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How agents can make the most of working with homebuilders and developers

by Jeff Benach

A lot has changed in new-construction sales since I first started in the homebuilding industry more than 40 years ago, but one thing that hasn’t is the important role the brokerage community plays in connecting our sales team with prospective buyers. In fact, the percentage of my firm’s sales coming through brokers is higher than ever before, at around 60% — so it’s no surprise we place tremendous value on our relationships with local agents and want to make your experience working with us as easy as possible.

On the flip side, brokers stand to gain a lot by working with a homebuilder. New construction is always a terrific option to discuss with your clients because of the many benefits it offers buyers — particularly in today’s low-inventory market. Plus, there are direct benefits for brokers, too. I always like to tell agents that bringing a buyer to one of our communities is “the easiest commission you’ll ever earn,” because we’re there as a knowledgeable partner to guide your client through the entire process of purchasing new construction, and virtually all you have to do is wait to collect your commission. If you want to make sure a new-home sales transaction goes as smoothly as possible and really get the most out of your relationship with a builder or developer, here are a few things to know and expect:

Find us on the MLS as you would any other listing …

Back in the pre-digital days, before MLS listings were readily available to anyone online, brokers were an important conduit to buyers in search of a new home, and a big driver of sales traffic. Today, we know most buyers start their home search by doing a tremendous amount of their own research, looking at listings online even when they have enlisted an agent. That makes it essential for builders to put our communities and available homes on the MLS with detailed listings and great photos.

While you’ll easily find new-construction communities as part of an MLS search in a specific geographic area, our sales team is still proactive about connecting with local brokers. Hosting broker events to tour newly completed models is an important part of our sales strategy, as is updating agents on community milestones. Builders and developers are very aware of the top brokers in a given market or submarket. We want to be at the top of your curated showings list, especially if your clients are interested in an area with multiple new-construction communities.

Once the contract is signed, every builder handles the process differently

The reason I tell agents that selling one of our homes is the easiest commission they’ll ever earn is because at Lexington Homes, once the contract is signed, we truly “take it from there.” We take the reins and work directly with the buyer on financing, site selection, structural upgrades and choosing finishes. That said, we respect the agent-client relationship and understand the commitment you have to their homebuying process, and we are happy to keep you in the loop throughout the process.

Understand the new-construction timeline

While there are many similarities between the process of purchasing a resale and a new-construction home, one of the most significant differences is the timeline. Unless your client is purchasing an inventory home (finished and ready for move-in) or early-delivery home (already under construction) from a builder, they’re typically looking at six to eight months until delivery of their home. That lead time is not only important to consider when talking with your clients about their needs and goals for a move-in date, but also something to take into account when choosing a lender and securing financing.

Like many builders, we have relationships with preferred lenders. When brokers or their clients bring in an outside lender, it can complicate things if that lender doesn’t understand the nuances of new construction. This includes understanding the time frame of an interest rate hold, as many buyers must wait through the entire construction process to lock in their final rate, typically three months out or less from completion. However, as part of purchasing a new-construction home, we require buyers to go through the mortgage process early on — even though they can’t lock in that rate until later — as we need to ensure they will be able to close on the home.

Know and sell the benefits of new construction

One final way brokers can get the most out of working with builders and developers is knowing and selling the benefits of new construction. While it sometimes comes down to a buyer’s individual preference, your input on why a new-construction home could be a great option is invaluable, particularly when market conditions favor your client.

For example, right now, it can often be less expensive to purchase a new-construction home as compared with resale, according to GlobeSt.com. There are many other positives to highlight: available inventory; having a firm delivery date to plan around; the opportunity to customize your home, from choosing the home site and floor plan to selecting finishes and upgrades; the protection of a home warranty, typically one year on the entire home; new technology, in terms of finish options and the construction process; and the pleasure of living in a home where everything is fresh and new, as many resales have out-of-date finishes.

The nature of buying any home, including a new-construction home, has changed in the time I’ve been in the industry, but the symbiotic relationship builders and developers have with the brokerage community remains strong. At the end of the day, we have the same goal of helping buyers find the perfect home, and that is best achieved when we work together.

Jeff Benach, principal of Lexington Homes, is a second-generation homebuilder with more than 40 years of experience in the real estate industry.

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