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In recent weeks, the real estate industry has been buzzing about the National Association of Realtors’ landmark settlement, along with those of major brokerages nationwide. This has resulted in the spread of misinformation, adding to the industry’s uncertainty.
Yet, the untapped potential for buyers’ agents and new development sales remains an overlooked opportunity. This is a burgeoning market of new inventory, prime opportunity and full compensation for real estate agents.
Charting the future of buyers agents
The real estate industry will continue to undergo significant transformation in all aspects of this business — whether you’re representing buyers or sellers. While real estate professionals grapple with changing practices, it’s crucial to identify untapped potential and opportunities in all segments of this business.
The future for buyer agents, especially in new development sales, looks promising. With developers continuing to champion buyer agents through competitive commissions, the value of buyer-agent collaboration remains a key factor in the success of new development marketing and sales programs.
Sam Brown
“Buyers’ agents have always been offered a 3 percent commission, and we plan to continue paying these commissions for the foreseeable future. We value the relationships built with the residential brokerage community,” Sam Brown, vice president of real estate assets at Ascaya, said. Ascaya is a luxury new home community offering custom-built homes and private homesites in Henderson, Nevada.
Offensive strategy in agent training
In response to the legal turbulence, brokerages have initiated various training programs to empower their agents to excel by wielding actionable strategies to highlight their unique value. Heavily focused on technology and buyer representation agreements, brokers are pressured to prepare a case of defense to ensure short-term sustainability for their buyers’ agents.
However, a gap exists in these training initiatives — a lack of emphasis on an offensive strategy for long-term growth. These ventures, often overlooked, offer fruitful opportunities within the buy-side of new development sales. Multiunit developers are committed to offering commissions to buyers’ agents, acknowledging their imperative role in driving sales.
Chris Meany
Chris Meany, managing partner at Wilson Meany and the co-developer of Yerba Buena Island, San Francisco’s top-selling residential development agrees, “We are pleased to pay our buyers’ agents co-op commissions. Our experience is that people who are shopping for homes at higher price points consult with a professional real estate agent.
“We want to make this process as painless as possible for our prospective buyers because the more expertise brought to the search, the better Yerba Buena Island fares. It’s hard to imagine a broker guiding a buyer to a project that doesn’t offer commissions.”
A strategic move of collaboration with developers
With the spring selling season upon us, the urgency for brokers and team leaders to diversify their agents’ opportunities becomes evident.
Expanding an agent’s sales experience with new development transactions equips them with a broader skill set. It exposes them to a wider array of opportunities, enhancing their proficiency in handling new construction complexities and refining their proactive marketing skills.
Most, if not all, new development projects offering tens or hundreds of homes to sell within any given community continue to offer a real estate commission to outside agents representing new buyers. Brown adds, “If real estate agents are consistently bringing buyers and a developer stops paying buyer commissions, I would be surprised if this doesn’t hurt their sales velocity.”
The Residences at Yerba Buena Island. Photo: Hayes Davidson
The higher the budget, the more likely these buyers are to approach potential purchases with a buyer’s agent to advise them through market research, negotiations and the sales process.
“Some innovators will use technology to streamline the sales process; however, technology-focused efforts to cut out middlemen will work best for commodity offerings. We are seeing sophisticated buyers willing to pay for quality and higher levels of service,” Meany said.
“I suspect developers offering homes to more discerning buyers will continue to make it easy for those buyers to get expert advice and offer commissions to buyers’ agents.”
Lean into opportunities
Elevating agent training programs to include diverse growth opportunities is essential. Introducing additional revenue streams by means of new development sales into these programs is a straightforward and impactful approach. Here’s how to put it to work in your business:
Master your market’s new development inventory
Get acquainted with the new development projects and new home communities in your market by visiting the sales gallery or making an appointment to preview their offerings. Make friends with the sales teams, and ask about sales processes, co-op programs and white-label marketing assets so you can personally market to your network of clients.
Articulate the value proposition to your buyers
New projects typically offer several different home types, floor plans, and various services and amenities that appeal to different buyers and their unique lifestyles. Familiarize yourself with the project to effectively communicate its benefits to your potential buyers, highlighting key factors that resonate with the wants and needs of your clients.
Diligently represent your buyers’ best interests
New development transactions usually require a different sales process and purchase documents; ask the sales team to help you identify the key differences. Whether it’s financing requirements or complex HOA guidelines, get in front of the technical details so you can confidently navigate your clients through the buying process.
Communicate proactively, and stay top of mind with your buyers
Given that many new projects do not publicly list all available inventory, establishing rapport with project sales teams can give you and your clients early access to information on upcoming inventory and exclusive buyer incentives before it becomes accessible to the general public.
Customize your outreach to provide your clients with timely and relevant updates in alignment with their search criteria.
Register your clients, and secure your commissions
Most new development communities require an upfront broker and client registration. Registering your clients into their system early cements your relationship with them and confirms your eligibility for a buyers’ agent commission at that community. This also positions you for exclusive project updates, events and potential buyer incentives.
“Broker cooperation is key to the overall success of new developments and the ethos of our business model,” said Brian Krueger, senior vice president of Coldwell Banker Premier Realty, exclusively representing sales at Cello Tower at Origin, a new development community at Symphony Park in Las Vegas.
“We believe in the value of agents bringing qualified buyers to our development, and we’re pleased to pay a commission because of their efforts.”
Buyer’s agents have a tremendous opportunity to expand on their service offerings and position themselves as pivotal facilitators in new development sales. This proactive approach allows buyers’ agents not just to service their buyers but also forge another layer of relationships to build a reputation amongst future buyers and developers in their market.
Riding the wave of new home demand
Sales volume of new homes during the pandemic’s peak in August 2020 underlines the potential within this segment, with a reported 940,000+ sales of new homes. Zonda reported last month that “The strength in the new home market stems from a lackluster resale market. Inventory has increased 15 percent year-over-year but is still down 40 percent compared to pre-pandemic levels. To address this shortage, new home builders are ramping up construction, with 80 percent planning to increase their build rate in 2024.”
With over 12,000 private homebuilders and residential developers in the U.S., 51 percent of builders reported raising home prices this last February, with 718,098 new homes sold in the same month on a seasonally adjusted annualized rate.
As brokerages pivot to include specialized training that empowers the future of buyers’ agents, opportunities exist throughout the industry. By embracing the challenges and opportunities presented in this new landscape, real estate professionals can secure a vital position in guiding the industry toward a lucrative future marked by informed choices, strategic partnerships and sustained growth.
Utilize your network, resources and online training programs to learn more about new development marketing and sales. Seize the opportunities that await to become a leader in your market.
Hana Cha has been a part of over $4 billion in new development projects across the Americas. Connect with Cha on Instagram and Linkedin.
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