Build Your New Home Sales from a Little to a Lot

Happy couple receiving keys from Builder
Build Your New Home Sales from a Little to a Lot

Many Realtors sell a few new construction homes now and then. Some other Realtors sell dozens of these homes every year, year after year. If you’re in the low production group, how can you ramp up your sales — and commissions — from a few to a lot?

At the top of your to-do list should be acquiring the necessary expertise to sell new construction homes, says Dennis Walsh, CEO of Certified New Home Specialist, a real estate training company in Newport Beach, Calif.

Realtors who sell more of these homes “do what it takes to develop the education, understanding and nuances of the business, number one. Number two, they market themselves” as new home experts, Walsh says.

Buyers are “smart and sensitive,” he adds. “They can tell whether someone really has experience and confidence in their ability to support the customer and help them through the decision-making process.”

Build Relationships

That process might be as simple as purchasing a complete production home from a large-scale builder or as complex as identifying land, obtaining financing, hiring an architect and choosing a builder for a custom-built home.

Either way, a knowledgeable Realtor can help buyers identify options that might meet their needs and people who can help them make their dream home a reality.

“What are the opportunities if we go in this direction?” Walsh says. “Who are the builders we would work with? What is the process? It’s not a simple thing (for buyers) to outline.”

Places to start learning more include the local home builders association, municipal building, zoning departments and city planning commission.

Selling more new construction homes is all about “building relationships, going out into the marketplace and doing your best, using whatever resources you have to discover what type of development activity is going on. Who’s actively building homes? What are they building and where?” Walsh says.

Research Builders

Realtors should identify local builders in various price ranges and get familiar with the homes they build, says Bob Schultz, new home sales and management consultant at The International New Home Sales Specialist in Boca Raton, Fla. Specific local knowledge can help Realtors overcome any distrust or apprehension they might feel about working with the builder when a buyer shows an interest in the builder’s homes, he says.

“Go and meet them and learn about their reputation, financial stability and integrity,” Schultz suggests. “Find out everything about them that you would want to know if you were buying a home.”

Chosen Specialty

Tara Moore is a case in point. A Realtor with RE/MAX Select in Winter Garden, Fla., Moore says she sold about 20 new construction homes in 2015 and had eight more under contract to close in 2016 before the year had even started.

How did she do it?

“I intentionally made it a pretty big part of my business,” Moore explains. “I like the brand-new home, and I make it very known to my clients that that’s something that I specialize in.”

To learn the skills she needed, Moore completed a new home certification class offered through her local board of Realtors, visited new communities in the area and built relationships with builders’ sales representatives. She also walks through new model homes, keeps builders’ marketing materials on hand to offer buyers, and reviews blank builder contracts, which differ for each builder and typically are much longer than resale purchase agreements.

Realtors who sell more new construction homes “have made an intentional effort to become educated about the process and educate their buyers that it’s one of the options available to them,” Moore says.

Realtors who sell new construction also need to understand the sales cycle and be aware of when opportunities open up for buyers, says Ken Pozek, a Realtor with Keller Williams Realty in Northville, Mich.

The “absolute easiest” new construction home sale occurs immediately after the home’s structure has been dry walled, which most often happens between June and August, Pozek explains.

“Buyers can walk through the house, see the lot and how it is laying out, and all they need to do is pick out their granite and flooring and call it a day,” he says.

Cash Management

New home sales can take six months to a year to close, or longer in the luxury market, so Realtors who are successful must manage their business and cash flow well.

Moore says she took a financial management class offered through her church and is careful about her finances.

“I just got a $12,000 check,” she says. “I could put a down payment on a Mercedes, but that’s not smart. I could, but I won’t.”

Pozek says he didn’t sell any new construction homes three years ago and now such transactions make up perhaps 25 percent of his business. He uses the long wait to get paid as a counterbalance to the seasonality of his resale transactions.

When a new construction home sale closes, “it makes for a great month,” he says. “Those sales make the slow time of year great for me.”

About the author 

Marcie Geffner

Marcie Geffner is an award-winning freelance reporter, book editor and blogger whose work has been published by a long list of financial, mortgage and banking websites, trade magazines and newspapers. She holds a bachelor’s degree in English with high honors from UCLA and a master's degree in business administration (MBA) from Pepperdine University and has completed advanced novel-writing courses at the UCLA Extension Writers’ Program. She is a second-generation native and lifelong resident of Los Angeles.

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