Looking For Inventory? (It may be right under your nose)
March 1, 2021
Laura Kelly Mance
One of the benefits of having a long career in real estate is that I’ve had the opportunity to work in many different aspects of it. Each has contributed importantly to my collective experience. Representing hundreds of corporate relocation properties gave me an education in pricing and contract negotiation that I use to this day….many days later. Being the new home sales manager for a local developer taught me much about new home sales and how different it is from residential resale. New construction is much needed inventory for our Buyers, but it’s a different animal in many ways and requires a different set of skills. I’ll give you a few examples.
If a builder is willing to cut their base price, there’s probably something wrong. Remember, this sale becomes a comp for their next sale. If they discount this sale, they are lowering their future appraisals. That’s not a sign of confidence in the future. If you’re looking for concessions, those are more likely to come in the form of upgrades or a discounted lot premium.
On-site agents say Buyer’s agents sometimes get in the way of the sale. “There was the Buyer, literally gushing over the kitchen and placing furniture in the living room and measuring the master bedroom and their agent said we’d better keep going because we have a lot of houses to see. I wish they’d just let me sell them the house!” New home sales people only have one shot and one product. They’re pretty good at helping Buyers make decisions and you should let them. Sure, there are aspects of the new home sale where they’ll need your representation. Wait for it. But if your Buyer wants to buy this new home don’t stop them just so you can stay on schedule.
With new construction the upgrades can be killer. When my husband and I bought a new home, I knew enough to put in upgraded cabinetry and counters but did base grade flooring, light fixtures and other things easily replaced. We were able to put in wood and tile flooring for half the cost at the design center. That’s where you can help your Buyers.
Make sure you know what each builder’s policy is regarding representation and registering your clients. Call in advance of your first visit and go over the basics. Ask the salesperson to send you a copy of the builder’s contract so you can review it. Your Buyers will appreciate your familiarity with it.
Develop relationships with salespeople in new home subdivisions. Be the one they call if a sale falls through at the last minute and there’s now a spec available. Be the one they call if they have their own Buyer who has a home to sell before they can buy. Most on-site salespeoplearen’tallowed to list those, but they might appreciate a referral fee.
The moment you’ve sold more than one home in a specific new home subdivision you’ve become “the new neighborhood resale expert.” Start your geo farm early. Be visible and consistent and keep visiting that sales office to stay on top of things. Collect floorplans and keep track of design changes so you can “be the one who knows.”
For many people, a brand new home finished with all their own selections is a dream come true, and these days, it’s a significant percentage of the inventory you have to sell. Do it well and you’ll do it again and again. I only scratched the surface of things you can learn regarding new home sales, but with a few choice classes and experience, you’ll have the skills you need.