Here is my newly published article for the National Association of Home Builders NAHB published 10-15-2009
By Shirleen Von Hoffmann President of HomeBuilder’s AdvantEdge Copyright 2009
The market appears to be settling, and a new market lies before us. Things have changed and we can’t just start operating again as we did during the boom nor can we continue to act as we have during the recession, we are in a New World.
New Home Builders and their Sales Teams must have new ideas, strategies and partnerships to be truly successful in our new world. There is always a plateau before you start a market ascent. Our plateau might last for some time as we have some complicated economic challenges to work out.
During the peak of the recession many Builders made great Broker relationships but it wasn’t easy. Brokers were skeptical and didn’t trust the Builders who now need their help. Why? Because in the past Builders shunned them. If a Brokers client’s looked at a new home without the Broker present they had to walk a gauntlet to get a commission or referral fee for that sale. And many times Builders didn’t pay a co-op at all. Realtors just stopped showing Builder properties because they didn’t feel respected or valued by Builders.
But what if we thought differently about these partnerships in our “New World”? What if we wrapped a different outlook on these partnerships and for the long term? What if we considered the Brokers to be our “Outside Sales Reps” welcomed them to our teams and paid them accordingly for their efforts? How could that benefit our New Home Sales for the long haul and change our futures?
Let’s go over some ideas being used to create and sustain these partnerships and collaborations.
Aligning Companies that complement each other.
Creating collaborations makes sense in tough markets and in all markets. It makes sense when it makes money, shares costs, saves resources, adds employees, adds traffic and grows market share.
Take a look at the market place now, you see successful collaborations everywhere. A few examples of this sort of idea are strip malls with the same Anchor tenants partnering over and over again throughout the country. Placing a fast food chain, with an ice cream chain, on a gas station property. The idea is to create a one stop shop. Builders can create the same partnerships with Brokers and create a one stop shop for housing solutions.
Set up win-win partnerships
Each Builder should have relationships with key Broker Agencies and set up those relationships from the top down. By doing this you can prearrange the details of the partnership from the corporate level and communicate that message throughout the organizations.
When you make these agreements on a corporate level, you can come up with pre-agreed commission structures and or flat referral fees. Then those Managers can communicate those fees throughout their organizations. Once the Sales Agents knows the Company has an approved collaboration and the terms and fees are set, it makes it easier for the Agent to show your property over your competitor’s.
Encourage from the top down, that your “Inside Sales Representatives” work with your “Outside Sales Representatives” and align these teams for success by being clear on goals and the elements of the partnership. Make it easy for your “Outside Representatives aka Brokers to deliver and get paid on new buyers they bring to you.
Size does make a difference
The Larger the Builder the more communities and floor plans the Brokers have to choose from to meet the needs of their clients.
The larger the Broker the more “Outside Sales Representatives” the Builder has working for them.
So it makes sense for “like minded” companies to develop these collaborations.
Buyers are always asking for references to list their homes so they can purchase a new home. It’s easy for Builders to give priority resale opportunities on contingencies, via referral to the Brokers With these partnerships in place it’s easy for Brokers give you their first New Home opportunity showings to the Builders they partner with.
Brokers can also negotiate lower fees in lieu of obtaining volume referrals from the Builder. There is no reason why the Broker can’t reciprocate the referral fee back to the Builder via shared advertising or something similar. It will all depend how the partnership agreements are worked out but the ideas are endless.
Having an easy Broker Log in system
Have an online system where the Broker can input all of their information online so they are considered an “Approved Builder-Broker.” Then when the broker sends a client over to view the homes, they simply can call ahead to the Agent to let them know their coming. They are “Approved” in advance so there is no need for them to accompany the buyer to the models if time doesn’t allow. The Builder has all pertinent information on file in advance, so payment to the Broker becomes much easier and more routine.
You can talk to many builders who have been successful setting up these key partnerships and they will tell you it wasn’t easy and they had to be creative. Here are some ways to encourage partnerships through Events.
Holding Events to Create Partnerships with your “Outside Sales Team”
Come up with fun events Brokers can come to and feel like a part of your Sales Team. Here are a few ideas to get you started.
• Invite them to hold their weekly Sales Meetings in your models and provide some coffee and goodies for them. While there, Builders can do a presentation going over all the details of your homes, options and communities. While there, sign them up to be “Approved Brokers” making them fully aware of your partnership details. Make them feel a part of your Sales Team and family.
• Provide various seminars staged in your models, they can come and bring their clients at no cost.
• Create sales contests based on volume with your “Outside Sales Team” just as you would your “Inside Sales Team”.
• Lender or Escrow Seminars where they can learn the latest in Loan Products and Escrow details. Sales Motivation Seminars to stimulate them.
• Have one of your Superintendents teach a “new construction” seminar so they can learn about how a home is construction and the timing of it.
• Invite them to your “Inside Sales Meetings”.
• Hire a trainer to teach a continuing education seminar so they will get continuing education credits.
• “Broker scavenger hunts”, where they have to find items in each model to win prizes.
• “Broker Poker”, where they come after hours, relaxes, play cards and have fun right in your models.
I teach Sales Agents that Trust and respect are 75% of a sale. Builders could benefit and learn from this lesson as well. Trust and respect will build these Builder-Broker relationships. Intention of longevity is the key to sustaining these collaborations for our “New World” of Real Estate. Having these smart, win-win partnerships will just accelerate our comeback, our markets and our profit margins.
Change your mindset around Brokers, take the time, invest the energy and build your “Outside Sales Team”, it will really be the difference you need and come in the form of more sales!