New construction has been a passion of mine for decades. I was so passionate about this phase of the business that I, too, had my Massachusetts Builders License for 20 years, along with having completed all of the “major courses” at a local college for a Building Construction degree. I already had a degree in Biology and was not interested in another degree, only the knowledge available by enrolling in every major construction course.
Builders speak a different language. The language of construction is not a typical one that everyone understands. It was a necessity to learn “their language.” Knowledge of the product not only sells the product, but it provides a “comfort zone” for builders who want to hire an agent to market the product.
I plan on writing a series of blog posts on new construction. Every topic related to real estate in general deserves and demands to begin with education. When a listing agent markets a resale home, what you see is what you get. When a new home is pre-sold before the shovel hits the dirt, the listing agent must have a knowledge of the materials and often the methods used to build the home.
This is the major reason for builders refusing to give listings to real estate agents. Most real estate agents are not well-versed with the methods and materials used. Without that knowledge, it’s impossible to properly sell the product.
For a builder to wait until the home is complete to market it is an expensive proposition. There’s a per diem charged by the bank for the construction loan. The majority of builders want to have the home under agreement before the home is finished. The per diem during the construction period is factored into a builder’s formula before the lot is purchased. Unknown factors are not desirable.
When a builder is comfortable with the ability of the potential listing agent to clearly explain the facets of the home to be built; the materials used to build; the changes that may or may not be made to the original plan; and a number of other factors that are pertinent to constructing the home, the listing will belong to that agent.
The builder’s comfort zone with reference to the agent is the determining factor of whether or not a listing is secured, and it all begins with knowledge of the product.
My first thoughts on the topic of new construction. Learn the details of the business.
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Blog Post #1 on the topic of New Construction
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