Selling New Construction Homes: What Young Agents Need to Know

Compared to your typical resale, the selling process of new construction works somewhat differently. Yet, the clear advantage of selling a newly constructed home is that it allows you to get your clients closer to finding their dream home. With newly constructed properties, the client can choose the structural elements, tiling, flooring, and the like. However, most realtors are not accustomed to selling new construction homes. Therefore, we'll talk about what young agents need to know about the process.

You will need to communicate directly with the contractors

Firstly, take into account that selling a new construction requires you to negotiate with the contractor directly. You may have to do some inspecting to ascertain the structural benefits of the home and, consequently, the adequate pricing. So, knowing your way around state-of-the-art weatherization and other building methods guaranteeing energy efficiency will come in handy. Of course, this is just a fraction of what you need to know as a real estate agent.

You should have a clear idea as to why the buyers need you

If the client is adamant about purchasing a new construction home, you must explain that the process is not straightforward. Many people believe that buying new construction homes involves merely entering the builder’s office, choosing a lot, settling on the design, and signing the contract.

Yet, most homebuyers are unaware that the friendly, helpful salesperson that presents you with the options you have when it comes to pricing and square footage is there to benefit the builder’s interests. In that sense, the homebuyer can place their trust in you based on your advice and guidance.

Make sure to explain the exact range of services you offer to the homebuyer. Apart from assisting in the purchasing process of the new construction home, you can also help them out in other ways. For instance, buyers will appreciate your recommendations to other service providers that can help them settle the move, the legalities, post-construction cleaning, decorating the new home, etc. You can help the homebuyer every step of the way! Once it is finished, your help and resources will make it pleasant to spend time in their newly constructed home.

An architect designing a new construction home

Explain the purchasing process to the homebuyers

This is why buyers need a real estate agent’s experience, expertise, and skills. Essentially, as an agent, it is your responsibility to explain the intricacies of buying new construction homes to the buyer. There are many details that can be easily overlooked, such as those concerning the sale, taxes, fees, deadline extensions, delays, building permits, etc. The average home buyer is unlikely to be too familiar with these factors. Hence, you should do your best to untangle what they are getting themselves into.

Selling new construction homes involves guidance and visualization

Proper guidance is essential when selling new structures, particularly structures such as modular homes. Namely, the house may seem inadequate or subpar during the building phase. That is why you need to explain to the homebuyer that what they may see in the pictures does not provide a good insight into what the home will look like eventually.

Furthermore, your job is to assess the needs of the homebuyers and match them to the properties in construction that will satisfy these needs best. In other words, the homebuyers themselves may not be able to make the right call as they are unaccustomed to looking at properties in their ‘bare form’. As it can be challenging for the buyer to visualize what the home will look like in the end, make sure you communicate the potential of the constructed home in detail, possibly with the help of 3D modeling.

A home construction site

You should ensure the construction goes smoothly

Aside from sharing your know-how with the client, you are also there to provide a sense of control over the building process. This means that you need to ensure that the agreed-upon details are executed in due time. For instance, there may be a few custom elements or upgrades that your client requested from the contractor. You should check upon them in your walk-throughs, both during the building process and at closing.

You are also there to compare the progress with the documentation, locate possible mistakes or oversights, and instigate the builder to mend them.

Make the selling arrangements for the buyer and the builder

The builders might be adamant about keeping the price stable. However, you are there to budge both the buyer’s budget and the seller’s pricing. If it happens that the builder does not want to negotiate the price, you can make a deal for them to cover the closing costs to attract serious buyers. The same applies to the time of the sale - you will have to make the call as to when the sale is most likely to be successful.

A builder with tools on his belt

It is the building company that pays the commission

An added advantage you supply to the homebuyer lies in the fact that the builder pays a part of your commission. This means the real estate agent’s role is to establish a working relationship between the buyer and the builder. In addition, you are there to negotiate the deal and communicate requests coming from both sides. It is vital to keep everything transparent as your reputation in selling new construction homes depends on it.

Career Mistakes Real Estate Professionals Need to Avoid

Making mistakes in business is very common. In fact, it is not possible to make any progress without making some mistakes and learning from them. However, errors can also lead to serious career issues, especially if you work in real estate. With that in mind, here are some major career mistakes that you should avoid at all costs as a real estate professional.

Losing your license

One of the biggest career mistakes real estate agents should avoid making is losing the license to work. This happens if you fail to comply with the compliance rules imposed by the State Regulatory Board. Another way to lose your license is if you commit a felony or do not fulfill licensing requirements. The common mistakes to avoid are:

  • mishandling the money of your clients
  • not giving a full disclosure
  • mortgage fraud
  • not cooperating with investigators
  • providing advice for professions that you are not skilled in
  • breaking the confidentiality agreement with the client
  • Fair Housing Act violation

Besides making sure not to lose your real estate license, keeping your driver's license is also crucial. That will make it impossible to meet with clients on time.

Not treating your customers with care

Every client wants to feel special. If you fail to provide exceptional customer service, you will not do well in the real estate business. That means always be punctual and transparent. Never leave your clients to wait for long, or show them you have a more important client than them. You have to constantly be at the top of your game and keep the communication channels open whenever they need you.

Choosing the wrong real estate agency

Real estate agents can either work alone or join a real estate agency. Both approaches are fine. However, picking the wrong real estate agency can quickly shut down your career. First of all, any agency that does shady business can lead to criminal activities. That's why it is vital to know who you are dealing with. Next, it is also essential to know what kind of agency is the best choice for you.

If you are starting your career, it would be best to go with a smaller company to learn the business with less pressure. As you move forward and your appetite grows, you can seek out a better opportunity if you want. Listen to yourself; whatever feels more comfortable is the best choice. Some people are not built for large companies, and they excel in a more relaxed environment.

Not developing a network of clients and business partners

Having connections is the most critical element of any business. Knowing the right people can push your career in the right direction. If you only work on the current deals and fail to develop a network of business contacts, you will quickly realize that the business is not doing well.

Having connections will help in other areas as well. You will know the market better, and you can also provide multiple services to your clients. Let's say you have a client who wants to buy a house and move to a smaller town. It is very common nowadays that people avoid overpopulated areas when choosing their new homes. Having contacts with moving companies that can provide high level of service will only work to your advantage. You can connect your client with the right company after they make the purchase and leave a good impression.

Not only will the client be amazed and recommend you, but the moving company will also be grateful because you brought them a client. Next time they hear someone is inquiring about purchasing a home, they will return the favor and call you.

Failing to understand the market

We have already seen how networking plays a crucial role in the real estate business. However, there is no amount of contacts that will help you if you don't know your market. Failing to understand the market conditions and fluctuations will result in giving bad advice to your clients. If they make a bad financial decision or fail to purchase a good property, they will blame you.

The best way to address this issue is to focus on your local neighborhood. Do the research, track how the market changes, and focus on knowing all the little details. Once you are confident in the level of knowledge, you can expand the market and start researching other areas as well.

A success chart showing progress over time with a red arrow facing up.

The only way to succeed in the real estate business is to understand your market and your niche.

It is better to know one area and be the best agent there than to have mediocre knowledge of more locations. That takes us to the next career mistake you should try to avoid.

Not focusing on your niche

Being a jack of all trades is admirable. However, as mentioned above, if you are not a master in at least one of your proficiencies, you will not retain your clients for long. Know what your niche is, and focus on it. If you are good at commercial real estate, there is no reason to work on residential deals. If you know the housing market, do not waste your time selling apartments.

Do not get this wrong; it is OK to offer a variety of services. However, be sure that you perfect at least one niche before you start offering other services.

Not thinking about the long-term career opportunities

Everyone would like to make it overnight. However, that is only a dream for at least 90% of people, if not more. Short-term successes are good for motivation and to keep things moving. However, not focusing on your career long-term could be the start of your downfall. Remember to always start small, learn the ropes, and pace yourself. Do not try to climb the ladder overnight because it can seriously backfire.

Career mistakes real estate agents should avoid making explained

Hopefully, you now understand what career mistakes real estate agents should avoid making. Be careful when it comes to your career; even the slightest mistake can turn into a big problem in the future. Be smart about it, take your time, and always leave a good impression, no matter what. Best of luck in your career!