In today’s episode, Monica and Marion Napoleon talk about helping buyers with new construction — a topic that is important to both of them. The population in America is growing and demographics are changing.There are more single family homes as people are marrying later and divorces at all age levels create a need for more separate housing. Another factor is that people are living in more multi-generational housing situations. This together has created a general need for more housing. They explain some aspects of the process, how you can provide value as a real estate agent, and some tips for custom builds. Hopefully, this episode will help you understand why they love helping buyers with new construction, and why you should, too!
Buyers tend to like new construction because it gives them options. They are not worried about multiple offers and perhaps, most importantly, they are able to customize their homes however their budgets will allow. A lot of agents shy away from new construction, but it can be great for commission and helps to boost earnings. There is also a team that comes with new construction — a real estate professional, a sales agent, and a construction manager. All of these people are here to help the client get a new house.
One of the most important things for new agents is to get to know your area. Make note of what’s around you and connect with the new home agents so you can learn their processes and their products. You want to build up a “toolbox” so you can help your buyers make the right decision. Both Monica and Marion organize the information they collect into a Dropbox or Google Drive, as a buyer’s book. That way all the information is consolidated and easy to share with your clients.
There are several options when it comes to the payment. With home builders, there is already a real estate commission set aside for Realtors®. This is something to educate and explain to your buyers up front, so they understand that it’s set aside whether they use it or not. As an agent, you can communicate with the builder and let them know what types of properties you might be looking for with your new buyers.
If you come into new construction in the middle of the transaction, it’s not too late! If you know that your client has started looking, you know that the interest is there, and you can do your research on other areas and show them some other options. If they want you to be involved, you can be. Don’t walk away anywhere in the transaction, because you can still provide value.
As buyers’ agents, there is a lot of value you can bring to a new construction transaction. As real estate professionals, you bring additional global knowledge to the transaction. You can present yourself as a consultant for the entire process, not just the new construction piece. This is especially important when it comes to the contract — you want to make sure you go through the whole contract with your client to make sure everything is understood and how the client wants it. If you are involved, you can troubleshoot proactively, rather than learning about problems once they’re a big problem.
When a big problem occurs, that is when buyers’ agents really show their value. You become an advocate for their clients and will go to the builders on their clients’ behalf. As a professional, you can mediate the issues and also find other options.
A home inspection is a must for new construction. When you get the inspection, don’t sign until everything that needs to be corrected on the inspection actually gets corrected. The inspection should ideally happen right before the walkthrough with the builder. Then you can bring the list to the walkthrough, and the builder can fix what needs to be fixed or provide a good explanation, in writing, as to why it can’t be fixed.
When looking at builders, you can direct buyers to do their own research so they feel confident in their choice. A great resource for consumers is the National Association of Home Builders. Usually, they can see for themselves the quality of the construction, but you can also help ensure the process goes smoothly regardless of who they go with by encouraging an inspection, or inspections, along the way.
Custom builds can be a great option if you have the finances, the time, and the creative vision. The process of the custom build can be very overwhelming, because you have to find a floor plan, and also often have to find your own builder. The biggest thing to consider with a custom build is cost — the client is paying for every single thing they choose. You also have to consider the land involved, as well as working with the county/city for building permits, etc.
Another thing to consider as an agent is the payment on custom builds. You want to make sure these terms and agreements are negotiated and agreed upon up front. The commission often becomes a line item, and as an agent, you want to cover all your bases.
One of the last thoughts from Marion is to really educate yourself as a Realtor® on new construction and then educate your buyers on new construction. If you sprinkle new construction into your other listings that you’re showing your clients, they may fall in love with something they didn't even know was out there.
At the end, Monica lists some classes concerning new construction that are available at onlinelearning.realtor or training4re.com.
About Marion Napoleon
Marion Napoleon is the broker/owner of Unlimited Realty Solutions in Grand Prairie, TX. She has over 17 years of experience as a real estate professional. She works with all kinds of buyers, and is a national speaker with the National Association of Realtors®, as well as speaking on motivational topics. She is trained and certified to help you reach your goals and aspirations in every area of your life. For over 30 years, Marion Napoleon has devoted her life to changing the lives of others. Marion is a real estate broker and instructor, certified life coach, author, nationwide corporate and Christian motivational speaker. She is also former Dallas Cowboys cheerleader.