With more than 25 years in the business, David Schoner is recognized as one of the nation’s leading experts in new-home sales and marketing. As the previous owner of Schoner Research and the New Jersey New Homes Guide, he’s worked for the past 17 years as vice president, Coldwell Banker NRT, responsible for all New Homes Division operations. In this interview, Schoner shares his insights on the rebound in new-home sales and how brokers can best build this important revenue stream.
Teresa Walsh: Why do you feel new homes should be an important part of a real estate broker’s or agent’s business?
David Schoner: What motivates me about new-home sales and what’s in it for me is security. We’ve been around for 20-plus years and we’ve weathered every storm so far. I look at new homes from this perspective: builders are essentially a multiple listing service. If you provide them great service, they will provide you multiple listings—it’s an annuity. A study done in Boston found that on average, brokers sell two or more existing homes for each one of their new-home listings. Clearly, marketing new homes drives more resale business as well.
TW: I’ve spoken to agents who avoid new-home sales because they don’t want to wait to collect their commissions. How do you address this with your associates?
DS: That’s a short-term focus. Yes, you often have to wait longer for your commissions, but in the long run, new-home sales actually provide far more financial security. For example, when the market started to decline, many agents were out there scrambling and wondering where they’d land their next paycheck. The problem is they hadn’t built a pipeline. At the same time, new-homes specialists—here in New Jersey and all across the nation—had numerous homes lined up in their pipelines. I personally know agents that had 10 or more homes presold. They knew exactly where they’d be landing their next 10 paychecks. That’s another example of greater security.
TW: So what’s happening in your market today?
DS: There are a lot of positive things happening and new-home sales are clearly on the way back up. We’re active right now in 80 developments and looking to train more associates with the Certified New Home Specialist training. In strong markets in the past, we were actively marketing more than 300 subdivisions and now’s the time to prepare for that growth.
When I see the limited inventory and bidding wars going on in so many markets, I think about what a great solution new homes offer. Agents are busy writing up offers, but are they actually closing deals? Buyers are getting frustrated—instead of paying top dollar and living with compromises, a new home can give them exactly what they want.
TW: It’s well known that you make training mandatory for your new-home sales associates. Can you tell us why?
DS: Quite a few years ago, I noticed our new-home associates in the north region delivering a much higher level of sales success than those in the south. Curious, I reached out to my regional directors asking why they felt there was such a dramatic difference. They all came back to me with the same conclusion: Almost all the north region agents had completed their Certified New Home Specialist training with Dennis Walsh, but those in the south region never had.
That very day, I scheduled Dennis to come to South Jersey. Not long after our south region agents completed the training, our new-home sales skyrocketed in the south. That was when I made the training mandatory. I build my business on integrity and I can’t fulfill my promise to a builder if I don’t have sales associates armed with knowledge and confidence—and ready to get the job done!
TW: So is it fair to say you don’t buy into a “build it and they will come” philosophy?
DS: If only real estate could be that easy! Most homebuyers don’t have the knowledge and confidence to go out and buy a home without the help of a trained real estate professional. People are looking for someone they can trust to help them make the best decision. And the way you build that trust with both buyers and builders is by having knowledge and confidence.
And what I mean by knowledge is knowing the product that you sell—the parts and pieces of a home as well as the new-home sales process from soup to nuts. Would you buy a car from someone who doesn’t know what antilock brakes are? How much trust would you have in that salesperson, and could they truly call themselves a professional? Buyers need to first buy into you before they buy anything from you.
TW: What would you say to brokers and agents who consider new homes just a niche?
DS: It’s one incredible niche, and it’s a niche that continues to grow when you do it right. Here’s a perfect example: In 2005, we started working with a builder who had a small 10 lot subdivision. His next project was 30 townhomes. We then helped him market 40 condominiums and his latest is an award-winning project with 92 properties. So, over an eight-year period that included the most difficult real estate market most of us have ever seen, a single builder brought sales of more than $160 million into our company.
I assure you, these opportunities are out there and new-home sales are coming back with a vengeance. I encourage brokers everywhere to prepare themselves to make the most of the wave that’s coming. Even though New Jersey isn’t known for great surfing, I’m ready to enjoy the ride.