra marketing value you are providing by serving as a new-home advocate and many offer a co-broker commission to agents for bringing clients to them. When you meet with a builder prior to bringing clients by, that’s the best time to inquire about their commission policy, including any specific requirements or timeframes. As with any transaction, you should get everything formally documented to ensure you are properly compensated.

Typically, you register your client with a builder on your client’s first visit to establish that you brought the client to the builder and, thus, lock in the commission. But what if your client visits a community and lets you know after the fact? Most builders will work with you if you contact them as soon as possible after the client’s visit, but preventing that scenario in the first place is the best solution.

“It’s incumbent on Realtors to educate their clients on their role as agent and how that works,” Kiener says. “If your clients want to visit a community without you, make sure they know to acknowledge with the builder’s representative that they are working with you and that you are registering them on their behalf.”

Full-Service Experience

In most cases, you will interact with builders in the traditional buyer’s agent role; however, some builders may offer the opportunity to become a marketing and sales subcontractor for a particular community or project. Small builders or developers, like S2 Development LLC, view hiring real estate professionals on a contract basis as more cost-effective than keeping an in-house sales staff. S2 Development, which builds spec condominiums, hires Realtors to represent specific completed projects.

“Marketing for a project begins long before the completion date,” Jacobson says. “From websites to press interaction to the pre-market party, we look for Realtors who offer a full-service experience.

“The more that Realtors know about zoning, regulatory changes, building code and project finance, the better (an) advocate they can be (for builders and developers).”

At the end of the day, your goal and the builder’s goals are the same: to increase your sales and deliver a positive homebuying experience for the client. By working together, you and the builder can make those goals a reality.

About the author 

Judy Marchman

Judy L. Marchman is a freelance writer and editor who, during her 20-year career, has written on a diverse number of topics, from horses to lawyers to home building and design.

She currently writes for NewHomeSource, and, in a nod to her equestrian background, copyedits for Southern Racehorse magazine and The Horsemen’s Journal. Judy is also the proud owner of a newly built home and has gained plenty of story inspiration from her home ownership experiences.

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