Hey guys, it's Ron here, and welcome to blog number three in our series on the seven top ways that home-building is really broken today from a buyer's standpoint. If you follow along with these blogs you're going to learn a lot of information about how you can begin to position yourself and take it back. This is a great opportunity that's going on in the real estate market right now for Realtors. If you're a Realtor today, you absolutely want to pay real close attention to this.
If you don't have a pen, paper, and notepad, grab one and take some notes because it's going to change the way you think about, work with and approach the whole new construction space. I'm going to throw a lot of numbers and good information at you that hopefully will take you to the next level with your career in growing a niche market in residential new construction.
Let's get started. Just to review quickly, the number one reason why home-building is broken for buyers is they can't find the neighborhoods. We talked about how over half of the new home neighborhoods are not listed. They're not find-able. They're very difficult to find.
The second reason is, generally, they can't find most of the builders. About 70% or more of new home builders, whether they're small or mid-sized builders really don't have a strong web presence. We know from NAR, Google and others, 100% of home buyers go to the web early in their buyer journey. Whether it's a pre-owned home, used-home or new construction, pretty much everybody goes to the web to do or begin the research early in their buyer journey. But when it comes to new, you can't find the neighborhoods and you can't find the builders.
One of the things we know about new construction buyers is, by their very nature, they want to know their options. Hey, that's why they're building. They tend to be a little bit more affluent. They've got a little bit more money than others. They're more educated and they want to know their options and that's why they're building.
The third reason and this is where it gets really interesting guys. If I get a little passionate, it’s just because I love you all and I want to see you excel in your career. Homebuyers cannot find Realtors who actually specialize in new construction. Go figure, right? I mean, wow, how hard can it be to find a Realtor? There are so many Realtors in the market, but when it comes to new construction, there's not that many. If you stay till the end of the blog, I'm going to tell you what our estimate is on how many we think there actually are and how you can begin to step into that role. Homebuyers can't find the Realtors.
What's interesting though is if you go to any broker's website you'll see it looks like every Realtor is a new construction specialist because they tag their name with it, but maybe not so much. There's more to being a new construction specialist than just tagging your name with it.
So how do the numbers breakout? Well, first of all, let's look at a big number. Let's look at a high-level number, and these are not my numbers by the way. I haven't tracked every new home transaction in the United States, but I will tell you this, we dive deep into the data every day, every week, every year.
We're really looking at who are their sources and what are they saying about it? What they say about new construction is, and here's a good thing to write down, in 79% of all new construction transactions there's a Realtor involved. Across the United States, of all the people that build or buy a new home, 79% have a Realtor that's involved. Let's round that up to 80% because that's easier for me to remember it. There is a Realtor involved in four out of five transactions.
You might say, well Ron, how can you say that Realtors aren't specializing in new construction if there’s a Realtor involved in four out of five transactions? Well, here's where it gets interesting because we have dug down into the details of who's doing the new construction transactions in a lot of markets.
Let's just pick a market, Houston, Dallas, Tampa, or any others that we've looked at. We look at all the new construction transactions that occurred and put them in a spreadsheet. Let's say there were 3000 transactions in a given market. If you look at who's doing the sales, it’s kind of like this:
You got a very small handful, three, four, five, maybe eight Realtors or teams who are just cleaning up. I mean, they're doing a ton of new construction and the rest of the 3000? One realtor did one, this Realtor did one. Nope, this one did two. This one did one, this one did one, one, one. Oh, three. And that's kind of how it breaks out. You've got a very small number who have figured this out and they realize that there's a great opportunity that is untapped by most Realtors and they're figuring out how to go after it.
One of the things that we've seen is you can too. I'm going to talk to you about that in just a minute. Pretty interesting, right? There's a lot of new construction opportunities, but there are very few Realtors who are truly going after it. That's kind of how that breaks out at a high level.
Here's another interesting thing. Go out and survey the builders and I really recommend that you do. I'll talk to you about this just a little bit more in a minute here because there's a very specific way you can do this. Ask the builders, "Hey John, hey Jill, hey Joe, how many Realtors would you say in our market actually specialize in, are knowledgeable and passionate about new construction and new home building?” and then shut up. Don't say anything else. Next guy who speaks loses. Just listen and if anything, take a few notes. “How many Realtors would you say in our market actually specialize in or are knowledgeable and passionate about new home building?” and watch what they say.
You could be in a market where there's a 1000, 8,000, or 15,000 Realtors and the answer is usually some variation of five, maybe. I think I had one builder say I can count them on my hands and my toes. That's pretty shocking from their perception. We can say they're just the builders, they don't know. But you know what? They probably do. Perception is everything when it comes to working with customers, potential customers and prospects. Now from their perspective, they're looking at Realtors and saying, there's not very many who are really going after new construction or learning it and bringing value to it. Now, if I were in your shoes and I'm not, but I really recommend that you take this stuff to heart that I'm sharing with you because nobody else is really sharing it that I know of.
It is an enormous opportunity if you grab ahold of it. Every market these days is just saturated with Realtors. There are so many licensees. They're cranking them out 24 hours a day, seven days a week. I think NAR says there's 2 million agents and Realtors now in the United States. And the numbers going up and everybody's fighting over the scraps that fall off the table for a transaction and commission and the next room over, there's a feast that's sitting there and nobody's at the table. Think about that because there's a very big opportunity.
Now if we shift away from the builders for a second, let's talk about the buyers. You can go have that same conversation with the buyers and ask buyers about their experience with Realtors and new construction. What buyers will say are things like, we've never actually had a Realtor who's offered to walk us through new construction. In fact, we've surveyed many buyers on this and buyers will say things like Realtors tend to discourage us from building new. That's just phenomenal to me. If they want to build and a Realtor says, “I'm not going to get my commission check as early that way.” It’s wrong. If that's what a buyer wants, then they deserve to have what they want. Probably the best thing we can do if we don't want to deal with new construction is to refer them out. Find a Realtor that you can partner with and refer them out to. Somebody who's going to take care of them from a new construction standpoint. Those are the kinds of things that we hear from buyers. Perception is everything now.
What we find when we start to drill down into the numbers of what the buyers are saying, what the builders are saying, what the numbers are saying is,, it is probably less than one-tenth of 1% of Realtors who specialize in, (not that they do all new construction), but really make a niche out of it and want to go after it as serious part of their business. It's probably far less than that, to be honest. It may be more like, one-50th of 1% but if you have one-tenth of 1% that's one in every one thousand. That doesn't mean that this Realtor, that Realtor or a thousand other Realtors have one new construction listing. But the people who are going after it, less than one in 1000.
Here's an opportunity where you can step into this space and begin to learn and begin to differentiate and begin to provide more value. Immediately or very quickly, your competition starts falling away. All of a sudden you don’t have 15,000 competitors, you've got about 10 or 20 because nobody else is really providing that level of quality and value that you can.
The last couple of things, and then I'll wrap up here. Builders want to work with good quality Realtors who understand new construction and who understand their business. A lot of Realtors will say, that's just not true because I talked to a builder, I've talked to five builders and they would rather do away with Realtors. A lot of times there's a bad mojo between builders and Realtors.
From their standpoint, what they're seeing from us as Realtors is everybody's doing basically the same thing. And there are very few people who are providing any kind of value that they're looking for. Does it mean work harder? In some cases, yes. It generally means work smarter.
Here's what it doesn't mean. In order to specialize in new construction, it does not mean that you need to be a 10-year tenured Realtor. I've seen many Realtors who step into that space who have little or no experience. They're brand new, but they're focused and they step in there and they start to get wins for themselves. And you can too. So it's not about tenure. It's not about having a big team. It's not about having a big marketing budget and you don't even have to be married to the builder, although that could help. You don't need to know how to build a house.
What you do have to do is be focused, ready to learn and you have to be committed. So how do you learn this stuff? Bottom line is, there's this enormous opportunity. How do we begin to specialize and get some focus around it? I highly recommend that instead of going in and trying to get a transaction or a listing on your first call, which is absolutely not the right way to do it, the approach that. you want to take is you want to learn. You are out there initially to learn. You're going to start meeting with builders and developers. I especially recommend meeting with small and mid-sized builders and developers and interview them.
There are really four different types of interviews you can do now. We can't get into all those right now, but there's one in particular that I really think that you should do. Interview the builders and developers about you, about their perception of your role or the Realtor role in general. There are eight or ten questions that you can ask. If you want those eight or ten questions, reach out to me. I'll type them up and you can download those and have a cheat sheet that you can walkthrough.
And I think that you do this at least 10 times. Are you going to get it done this week? Probably not. But you need to commit to doing it. There are two really fundamentally important questions that you're going to ask. And one of them is a question that I asked earlier. Ask the builders, Hey John, how many Realtors would you say in our market actually are knowledgeable and passionate about new construction? How many people would you say really truly specialize? Don't try to feed them the answer. Just listen and write it down.
And then the final question that you want to ask is this, Hey John, let me ask you this. "If you are going to partner with a Realtor, if there was somebody that you really genuinely wanted to partner with to market your homes, what would that Realtor look like? What would they have in their experience that would make them somebody that you would consider marketing with to sell more of your homes?" Then just shut up and listen and take notes.
Listen, guys, I want to tell you something. This is an enormous opportunity. If it wasn't, I wouldn't be spending so much time trying to share this with you. The buyers deserve to have a fiduciary, somebody who is a trusted guide that they have confidence in that can walk them through the new construction process. I would love to help you out with that. I would love for you to check it out and learn how to be a new construction specialist because it can absolutely change your career.
I'll tell you one interesting thing that just happened yesterday. A builder told me what we are teaching nobody else is teaching. I don't know if that's the case. I'm not saying that we know everything. We don't. We're learning a lot and we are seeing a lot of Realtors that are grabbing a hold of these concepts and they're going out and just exploding their business. And I want that for you too.
If there's any way we can help you, let me know. We do have a free download if you haven't seen this yet. There's a new e-book that we just released that goes through all seven of these ways that new construction is broken. It's called the Seven top ways that new construction is broken for buyers. You can find that at http://www.newhomenicheblueprint.com. I would love for you to download that and see if you can get some value out of it.
Hey, my name is Ron Williams. I'm the founder and the CEO of a web platform for Realtors, new construction buyers, builders, and developers called Hoodle. It's at hoodle.com and I would love for you to check that out as well. Thanks for reading. I hope you got some value out of it. And next week, be watching for blog number four. God bless. I hope you guys have a great evening.
Download our FREE e-book at www.newwholenicheblueprint.com.