Real Estate Agent Builder Partnership (RE agent, commission, Realtors, seller)

[Eddie-H]

Hello, I'm new here and was wondering if anyone can share some insight with me in regards to real estate agents referring buyers to home builders for new construction.

I'm having a hard time finding quality resources online about builders attracting agents/brokers to partner with, so if anyone has some good online resources, please include them below.

I know that many home builders rely on real estate agents for business. Some will have their own agents that work for them, while others have relationships with other local agents/brokers who will refer buyers to them when they're interested in building.

What are some things that real estate agents are looking for when networking/partnering with a builder? Do real estate agents seek out builders with the most attractive commission rates? What commission rates are most common for working with builders? Builders that provide you with brochures/booklets to help educate buyers on the building process? Builders with the most amount of model homes to show buyers? Or anything else important?

Also, what are some things that turn you off from builders or that builders can do better to improve their relationship with local agents/brokers? Any reason why you might decide not to partner with a builder?

Would appreciate any information or strategies that builders can implement to build stronger relationships with real estate agents.

Thanks!

[BoBromhal]

are you a real estate agent or trying to become one? Or a builder, or work for one, or want to figure out how to sell them the service of "agent referrals"?

[Eddie-H]

Well I currently do digital marketing and run my own business (since 2013). I work with a handful of clients (in several different industries), but have been working with a home builder for the last year (I built and regularly update their website, design brochures for them, help them with social media, and other marketing tasks).

I'm currently in talks with them to be brought in as a part-time employee, so that I can help them further expand their presence on Google (SEO), run FB ad campaigns, email marketing, and do more in-depth lead generation and vendor outreach to help them grow their sales. A big part of that is to develop relationships with local agents/brokers to help refer more buyers and drive traffic to our model homes for custom home building.

Since I'm going to be getting more involved in the business, I'm currently trying to learn everything that I can and how to develop strong relationships with local agents/brokers. Hopefully that helps give a bit more context of my situation.

[FalconheadWest]

Originally Posted by Eddie-H

I'm having a hard time finding quality resources online about builders attracting agents/brokers to partner with, ...

What are some things that real estate agents are looking for when networking/partnering with a builder? ...

Also, what are some things that turn you off from builders or that builders can do better to improve their relationship with local agents/brokers? Any reason why you might decide not to partner with a builder?

First, you need to understand that there is no "partnership" between a builder and an agent or broker. The only networking that goes on is the builder hosting an agent luncheon to show us their current inventory and what their buyer and agent incentives currently are. Builders aren't networking with agents to provide buyers. Agents will network with builder reps to gain a report so if a buyer is brought, the agent can potentially have the upper-hand in negotiations.

The best thing the builders can do to ensure a reputation is to actually have a heart and see things from a buyer's perspective. The builders that keep earnest money "because they can" will not go far in the market. In my area, there are a few builders that agents absolutely hate taking their buyers to because they know if one little thing goes wrong and the buyer is unhappy, the builder will just threaten the earnest money. Who wants to work under a threat like that? Neither the buyer nor the agents like it.

The builder should be personable to understand things happen and people don't get relocated and people do get laid off, and they should get their earnest money back if the buyer didn't have control over their situation like that.

There is no partnership. The builder is the seller and the agent/broker is bringing in the Buyer. The agent represents the buyer's best interests, not the builder.

[Eddie-H]

Perhaps I used the term partnership a bit too loosely, but if you have a buyer who is interested in building, how do you go about recommending/referring a particular builder to them? (since there may be many in the area) I guess I'm mainly wondering what's the best way to get in front of agents, what motivates them, and how to get them to recommend us over another builder.

I understand that agents are representing the buyer and are working in their best interest, but if someone is looking to build and is looking for recommendations from their agent, isn't that relationship between a builder and agent important? How can builders better show agents that they do have the best interest of the buyer in mind and are willing to make the process easier for buyers?

[FalconheadWest]

Originally Posted by Eddie-H

I guess I'm mainly wondering what's the best way to get in front of agents, what motivates them, and how to get them to recommend us over another builder.

The best way to get in front of the agents is to market everywhere the agents are. Many brokerages have monthly meetings. Call and ask to present at their meetings (I don't go to my brokerage meetings). Send out blast emails to all the agents in the area to ensure they know your inventory. There are many online programs that have our email addresses as I get 50 flyers a day marketing properties. Market at the education classes that are required in your area, or the local board meetings.

But I think you're also looking at things wrong in what an agent can do. An agent can't really recommend one builder over another. An agent can only give their clients facts, not emotional information and many times we have emotional issues with a builder, but that doesn't mean the buyer shouldn't buy from them. Your community is what will make a buyer buy or not. Are you offering what buyers want like a community park, community pool, hike and bike trails? Lower taxes? Lower HOA fees? Gated? Mature trees?

Your community design is what will bring buyers or not. What the community has to offer for families will bring buyers or not. As an agent, we are here to help a buyer weed through what they're looking for, not push one builder over another.

Now, if you're building within a community with other builders, that's a little different. I then have my buyers look to see where they want to locate within the community and which lot(s) they prefer. Then we go and see if the builders who own those lots have what the buyer is looking for. The location within a community is very important, and many people shop floorplan first, and then see what lots that builder has available. Others will shop lots first, and then see what builders are attached to those lots.

Me, personally, I shopped lots first, and then inherited the builder attached to it. Not the best builder in the community, but I couldn't have gotten a better lot to build on.

[LiveItUpState.Mary]

What you are asking essentially, is how to communicate to agents that your company, this builder, and these houses exist. Once you think of it in those terms, the answer should come more freely. Because there are so many ways to communicate, aren't there? You're already in the job of online mass communication. Just broaden your repertoire. You could show up at the agencies and pass out flyers. You could hold a "lunch and learn" where you bring take out for every agent in the office, and you teach them about the builder and how awesome his houses are while they eat. Not every agent will show up, but if the food is good, many will!
You could find these agents on Facebook and friend them - then maybe PM them to tell them about a "special promotion" the builder is having.
You could set up a station in every real estate office's workroom - the place the agents go to make copies, check their mail, and chat with other agents. Your "station" could include, pens with builder's name, note pad with builders name and phone number, maybe a basket of apples once per week (because most of us are too busy to find healthy snacks,) a stack of brochures with all pertinent information - agent bonuses, community details, a list of what your builder puts standard in a house that is probably an upgrade with another builder, maybe even a brochure where the agent can fill out there name and number to give to a potential client, etc. Get creative!
Then holding a "Realtor Open House" at the model, where you serve cool snacks and you let them throw their business card into fishbowls to win a variety of door prizes - maybe even teach them about the builders sales points, then have a quiz where you give out $20's for correct answers. That'll get their attention and they'll actually try to memorize the selling points to get the "prize."
Then there's the weekly newsletter - those are always more readable when you make them helpful for the agents. Remind them of new house laws, or compare new builder warranties in the area - think of questions they may get from a buyer, then write quick emails to answer those questions.
Have a contest on FB where you ask the Realtor to "share" your builders post, then randomly pick one - or 5 of the agents who shared to win money or an iPad - make sure there aren't laws against giving stuff of money to agents in you area.
Maybe have a long running contest where you collect agent cell phone numbers, and once a month or once a week or so you text them a question about the builder, and the first one to answer correctly wins something. That way you're keeping the builders name in their minds - so when they have a buyer looking for a new home, they automatically think of your company.
Just think communication. How can you keep in constant communication with these agents in a way that is fun and educational for them? If it becomes boring, or if there is no benefit for them, they'll stop listening, and eventually stop referring buyers to you. So keep it sharp - keep them on their toes - keep them laughing and smiling - and sell some houses!

[BoBromhal]

testimonials/references from ALL of your existing homeowners. Readily available.

Realtor events at your just-finished homes to show them the finish quality.

Present to Realtors (sales meetings, lunch and learns, etc) and give them insight into the building process and building costs. Help us understand what your homes cost. If, for example, I have someone who wants to build, and of course has a budget ... then I need to have an idea what type of home they can build to meet that budget.

Find out which agents actually have clients (sell homes) like what you're building.

The agents that want education and have the clients are who you should be targeting. In my market - and I assume every market, the ones that have the time to eat and drink on you all the time are the ones who don't have clients.

[Eddie-H]

Awesome, thanks everyone for the feedback and tips, I appreciate it!

[riggy_house]

Originally Posted by Eddie-H

Do real estate agents seek out builders with the most attractive commission rates? What commission rates are most common for working with builders?

What "commission rates" exactly are you talking about. I've known a lot of builders and none of them had any commission rates that I'm aware of.

Are you talking about when a builder gives a RE agent a "referral fee" or commission for helping them score a building deal?

Why not just come up with a fair price to offer?

I've found much of this thread to be confusing. Falconhead is saying the only reason an agent would have a relationship with a builder is so that the agent could potentially have the upper hand in negotiations. But in my mind the builder could just as easily get the upperhand after getting to know the agent. So this doesn't make any sense to me.

What does make sense is if the builder were to say, "Hey Agent, if you refer me as a builder to one of your clients, I'll give you 1% of my profit as a finder's fee,or bird dog fee, if you will."

I've also known agents who run brunches with people of different trades, and they all refer each other. For instance, the electrician of the group will refer the RE agent if they know someone is selling or buying. Or the plumber in the group will refer the group's drywaller if they have a client which needs those repairs in addition to the plumbing.

My agent is always trying to push people on me. For instance if she knows I am going to mitigate radon, or replace a roof, she wants me to use this guy or that because she gets referral fee. Of course, I'd never use anyone she recommends just so she would get a portion of the money that I would be paying for the service.