How to Register Your Buyer with a Builder

Happy estate agent showing new home keys to a young couple after a discussion on house plans.
Registering your home buyer with the builder is a key step in the process of working with a home builder.

Know how (and when) to register your buyer with a builder.

Thanks to the Internet and home builder websites, knowing how to register your prospect (and yourself as the broker) online or at the builder’s model home and sales center cannot be easier, clearer or move convenient.

The time your interest will be most heightened will be when you know you have a new home showing coming up, and you are searching the Internet for new homes inventory or you are visiting new homes model centers to include on your showing schedule.

Before we review and  comment on a typical registration policy and form, I need to pull something from my 30 years in the new homes sales business as a general agent and real estate broker:

You are a commission sales agent. You get paid if there is a financial closing. My definition of a good ‘closer’ is one who knows what to do, how to act, and what to say to help their clients move from ‘looking’ to closing.

I bring this up for one reason: Do not, under any condition, listen to the “old pro’s” who remember when a builder did not pay a commission to an agent.  These tend to be agents who are not selling much and have not kept up with technology.

I have heard this many times, and have looked into it many times. In the vast majority of cases,the agent was trying to hustle an undeserved commission.

How? By claiming they gave the buyer their business card and told them to shop the builder’s models. Or the one where the agent ‘educated the prospect’ over a two-week period by “taking them by the builder’s entrance” every day to show resales.

The buyer eventually went into the builder’s sales office and bought a new home without the Realtor,who could have, should have wheeled in to the builder’s parking lot and let the prospect see the new homes, or at least asked if the buyer would like to see them.

To be intellectually honest, most of the commission issues come from a handful of small volume builders, the backbone of the building industry, who are the first to criticize agents for not knowing construction, which again, thanks to the Internet is a need no longer, if it ever was.

It is safe to say, without proof, that most if not all production builders have an aggressive co-broker program in place today with, proven and workable co-broker policies.

Many have their co-broker policy posted on their websites. Google “co-broker policy” and see what you get.

Below is a sample of what a good cobroker policy looks like. It was copied from a builder’s website. The name of the actual homebuilder has been replaced with the name ‘homebuilder’ for privacy purposes, but it a typical registration policy. Notice that there are two ways to register your prospect: In the sales office and online.

My comments are in italics.

Sales Office Registration – The real estate agent may accompany and register the prospective buyer on the prospective buyer’s first visit to the community.

May accompany? Does this mean a telephone registration to the onsite agent will suffice? Does it mean the homebuilder’s internet advisor MAY set the appointment?

Many registration policies will say “MUST,” and not “MAY.”

Sales Office Registration – Valid for 30 days. After 30 days, the prospective buyer must be re-registered.

This is a variable. Some builders will protect your commission if the prospects buy any time in the future, whether you re-registered them or not. It does not make this policy right or wrong. Does this mean you have to ‘re-register’ by bringing them back to the sales office? Usually email or a telephone call to the sale agent will do. The intent of this policy is to encourage you to keep in touch with your prospect.

Online Pre-Registration – The real estate agent may pre-register the prospective buyer atbuilder’s Sales Office prior to the prospective buyer’s first visit to the community and must accompany the prospective buyer to the community within 48 hours of the prospective buyer’s first visit.

This allows you to share with your prospect the name and location of prospects you are now with or expect to visit your area within the next 48 hours. If the prospects are registered with the builder and happen to visit the builder before you have a chance to take them to the builder’s office, you are protected as long as another broker doesn’t become the procuring cause of the purchase, as defined below.

Homebuilder will pay a commission, per the terms of the Purchase Agreement, following close of escrow.

If the prospective buyer returns to the community with another real estate agent and enters into a purchase agreement, this registration will be null and void and ONLY the accompanying real estate agent, at the time of contract, will be paid a commission.

At first glance this may seem harsh, but it is no different than a resale or FSBO resale.

The real estate agent represents prospective buyer as Buyer Broker and does not represent Homebuilder.

The information on this form must be legible and accurate in order to be a valid registration.

Agent must hold an active real estate license.

No comment needed.

Here is a scenario that creates needless angst if homebuilders don’t address this issue in their registration policy, because it is such a common occurrence.

What if you have a prospect who wants to see new homes built by Builder A and who registered with the builder online before you, the agent met them?  This will become more common as more prospects shop new homes online.

The best way to answer that question is to contact the onsite agent and ask them. In most, if not all cases, they will make exceptions or apply a policy in your favor if you are sitting in your office with the prospect and asked a simple question like this one.

“I have a prospect I am about to take out to see new homes. They tell me they have registered with you. Unfortunately, I am not familiar with your co-broker policy. Will my commission be protected? Should I bring them to your community or should I take your homes off of my showing schedule?”

Most of the time, if not all of the time, you will be protected if you are the procuring cause of the contract.

If you have questions, be sure to discuss them with the builder’s onsite sales consultant. I can assure you from personal experience that onsite agents are your greatest advocates, and have saved many a commission for their much needed co-brokers.

About the author 

David Fletcher

Broker and Lifetime Achiever David Fletcher teaches general real estate agents how to become new-home professionals, based on how he listed and sold more than $3 billion in new construction over his 30-year career.

Along the way, he has been a featured speaker for the National Association of Realtors and chaired the Sales and Marketing Council for the Florida Home Builders Association.

He writes for “agents on the ground” from his experience with working with home builders and new home co-brokers and is considered a thought leader in the industry.

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