At any given moment, during any given day, one of the 5500+ Realtors that belong to any one MLS is trying to make a decision on which home or homes to show his or her client. Builder sales representatives recognize the importance of working with Realtors and are constantly engaged in trying to figure out the best ways to attract a Realtor’s attention. So what’s the best way to proceed? With all the things a sales rep could do, what are the things you should do?
Let’s begin by exploring what we call the four “Realtor Facts”. These are facts that we’ve accumulated through conversations with clients and prospects, through our surveys of Realtors across numerous markets, and through our own analysis of sales in the various MLS systems that we work in. If you accept these facts, then they will affect how you work with Realtors.
- Realtor Fact 1 – Realtor traffic as a percent of a builder’s overall traffic has increased significantly. In years past, Realtor traffic may have constituted 20% of a builder’s total traffic. In today’s market place, Realtor traffic can be 30-40% or more of overall traffic.
- Realtor Fact 2 – Realtor traffic is the highest converting traffic available to builders. It’s not unusual for Realtor traffic to convert between 25-50% of the time.
- Realtor Fact 3 – Only about 10% of Realtors will sell 1 or more new homes with a particular builder over the course of a year.
- Realtor Fact 4 - Over 93% of Realtors tell us that they start their search for a client’s home in MLS.
Given these facts, what are some observations that we can make that can help sales counselors determine the best way to work with Realtors? First and foremost is that builders should place significant emphasis on capturing Realtor traffic. What makes this even more important is that as overall traffic has dropped off, Realtor traffic is now a much larger slice of this smaller pie.
Second, since only about 10% of Realtors sell a new home with any one builder, sales representatives need to recognize that simply working the same group of 20-50 Realtors over and over will not generate a large number of Realtor sales. Sales people need to recognize that the real opportunity to grow their business is by connecting with some of the 5450 or so other Realtors in MLS that they normally don’t do business with. But it’s not just any Realtor. Sales representatives must focus on the Realtors that are going to have the greatest impact on their sales.
This brings us to our third observation. Since over 93% of Realtors conduct their property searches via MLS, the best way to get action on an inventory home listing is to ensure that the inventory home listing seen by the Realtor community is complete, accurate, and speaks to the unique selling propositions of the home and/or the community where it resides. Sales people should check their listings regularly.
This important observation also suggests that sales counselors need to seriously evaluate how much time they spend chasing Realtors. If the best way for a builder to reach the largest number of Realtors is through his or her listings, this would suggest that sales counselors should scale back on the hundreds of flyers they distribute to brokerage offices or the hundreds of dollars they spend on Realtor luncheons or giveaways. NHMS is not suggesting that sales organizations stop doing this completely, particularly since professional networking is always a positive. We are, however, suggesting that investing significant dollars and time in trying to “capture” the mind space of Realtors is impractical. Focus on your listings and react quickly to the leads they generate.
So how should a sales representative spend time cultivating Realtor contacts? Be targeted. Are you representing a move up or move down community? If so, look at your selling history. Where are your buyers coming from? Maybe they come from a specific zip code or school district. Or maybe most of your buyers are coming from a radius of between 2 ½ to 3 miles around your community. If so, keep an eye on listing activity in these areas. As soon as something comes on the market, contact the listing agent. This agent represents someone who is like other buyers in your community. Find out what the seller is planning to do after they sell.
Suggest to the Realtor that he or she bring their seller over to your model to get registered. Share with the Realtor that the homeowner is likely to make his or her way over to your model since your community is a likely fit based upon previous sales. As the salesperson, you are simply looking out for the Realtor’s best interest by getting the prospects registered and protecting the Realtor in case of a purchase.
Are there communities around you with homes competitive to yours? If so, keep track of new listings that come on the market. Get in touch with the listing Realtor and strike up a partnership. Get the Realtor’s opinion of the listing and the market. It’s possible the listing agent may represent a buyer who isn’t a fit for this listing. You might become their “second choice”. What would your traffic look like if you became the “second choice” of 5-10 listing agents around you?
Working with Realtors is no different than working other types of leads. All leads take some amount of effort. With Realtors, let the power of your listing serve as your primary billboard to the Realtor community. Manage it, update it, and respond quickly to inquiries. When it comes to fostering individual Realtor connections, work with those Realtors most likely to have an impact on your business. Just a small change in how you prospect for Realtors will result in big changes in your Realtor business.