How Home Builders and Realtors Are Working Together

Home Builders Want to Partner with Realtors

The relationship between builders and Realtors has changed significantly in recent years. What used to be a tense and sometimes unpredictable partnership has become more collaborative, especially between Realtors and volume builders. Thanks to advances in technology and increased access to information via the internet, misunderstandings between volume builders and Realtors are now much less common than in the past.

Supporting Realtors: The Role of Volume

Builders

Volume builders are now actively working to support Realtors throughout the home-buying process. Their onsite sales representatives guide clients through model homes, answer questions about the location and community, discuss interior and exterior design options, prepare contracts, and assist with financing. They also handle appointments after the contract is signed, including option selection meetings, pre-closing walk-throughs, and the closing itself.

Challenges in Realtor Engagement

Despite these supportive initiatives, only a small percentage of agents actively showcase new homes. Research shows that agents want to sell new homes, but they often lack a clear understanding of the builder’s buying, construction, and closing process. Although builders have made it easier for Realtors to participate, communication and access issues still persist.

Barriers to Showing New Homes

Why aren’t more Realtors showing new homes? Technology has made it easier to find both available inventory and potential buyers, many of whom are eager to work with Realtors. The main obstacles seem to be limited MLS participation by builders and confusion around prospect registration at new home sales centers, rather than issues related to commissions.

Perspectives from Onsite Agents

On-site builder agents usually value working with Realtors because these clients are often serious about buying and are financially qualified. However, some builder agents struggle to hide their frustration when a broker accompanies their prospects during a model home tour, fearing that the broker might jeopardize the sale.

Dispelling Common Myths

Let’s examine some common myths that still circulate among on-site new home salespeople.

Myth #1: The Agent Cost Me the Sale

In a weekly sales meeting, a builder’s sales manager reviews the week's sales and questions a salesperson about a lost sale. The agent responds, “They ended up purchasing a resale. I had them convinced to buy a new home, but the Realtor interrupted my sales pitch, and I lost them.” In reality, this shows a frustrated agent who is not taking responsibility for a lost sale.

Myth #2: Realtors Need To Know Construction

What do builders really expect from agents? Do they truly expect Realtors to understand new home construction? The simple answer is no. If construction questions arise that the Realtor can’t answer, the builder wants the Realtor to introduce the homebuyer to the on-site salesperson or construction supervisor and listen carefully to learn about the builder’s construction policies and procedures.

Myth #3: The Builder Should Pay Me a Commission Even When I Didn’t Earn It

Some real estate agents believe they deserve a commission because they “educated the prospects” about the new homes market—despite never showing one. When a prospective home buyer independently buys a new home, the agent may claim they are owed a commission. The reality is that agents are only entitled to a commission if they were the procuring cause of the sale. And that means registering a home buyer on the first visit to the model home.

Builders and Realtors are collaborating more closely than ever, with registration policies and commission structures becoming more reliable. In fact, home builders are paying millions in commissions to real estate agents who introduce home buyers to their homes and complete the co-op registration form.

Encouraging Industry Collaboration

It is time for the real estate industry to actively encourage agents to learn how to connect and work with the new home builder community.

Further Learning Opportunities

For those interested in learning more about building relationships with new home builders, consider purchasing the book, Building Partnerships: A Realtor’s Step-by-Step Guide to New Home Sales Success.

About the Author

Bob Hafer has been a leader in the housing industry for 50 years. His extensive experience gives him unmatched insight into the complexities and rewards of buying and selling homes. His background includes success in consulting, management, administration, sales, marketing, merchandising, research, and sales training for both new home salespeople and Realtors. Contact Bob at www.newhomessalesauthor.com, email him at bob@newhomessalesauthor.com, or call him at 972-795-5926.