Author: Tony Gilbert

Understanding the Mutually Beneficial Relationship Between Real Estate Agents and Builders

Today, both real estate brokers, agents and home builders can benefit greatly by establishing solid relationships with each other. Appreciating the value for the services of each can start in understanding the potential financial power in some simple, raw numbers.

• There are an estimated 2 million licensed real estate agents in the nation and over 86,000 brokerages. That is a huge potential sales force for new builders.

• Of the over 6 million homes sold in 2017, more than 10% were new construction. Many of these new construction homes were in in new home subdivisions and developments.  

Yet, in far too many cases there has been an uneasiness in real estate agents working with builders and vice-versa. There are issues of client control and agent involvement that can get in the way. Oftentimes, real estate agents don't have full knowledge of the construction process. Many builders are independent and are used to operating on their own terms. The same can be said of most agents.

When it comes down to it, however, the numbers speak for themselves. It can be mutually beneficial for agents and builders to work together. Here are some of the issues and potential mutual benefits to building relationships.

Agents Should Interview and Choose Several Builders to Recommend 

For real estate agents to be of real value to their clients, they should feel comfortable about the builders they recommend. This means the quality of work, reputation, and ability to build on-time. This will take some one-on-one meetings with builders and learning about their products and types of homes they specialize in. It can help to interview some previous customers as suggested by the builder. Real estate agents should have three to five builders they feel comfortable taking their customers to.

Each Should Understand Agent-Client-Builder Relationships

Real estate agents have been trained to build long-term relationships with their clients to get return business and referrals. They can be very protective of those relationships. Builders, however, are also used to dealing directly with their buyer clients. This potential area of conflict can be resolved in meetings between parties to decide how each likes to work and how and when direct client contact can or should be made from the builder. Perhaps the real estate agent doesn't need to be involved in cabinet or wallpaper choices, but then again the home buyer may appreciate their input.

Proper Expectations Should Be Set

Both builders and agents can improve these relationships by setting honest expectations about timelines and capabilities. Each should understand who is the “point person” with the client. No one gets paid until closing so beyond keeping the home buyer happy, nothing is more important than keeping the process moving efficiently toward closing.

Understand the Lingo

It is difficult to build a relationship when there is a language barrier. Unfortunately, builders and real estate professionals use different terminology in their industries. Both need to make an effort to learn the common terms of the other and help the buyer client with these terms.

The “Why's”

How many real estate agents and brokers have been frustrated by buyers who can't seem to find a home they like or make up their mind? Having solid relationships with area builders provides an outlet for these home buyers who would now have unlimited choices. Rather than continuing to waste an agents time looking for the “perfect home” they can build it. There are over 338,000 home builders across the United States with over $83 billion in annual sales.  

For builders, these relationships can provide access to an experienced sales force who have often pre-approved candidates at their disposal. Bringing more real estate brokers and agents into the fold can keep their contractors busy and their business growing. There may always be a little “competition” between real estate agents and builders, but as any barriers are broken down further, relationships can be built that are mutually beneficial. The agent and broker wins, the builder wins and perhaps best of all, the client wins as well - a great win-win situation!