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How to Tell If a Builder’s Serious About Working With You

Builder with Hardhat in Front of Construction Site

Sure you want to sell homes, but selling a new home from a reputable builder is just as important. The relationship between you and builders should be one of transparency and trust.

Whether you’re working with a local, regional or national residential builder, as a Realtor you should be looking for signs that your experience and integrity are valued.

The relationship between you and a builder should be one of transparency and trust — and of mutual recognition of the important role each of you plays in helping your buyers fulfill their desire for homeownership. According to the National Association of Realtors, 63 percent of new-home buyers purchased through a real estate agent in 2012.

While smaller builders may not have the capacity to show their appreciation for Realtors in the same way that a national builder can, Realtors and builders agree that frequent communication between the real estate community and builders is ideal.

“One of the most important things we do for Realtors is to show them that we value their time,” says Kira Sterling, chief marketing officer for Toll Brothers in Horsham, Pa. “We try to provide succinct communication with details about our offerings and train them about the advantages of new-home construction so they can become an expert in their own right.”

Does the Builder Communicate with Realtors?

Buyers’ agents want to feel welcome by builders, says Cindy Jez, vice president of the Richmond/Hampton Roads region of the New Homes Division of Long & Foster Real Estate in Richmond, Va.

“It’s in builders’ best interests to foster relationships with Realtors because we offer them an opportunity for repeat business,” says Jez. “Builders should use Realtors as their sphere of influence to promote their new communities and they should engage them by using social media to let them know about trends and new products.”

It’s helpful for Realtors to get information in advance about new sections opening in a development or a new model that’s about to open, says Raylene Lewis, a Realtor with Century 21 Beal in College Station, Texas.

“One local builder remodeled a spec house and brought in a group of Realtors so we could see it,” says Lewis. “The builder made a clear distinction between what was standard and what was an upgrade, so when we bring in buyers later we can sound knowledgeable.”

Kim Ambrose, vice president of marketing for Miller & Smith homebuilders in McLean, Va., says she sends email blasts specifically written for Realtors with the most up-to-date information on all their communities, including price changes, community amenities, new floorplans, advance notice of sections about to open for sale and updates on any immediate delivery homes.

The company keeps a database of Realtors who’ve worked with them in the past. In addition to email updates about available inventory, Sterling says Toll Brothers sends representatives to the weekly office meetings held at real estate brokerages to answer questions and present material about their latest developments. “We also arrange bus or shuttle tours of our homes so they can see everything we have to offer to their buyers,” says Sterling.

At Miller & Smith, Realtors who join a preview list for a development are invited to a “Big Reveal” preview party several days ahead and often bring their buyers. “We know that Realtors bring more qualified buyers with them and so we often offer special incentives for buyers at the preview party before the general public can see the model,” says Ambrose.

Jez recently attended a Realtors-only preview party held by East West Communities along with approximately 500 other local real estate agents. “Five hundred agents at the party equals 1,000 potential buyers on opening weekend,” she says.

Does the Builder Make Education a Priority?

The best thing builders can do to encourage Realtors to show their properties is to provide extensive background information to Realtors with a high level of detail, says Colleen Meloro, vice president of marketing for the New Homes Division of Weichert in Morris Plains, N.J.

In addition to educating Realtors about their communities and about the homebuilding process, Sterling says Toll Brothers sponsors continuing education events at various locations. “The Realtors can get their continuing education credits and we provide them with some food and a brief presentation about our communities,” she says.

Builders can educate Realtors so they can help their buyers understand the benefits of new construction, such as the use of current technology and designs, modern finishes and fixtures and the ability of buyers to customize their home, says Meloro.

How Does The Builder Establish Trust?

Lewis says that Realtors need to know that builders will live up to their promises and take good care of their clients. She says the best builders provide good customer service to their buyers even after settlement. For those who don’t, the relationship won’t last. Lewis says she stopped working with one local builder who wasn’t trustworthy and wouldn’t fix any of the problems buyers found after they had moved into their homes.

“I work hard to establish trust with my clients so they come back to me in five or six years when they want to buy another house,” says Lewis. “I want to have that same trust in a builder. A builder that takes care of issues right away and is responsive to my buyers is more likely to get return business.”

Builders who create a team atmosphere and who teach their sales professionals to make Realtors feel important while they’re onsite with a buyer encourage them to bring more buyers to their developments, says Jez. Personal phone calls to individual agents and office visits also help establish relationships between agents and builders.

“Agents become ambassadors for a builder if they’re made to feel part of the team,” says Jez. “Builders need to set realistic expectations upfront and stay in communication throughout the building process so it’s easier to resolve any issues.”

Each Toll Brothers sales person has the responsibility to establish personal contacts with Realtors in their area, says Sterling. “We’re not fair weather friends, either,” says Sterling. “We’ve been using this same approach with Realtors in good times and bad.”

Look For an Appropriate Commission

Success in real estate depends on building long-term relationships, but Realtors also need to earn a living. “Agents are usually the first to introduce a buyer to a property and the last to get paid,” says Jez.

She says builders must ensure that Realtors are compensated when they bring a buyer to a new home development.

Most builders have a process in place for Realtors to register a client and earn a commission. While some builders put their process on their website, others provide a printed document when Realtors arrive at a sales office. The policies vary from builder to builder, but one element that’s consistent is that the real estate agent must be licensed.

At Perry Homes in Texas, for example, licensed agents can register with their client’s information by phone before visiting the sales office or they can register in person. At New Castles Homes in Alabama, though, only in-person registrations are accepted. Realtors should check the rules with each builder to make sure they’ll receive an appropriate commission or referral fee.

At Toll Brothers, Sterling says the company pays commissions in advance to Realtors rather than wait for settlement and reimburses Realtors if they’ve had to pay a relocation fee for their buyers. “We do this in order to level the playing field between new homes and resale properties,” says Sterling. “We want a broader pool of prospects to whom we can show our offerings and Realtors bring them in.”

Lewis says builders should pay at least the same commission as the local market rate for resale commissions. Some builders offer bonus incentives to Realtors who sell several of their homes or sell an immediate delivery home. At some Toll Brothers communities, depending on local regulations, an escalating commission scale is established so that Realtors have the potential to earn more for multiple sales.

“I work harder to sell homes for builders when I believe in their product and their reputation from past experience and when they reliably pay my commission and offer a bonus for selling additional homes,” says Lewis. “It’s not just about cash though — it’s important that my buyers have had a good experience with the builder.”
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.

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