SMC education panel discusses mutual benefits of cooperation.
A panel comprising real estate agents and homebuilders’ site agents had a message for a gathering of their peers: We’re all in this together.
Realtors Daniel Lewis and CC Underwood joined homebuilder representatives Victoria Hartwell and Jocylyne Corlew at the Sales and Marketing Council Education Panel on Jan. 25 at the Northeast Florida Builders Association office.
The four fielded questions from the audience and moderator Aaron Bacus of First Guarantee Mortgage Corp., largely focusing on the importance of mutually beneficial relationships, and how to achieve them.
Predictions and advice
Lewis began the discussion by saying as strong as home sales were last year, he expects an even better 2018.
“Yeah, we have an inventory shortage, but I think builders are picking up the slack,” he said.
Added Bacus, “Builders are where it’s at.”
It’s also where the site agents are, and Hartwell, sales and marketing manager with MasterCraft Builder Group, said there remains some slack to be pulled in order to reach the potential for builders and the Realtors who bring them customers.
“Prices are where they need to be, but the number of permits are behind where we think they need to be,” she said.
According to NEFBA, the number of building permits issued in 2017 in the four-county area is the highest since 2007 at 8,870. That’s just shy of half of the high of 17,753 permits pulled in 2005, and Bacus said he doesn’t see another housing bubble.
“What I see this time around is you have real borrowers putting real money down and tighter restrictions on the mortgages, so I am optimistic the bubble won’t be bursting on our heads,” said Bacus.
That’s good news for Realtors and builders alike, but Corlew and Hartwell said in order to take advantage of the favorable market conditions, Realtors should take the time to educate their clients on what to expect from the builders, and in return site agents must work to ensure buyers’ agents aren’t circumvented in the sales process.
“Do your homework ahead of time,” advised Hartwell. “Every buyer is going to be different and every agent will handle things differently. Feed off how the sales presentation is going and if you see something that needs to be spoken about with the buyer, go ahead and speak up. But when it comes to the presentation, let us handle it because we are the experts.”
Corlew, sales manager of ICI Homes, advised agents to brief their customers in advance about individual builders’ incentives, and the importance of making realistic offers.
Site agents typically are juggling multiple customers at one time and their attention could easily be turned away by those they don’t consider to be serious.
“It’s an instant turnoff when someone says, ‘Here’s our offer,’ and it’s $60,000 off the price of the home. We’re in the business to sell homes, but we’re not in the business to give away our homes.” Corlew said.
“We had an offer of $65,000 off the price plus a screened-in lanai plus a fenced back yard. We can’t do that. If you give your client the right information up front we can work together and make that transaction happen,” she said.
“If you educate your buyer just a little bit, I think you will find you can sell more homes with a builder,” Corlew said.
Conversely, buyers’ agents can be on a tight schedule, showing several homes in different neighborhoods in a day, Lewis said. It’s imperative that site agents respect their time as well.
“When I let them know up front we have this amount of time to spend and when a (site agent) doesn’t respect that and they try to steal more time, it gets me off schedule,” he said. “If a customer loves the house and wants to spend more time there, I will do that.”
Avoid sidestepping buyers agents
There is a misperception, Hartwell said, that buyers can pay less if they’re not working with a Realtor, even if they are.
Often potential buyers, who have worked with an agent previously, visit a model home on their own and do not indicate that prior relationship.
Not all builders take measures to prevent that, Lewis said, and some might even encourage it.
“There are a couple of practices by builders who want to incentivize the customer to not use a Realtor,” Lewis said.
“We’re all partners in this and we have relationships, so those types of practices, when I hear about them, I remember them. As the market gets stronger, I think some builders don’t always think they need that relationship as much. But it’s cyclical, so when the market gets tough again and you need Realtors to sell your product, this can create some challenges,” he said.
Both Corlew and Hartwell said their respective builders value that relationship and take extra steps to ensure, to the extent possible, that buyers’ agents are not left out of the process.
“We never want to burn those bridges because Realtors bring us 75 percent of our business,” said Hartwell.
“I have heard practices where Realtors were getting cut out. We have customers come in and say, ‘We’re not working with a Realtor, can you give us a better deal?’ We say, ‘absolutely not.’ If someone comes in with a card and says they are working with a Realtor, we will honor that,” she said.
Underwood said she recently experienced that level of cooperation firsthand with a builder.
“Two weeks ago, we had a buyer walk in to a community without us,” she said.
“We were with them the first time and they walked in the next time alone. We got a call from the site agent who said, ‘we want you to know we had your buyer walk in and sign a contract without you.’
“Of course, we sent them a big box of strawberries.”