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Sometimes so-called trends are a lot of talk and little substance. But when it comes to the new-homes market, the statistics support the hype—nationally, just over one million permits were pulled in the last 12 months (at press time) and builders are starting to expand and hire again. A nationwide inventory shortage and ongoing preference among homebuyers (55 percent, in fact) for new construction serve to support the segment long term. The only question left to answer is how can brokers and agents make the most of the opportunity?

For Ed Krafchow, chairman and CEO of San Francisco Bay Area-based Better Homes and Gardens Real Estate Mason-McDuffie, the solution wasn’t readily apparent.

“Ed’s first reaction was ‘there’s not much going on in new homes in my markets’,” recalls Dennis Walsh, creator of the Certified New Homes Specialist (CNHS) course and designation. “I showed him the NAHB (National Association of Home Builders) stats—which revealed that just in San Francisco alone last year, more than 12,000 building permits had been pulled—and he couldn’t believe it. And that same scenario is playing out over and over again across the country.”

According to Walsh, co-founder and CEO of Dennis Walsh & Associates, Inc.—which, in addition to the CNHS training, offers Residential Construction Certified (RCC) and 203k Specialist courses—the new-homes segment of the real estate industry continues to enjoy a steady climb thanks to pent-up demand.

“During the downturn, development activity had shut down,” explains Walsh. “But investors and developers with deep pockets bought up lots, and all kinds of new-construction projects are now on the rise, along with a growing demand for new housing.”

For Krafchow, this national trend, combined with rising development activity in his firm’s markets, sparked the decision to attack the new-construction segment in a big way. He brought on Walsh to offer his designation training to interested agents, and enlisted experienced and savvy REALTOR®, David Poulsen, to spearhead a New-Homes Division for the firm.

According to Poulsen, Better Homes and Gardens Real Estate Mason-McDuffie’s New-Homes Division launched this past October and is already comprised of 70 agents, with hopes to grow that contingent to 150–200. The division is already working 950 building sites and home construction opportunities.

Starting a specialized division enables brokers and agents to take a focused, proactive approach to new-home sales, and explore the many opportunities available within the segment, such as infill development. As Walsh explains, “Most agents are sitting around waiting for new inventory to show up. But what if we taught them how to go out and get involved, and bring the different players together to find a property that can be torn down and rebuilt? Agents can be playing an active role in bringing new inventory to the market.”

That’s exactly the type of creative challenge that drives Poulsen and his team.

“I’ve always loved the new-construction segment of the business because of the creative process it involves,” says Poulsen. “It can be very lucrative, but it’s more than just selling a three-bedroom house. These types of deals allow agents to get more creative. Sometimes you’re literally starting from the ground with nothing on it and working with a developer to create housing.”

Whether starting a division or taking it on solo, to be successful in the new-homes arena, agents must commit for the long haul, stresses Walsh.

“You can’t approach it with a total short-term perspective,” says Walsh. “Yes, you have to close real estate and pay the bills, but you also need to make a long-term career out of the business of real estate so you need a longer-term perspective. You have to be willing to lay the groundwork on something that you may not get a return on for a year.”

And the benefits will be worth the wait. Once an agent or broker is in the rhythm of identifying properties or lots that could be lucrative for developers, deals and closings can happen fast, followed by residual income, once the new property is ready to be sold. What’s more, when a vacant lot or tear-down becomes home to a multi-unit condo, the agent then reaps the rewards of multiple transactions.

However, achieving this real estate nirvana requires a commitment to education and training.