A national survey finds that a majority of homebuyers want to include brand-new homes in their search. At the same time, a small percentage of real estate professionals have the training, market knowledge and builder relationships to professionally support their clients in the new-homes arena. As a result, the majority of brokers and agents are professionally meeting the needs of only 46 percent of today’s homebuyers! Are you overlooking one of the most powerful keys to maximizing real estate success?
Can you imagine Lowe’s or Home Depot advertising this message: “We’re here with everything you need to meet 46 percent of your home improvement needs.” They might even add, “For the other 54 percent of your home improvement needs, you’re on your own. Good luck.”
It’s not only hard to imagine, but this would be a business model clearly destined for failure.Yet, as crazy as that might sound, this is not too far off from the message many brokers and agents are sending prospective homebuyers. I’m not suggesting anyone is doing this intentionally, but consider the following facts to better understand this reality.
A national survey of active home shoppers across 25major metropolitan areas conducted by BHI Inc., a consortium of 32 of America’s largest home builders, found:
- 19 percent are determined to buy a brand new home and will not consider resales.
- 35 percent want to explore both new and used homes in their search.
- 46 percent are focused on searching the inventory of resale homes only.
I’m sure you don’t find these numbers surprising. In fact, in our extensive travels, we find most brokers and agents feel that a full 60-70 percent or more of home shoppers in their markets want to include new homes in their search. Yet, the same brokers and associates acknowledge that less than 5 percent of all real estate professionals have undergone the specialized training, gathered the market research, and have established the builder relationships necessary to support the needs of this majority of buyers interested in new homes! Armed with this knowledge, I can’t imagine any real estate professional not recognizing that it’s essential to be prepared to fully meet the needs of today’s homebuyers—or a broker consciously ignoring the needs of a majority of prospective customers.
Not coincidentally, some of real estate’s most successful leaders do recognize the importance of new-homes expertise for real estate success:
“New-home business has always been important for resale—there’s clearly a relationship between the two.Our ability to help buyers across both areas attracts more buyers overall,” explains RE/MAX Chairman and Co-founder Dave Liniger. “Builders are beginning to prosper again, so agents absolutely need to make sure they are prepared and arm themselves with education in new home sales."
"I’m very enthusiastic about new homes and urge everyone in real estate to prepare for the boom in new-home sales.” Ron Peltier, chairman and CEO of HomeServices of America, talks about today’s new-homes opportunities in contrast to the recent REO market. “If a sales associate is not knowledgeable in the new-homes arena, they are going to miss out on an even greater opportunity. We all saw how REOs became a dominant part of the business for several years. What’s important to recognize is that new homes are a much bigger opportunity than this — even bigger than it was 10 years ago. There is tremendous pent-up demand, growing household formation and interest rates that still remain historically low. These factors should continue to play out for many years. Together, this adds up to a massive, long-term opportunity.”
Helen Hanna Casey, president of Howard Hanna Real Estate, has grown up in a brokerage always active in new homes. “We expect to see growth in both new-home buyer and builder representation. With today’s tight inventory and growing buyer demand, we need to focus on new homes to satisfy the needs of the market. At the same time, builders are afraid to put up spec homes, which means agents need to apply new sales skills and strategies in this changing market.”
As you consider these opportunities, I highly encourage you to position your company to fully support the needs of all prospective buyers by adding real new homes expertise to your mix of professional services.Get your agents the proper training and you’ll empower them to take their business, and yours, to higher levels of professionalism and success.