RISMEDIA, September 8, 2009—Changing times call for changing strategies. Some practitioners have attempted short sales, REOs, mortgage modification, and foreclosure prevention seeking to gain an advantage in a market with limited opportunity.
A few have developed good connections that feed them the REOs, but the other avenues have proven to be largely an expensive waste of time and money.
Banks, which had no foreclosures to speak of for several years, still do not have the trained personnel in place to deal with the unprecedented level of default.
Lenders can take six to nine months to respond to short sale offers because there are often additional loans that far exceed the offer price, and these people have no reason to cooperate with the sale.
To date, there has been way more money made training others to do mortgage modification, short sales, and REOs than there has been actually performing the functions.
A Missed Opportunity
One source of business that many practitioners do not consider is new construction. Fueled in part by the misperception that new home and resale practitioners are in competition and partly by years of builders advertising “no brokers,” the potential business swirling around new construction often goes unnoticed.
If you are looking to jump start or reignite your career, look no further than the builders in your market. Whether it is a single spec home or a large master planned community, the effort to sell it and the interest that generates will attract a steady stream of curious individuals, most of whom will buy something else, and have a property to sell.
Immediate and Future Listings and Buyers
Many serious buyers begin their home search by visiting new home sub- divisions. New homes are generally easier to access because they maintain regular sales office hours and no appointment is needed. Here, buyers begin to get an idea of not only the market place, but the process as well. And, most buyers will visit at least one new home community at some time in their search.
Here, you will find move-up buyers out seeking bargains. Higher end, new construction is offering some once-in-a-lifetime opportunities for those who have cash or substantial equity in a home they are selling.
A balanced business is one that has both listings and buyers and immediate, as well as long term clients. These are all to be found swarming around new home sub-divisions.
Every time I see a house in the framing stage, I always think about the first time it will resell. Growing family, job promotion, transfer, illness, divorce, something will occur in the lives of those first owners to cause them to move. But, when?
In the case of larger subdivisions, the answer is soon. Within a few months, the first resale will come to market. This first listing can be the gateway to most, if not virtually all, subsequent listings in the sub-division if it is marketed fully within the subdivision.
It is not unusual for buyers of new homes to approach the new home salesperson when they need to sell soon after buying. Builders generally prohibit their salespeople from selling competing property, but they could recommend you as someone to talk to.
New home salespeople are used to agents coming by asking for referrals and they never see the agent again. You may or may not create a long-term, mutually beneficial relationship but, frequent visits, model tours, and talks with the representative will make you the expert in that subdivision. There is no down side or wasted effort, your very awareness of the features and amenities will help you get listings in the future.
Obtain all floor plans and marketing material. When you do a listing presentation that incorporates their original floor-plan, the sellers are impressed. Know all the model names and their square-footage.
Never let another agent get a listing in this yet to be completed subdivision.
When you show up at your appointment with marketing material created from the original marketing pieces, you will blow away the competition. For doing CMAs, it really helps to have all of the floor plans, models, square footages and amenities to help you position the property within the neighborhood.
Cultivate the relationship
Consistency and follow through are key. Visit every week- same time, same day–like clockwork. Resale people are always blowing in and out looking for “deals”. Then, they never go back. This is how you’ll separate yourself from the herd.
Write an article about the future of the area- jobs, significant construction, other development. Think about what would be important to someone moving into the area. Get it published in whatever publication will take it. Get at least a thousand high quality reprints with your brand.
This will help the site salesperson inform the potential buyer about the area and create a positive impression. For you, it is better than a business card.
Show the Homes
Many resale practitioners decide not to familiarize themselves with a property until they have a client for it. But, that isn’t how this business works. The more you know about a property, the more people you will find who may be potential candidates for that property.
Show everyone you can get to the property. Tell them that though the property may not be right for them, you want them to know what is going on in the market. No showings this weekend? Take a friend or acquaintance on a tour of area new homes.
In addition, you can assist the onsite team by evaluating any property that might be the subject of a contingent offer. A solid CMA and a physical inspection of the property are valuable services to the onsite team. They may not have access to the MLS or be able to visit the subject property.
Benefits to the Builder
This is a true win/win that benefits all parties. Here are some possible benefits available to the builder:
-Enables the builder to accept contingent offers by being able to evaluate each contingent offer on its own merits.
-Enables the developer to accept contingent offers with a very high degree of confidence that the contingent property will sell.
-Could allow builder to attract more potential buyers by offering a trade-in program.
-Provides a unique marketing benefit.
-Increases the buyer’s commitment to the new home community through reinforcement of buyer’s decision by the resale agent.
If you are looking for a productive and enjoyable business builder, go visit new home communities, develop a relationship with the on site sales team, give them something of value and ask for referrals. This is a strategy that will work if you are consistent.
George W. Mantor is known as “The Real Estate Professor” for his wealth building formula, Lx2+(U²)xTFP=$? and consumer education efforts. During a career that has spanned more than three decades, he has amassed experience in new home and resale residential real estate, resort marketing, and commercial and investment property. He is currently the founder and president of The Associates Financial Group, a real estate consulting firm.
Mantor can be reached at GWMantor@aol.com.