Today I’d like to explore an exciting topic—how to leverage new construction to your advantage in today’s real estate market. If you’ve been feeling the pinch of low inventory and struggling to find properties for your buyers, you’re not alone. But here’s the good news: there’s a whole world of inventory out there that many agents aren’t even considering. Let’s explore how you can tap into this hidden goldmine and get your buyers the best deals possible.
My First Sale as a Realtor
Let me take you back to where it all began for me—over 25 years ago, when I first got into real estate. I started in new construction, working for a builder in Lehi, Utah. I remember my first day vividly, sitting in a sales trailer with no idea what to do. My mentors, “Number One” and “Number Two,” told me not to speak to anyone. But when a young couple walked in, I couldn’t resist. I greeted them with enthusiasm, and before I knew it, I was showing them lots and models.
We found the perfect lot for them, matched it with a model called the Sonoma, and they were ready to buy. I had no clue how to write a contract, but with a little help from Number One, I closed my first deal that very day. From that moment, I was hooked. Within six months, I was the sales manager, overseeing the very people who trained me. The key to my early success? We had the inventory, and I treated every buyer like they were there to purchase a home.
The Power of New Construction in Today’s Market
Fast forward to today, where inventory is tight, and it can feel like finding the right property is an uphill battle. But here’s the thing: many builders only list a few of their models or spec homes on the MLS, leaving a lot of inventory hidden. As real estate agents, it’s our job to know where to find these opportunities and how to present them to our buyers. Builders are eager to work with agents and often offer fantastic incentives to do so.
Eight Tips for Negotiating with Builders
To help you navigate the world of new construction and get the best deals for your clients, here are eight insider tips:
- Know the Builder’s Incentives: Start by creating a spreadsheet of all the production builders in your area. Research their incentives by checking ads, visiting their websites, and going to open houses. Builders often offer deals like discounted points, free upgrades, or landscaping packages. Knowing these details helps you guide your clients to the best options.
- Build Relationships with Sales Managers: Strong relationships with the salespeople and managers at new construction sites can open doors to better deals. When you have a good rapport, you can negotiate more effectively within their parameters.
- Compare Lender Offers: Builders often incentivize using their preferred lenders, but it’s crucial to compare these deals with other lenders. Sometimes, the builder’s lender offers the best deal; other times, your trusted lender can save your clients more money.
- Focus on Builder Incentives for Added Value: Builders can offer upgrades like better appliances, finished basements, or upgraded flooring at a lower cost than aftermarket options. These incentives add significant value for your buyers.
- Negotiate Upgrades During Construction: It’s easier and cheaper to get upgrades during the construction phase rather than after the home is built. Encourage your clients to think ahead and take advantage of this opportunity.
- Look for Spec Inventory: Sometimes deals fall through, and spec homes—homes that are already built—become available. Builders are motivated to sell these quickly, making them prime targets for negotiation.
- Always Ask for More: Don’t be afraid to ask builders for additional incentives or better deals. If you don’t ask, you’ll never know what’s possible.
- Be the Expert: As an agent, your expertise in new construction can set you apart. Knowing where to find hidden inventory and how to negotiate the best deals makes you invaluable to your clients.
Unlocking the New Construction Advantage
The bottom line is this: there’s more inventory out there than you think, and new construction offers a wealth of opportunities. By understanding builder incentives, building strong relationships, and negotiating smartly, you can provide your clients with options they never knew existed. And the best part? You don’t have to list a single property to access this inventory.
