Working with a builder as a real estate agent can be a steady stream of business and it can be lucrative. It can also have some downsides and in this podcast, we will explore both the pros and cons of working with a builder in real estate. If you want to represent a builder, then it will come down to building a relationship with them. You do this by standing out, knowing their product, knowing what they want, and constantly following up. Then, when your moment comes, be ready to over-deliver.
Do you find it a difficult proposition to get an edge over other real estate agents?
Setting your foot in the real estate world as an agent can be tough at first. You need to determine the pillars of your business. These are the main strategies you intend to use to generate leads.
One pillar you can use is working with developers. In this article, you’ll learn how to work with builders as a REALTOR®️ to get listings.
Working with builders comes with various benefits. Not only do these listings come with the potential for multiple deals, but they can also add an impressive amount of buyer leads from your listing inventory.
Let's dig deeper to discover strategies that have helped real agents working for a builder get listings.
You can also watch this video to build a relationship of trust and secure exclusive agreements with some of the potential clients.
Before we delve deeper, it is important to know the key terminologies used in real estate.
What is LTV to CAC Equation in Real Estate?
LTV to CAC ratio is the first step in the customer acquisition equation. Before you invest time, money, and resources into acquiring customers, you have to understand your customer acquisition costs (CAC), and customer lifetime value (LTV).
Here is an article that breaks down the LTV:CAC equation in detail.
The customer lifetime value (LTV) is the total revenue generated by real estate agents from one client or builder. LTV is part of the overall equation that helps a company forecast its cash flow and profitability across various business scenarios.
To better understand customer lifetime value (LTV), you first have to understand customer acquisition cost (CAC). LTV is the cumulative sum of customers' purchases over time, and CAC is the total amount spent acquiring those customers. Thereby creating the equation LTV:CAC.
The LTV to customer acquisition costs (CAC) ratio is a key metric that real estate sellers use to calculate the ROI of their lead generation and marketing efforts.
The average SAAS Company has an LTV to CAC ratio of 4, which means for every $1 spent acquiring customers, that's $4 in profit. However, real estate agents typically have a higher LTV to CAC ratio, especially with builders. This is because builder leads can result in multiple transactions.
For example, if a real estate agent spends $1,000 on marketing to generate 1 seller lead, and you secure a builder that results in $10,000 in commission, then the agent's LTV to CAC ratio would be 10:1.
Here is where the math gets interesting! Even if you spent $10,000 in marketing and a builder was able to offer you upwards of $50,000 in commissions over the course of your working relationship, then you still have a strong LTV:CAC of 5:1.
This indicates that the real estate agent generates plenty of revenue for each dollar spent on acquiring new customers.
But, how do we market ourselves to home builders?
How to Market New Construction Homes as a REALTOR®️
As an agent, it can be hard to reach clients when you are wanting to become a new construction REALTOR®️. The most important thing to get an edge over other agents is to capture a potential builder’s attention.
Investing in marketing new construction homes as a REALTOR®️ is one of the most efficient ways to get new clients, sell more of your listings, and increase your listings for free.
Don't be left behind as other REALTOR®️s reap the benefits of investing in marketing new construction homes. With the mentioned strategies, you will ensure that builders know your services (brand awareness) and that you stand out in a competitive market.
1) Create a Landing Page
As a new construction real estate agent, it is important to have a process in place to get new listings from builders. An ideal way, to begin with, is to create a landing builder page on your website for each builder you dream of getting listings from. It is a unique proposition to sell your service because it provides builders an insight into your research work about themselves.
On your landing page, be sure to include:
You can create a landing page for your builder. Your builder's introduction should include their name and logo; for this, you can take help from LinkedIn or their website.
At this point, you can also share some highlights of what sets them apart.
At the bottom, put links where interested prospects can schedule a time via Calendly or any scheduling tools.
2) Cold Emails
You've tried cold calling to generate real estate listings from builders, but it's difficult to get through to busy people.
Cold calling is an ineffective practice for real estate agents - it's expensive and doesn't produce results. But cold emailing is a different story.
Cold emailing is a more effective way to reach builders because it allows you to send a tailored message directly to their inboxes. You can track how often your email was opened and how long it was viewed, so you know that your message was seen.
If you're still wondering how to work with a builder as a REALTOR®️ to get listings, then here are some tips to grab their attention with your cold emails:
One way to get more seller leads is to make sure your cold email subject lines are top-notch. With a strong, attention-grabbing subject line, your email is more likely to be opened and read. Pro Tip: Use a first name merge in the subject line of the email in order to increase CTR (click through rate).
One of my favorite cold email subject lines is [Builder’s First & Last Name] <> [Your Name]. This tends to convert well.
It's important that your cold email is personalized and addresses the pain points that your prospects care about. By doing this, you'll be able to build trust and credibility with builders, which will ultimately lead to more listings. Ask yourself, what are builders currently struggling with. Don’t offer a solution but instead, insert 3 pain points in point form.
“I’m hearing from builders that they are looking for
Better margins on their sales
Land acquisition opportunities
A differentiated edge against other builders”
When writing a cold email, it's important to include a call to action (CTA) that encourages your prospect to take the next step. In this case, my aim is to have them go to the landing page and they can book a call directly with you using your booking link.
Don’t get discouraged if you don’t get a response. It’s highly unlikely that a builder converts from just this step. All we are trying to do is start building familiarity.
3) Connect on Social Media Account
No need to get discouraged if you don’t receive a response. This is an 8 step process giving us plenty more touchpoints before we throw in the towel.
Reach out to your prospect builder on social media accounts, especially LinkedIn, after sending cold emails with a 2-hour break. This will help you maximize the time that they have spent finding and reading your email, increasing both chances for connection and conversion rates.
The time delay here is purposeful. We want to let the builder know we are actively thinking about their business. Receiving an email followed by a LinkedIn or social request in 2 hours tends to increase the chances of them remembering you.
4) Follow-Up Email
Once this sequence has begun, we need to continue to build familiarity and brand awareness. One way to do this is to send a follow-up email after your initial contact and social media connection.
To get listings from builders, you'll need to send them a follow-up email after two days of the first cold email. But, like always, avoid pitchy sales tactics. Instead, focus on building relationships and providing valuable information to help their decision-making process.
In this email, we are directing them back to the landing page and stating that “even if they aren’t looking for an agent, chatting for 5 minutes will create another connection in the marketplace and you can keep their real estate team honest.”
5) Gift Basket
Your prospects are busy people with even busier schedules, so you need a unique strategy to show your (friendly) persistence.
It's important to build a relationship with the builder before trying to get listings from them. A gift basket is an ideal way to do it after you've followed up with them via email.
Your gift basket should include a note with your contact information, so the builder knows how to get in touch with you. In addition, it's important to wait two days for a response from the builder before sending the gift basket.
Pro Tip: Ensure the basket is local. Builders want to support the community and having familiar local products in the basket signals your desire to do the same and makes your gift memorable.
6) Improve Your Visibility
If you're not visible, you're not going to get the listing. You need to be on the same social media platform as your prospect and be commenting on their posts.
If you are not getting a response after sending them the gift basket, try commenting on one of their posts. This will show positive interaction between both parties and increase your chances for conversion.
The rule is you’re not allowed to simply “like” or “react” to one of their posts, you’ll need to comment. This helps you stand out from others on social media.
Alternatively, we can add them to another social media network if they haven’t posted recently.
7) Offer Value
Next, you will send another follow-up email. This time, you will lead with market data. Alternatively, this email could be an offer: free video marketing for any of their current listings, suggested updates to listing descriptions, or sitting an open house for them.
By offering builders this type of information and value, you'll be able to position yourself as a dependable resource. Additionally, you'll be able to build trust with builders by showing them that you have their best interests at heart.
8) Improve Your Visibility
If there is no response, you will do another social media touch. Again, we are commenting on one of their posts or we can add them to another social media network.
9) Breakup Email
This is the final step in the sequence. This will mark 8 touch points which is the number of interactions that is typically required for conversion. As such, you will now send a breakup email letting them know you won’t reach out again to spare their inbox
Subject: Closing The Loop
Body:
Hi [First Name],
Although I believe in persistence, I also never want to be a bother. So, at this point, I’ll close the loop to avoid cluttering your inbox.
If you ever need something in the further, don’t hesitate to reach out.
[Your Name]
10) Email Newsletter
One of the most important things as a real estate agent you can build up a database of leads. Add the builder to your email list if there has been some communication but ensure you comply with anti-spam rules.
In your breakup email, you can send a link to a form that will subscribe them to your email newsletter. In addition, you need to make sure that your newsletters are interesting and engaging; possessing plenty of useful information for your readers.
Follow Three Ms that Work for Every Builder
When builders are looking for a REALTOR®️ to partner with, they always keep an eye out for the three Ms: margin, marketing, and magic.
Margin: For any business, generating revenue is essential. Margin refers to the ability to generate money on each transaction. For builders, this is their number one priority. Speak to this pain point and their ears perk up. However, don’t be quick to reduce your commission. Instead, display the value you can create. There are many cases where a reduced fee makes sense when a builder is supplying numerous transitions but take this on a case by case.
Marketing: It is all about getting the word out there and reaching potential buyers. What are you willing to do for marketing that other agents may be neglecting?
Magic: Finally, an oomph factor is needed by every builder. It refers to that little something extra that helps them make the property stand out from the rest.The builder wants to present the best product in the eyes of the consumer but also as an edge against the competition.
As a REALTOR®️, it's your job to communicate all these three things. By demonstrating your expertise in the market and providing a competitive margin, you'll be able to show builders that you're the perfect partner for their next project. Add in a little bit of magic, and you'll have them hooked.
In this real estate agent training podcast, you will learn how to become a builder’s real estate agent.
Podcast Transcript
[00:00:00] Hello and welcome to Rev Real Estate School. The podcast with quick tips and actionable advice to help you sell more real estate in today's world. And now your host Michael Montgomery.
[00:00:11] Hello and welcome back to Rev Real Estate School. I'm your host Michael Montgomery. Today we're talking about an exciting topic we're talking about how you can land builders and start representing them with their new construction products.
[00:00:26] This is something that's very enticing to a lot of real estate agents new growing experienced working with a builder does and can seem like it's just an endless source of business and it definitely can be. But it can also have some hurdles. So in this episode we're going to first talk about the pros and cons of working with new construction and then how you can go about landing your first builder. Let's jump into the pros and cons.
[00:00:56] First off pros. They seem pretty obvious. It's a steady stream of business. The other pro is you can also get a lot of buyers when you're representing new construction products if they're looking on the MLS for properties and your listing comes up and you're representing the developer or the builder. Then of course you could also end up landing yourself a few buyers. Another pro is builders know builders. So once you start to get your foot in the door and you start doing a great job for certain builders they talk and it's usually a pretty small community even if you're in a big center. There is still a pretty small community of developers doing the majority of the business so they end up talking and if you're doing a great job you can end up getting more and more business from it.
[00:01:40] Now let's jump into a few of the cons and these are oftentimes overlooked because it just seems so appealing to represent a builder and to have that continuous source of business. But it doesn't always work that way. Some developers have very strict schedules on how often you have to be doing open houses. The other thing is oftentimes they're not paying the same full commission amount they can. That's not to say they won't. But oftentimes they are looking for some level of a discount because what thereafter is return on investment. I actually know some agents that don't even get paid when working with their developers what they do though is they treat this as an opportunity like we said in order to give buyers.
[00:02:23] OK. So you're nodding your head you're saying yeah I get it totally pros and cons. Got it. Now how do I go about landing a developer? Let's jump into this. First off, it all comes down to a relationship. It's like anything else in our business. It will all come down to the relationship they're able to build with the developer. Now you probably do this but how do you go about starting to build a relationship with a developer who's probably receiving weekly if not daily e-mails male phone calls from other agents that are trying to represent them. What you need to do is you have to build your relationship in a little bit of a different way. And you also have to play the long term game. This is not going to be something that you're going to do overnight but over the course of time it can end up being very very lucrative.
[00:03:07] So first things first you're going to have to make a list of the developers and their mailing addresses. This is the very first thing you need to know who they are. You need to know their product we're going to get into knowing their product. But first off you just need to know who they are from there. You do want to start building the relationship but you have to start by standing out.
[00:03:25] You can't just send a normal e-mail a normal phone call or a normal letter in the mail. 99 Out of 100 that's going right into the garbage. You have to stand out and I'd recommend doing this right off the bat is the first thing that you do you should send them something in the mail that will stand out. You need to be memorable right from the beginning. Now you want to choose something that matches your brand but also something that will be a little bit different. You can even go to Pinterest and type in "pop by gifts for real estate" and there's going to be a ton of different options there. A builder that I recently met with said that the most memorable thing that they received from an agent was a it was a pill bottle and in the pill bottle there were just skittles and basically on the pill bottle that said if your sales are stressing you out take a few of these and call me. I thought it was absolutely genius. So this is a bigger builder that said that that was one of the most creative things that he saw. Then you deliver your pop by gift whether you do it in person or by mail that doesn't really matter especially if they don't know you right now. Just make sure that the first thing that you send is memorable.
[00:04:25] From there, you're going to get to know the builder's products you need to know their models you need to know what it is that they do you need to go their sales centers. Now if you're serious about trying to land a builder developer then I'd recommend sending out two to three of these pop by gifts a week and then also focusing on learning their products. Are those two or three builder developers that week. Reason being is you're going to follow up after you've sent your pop by gift. You're going to follow up by phone e-mail that doesn't really matter either to be honest at this point all you really want to do is follow up make sure that they received it. Now you know their product you've sent them something that really makes you stand out.
[00:05:02] Next, you have to understand what they want. What a developer wants is they want buyers and they want a return on investment so you want to keep that mindset and tailor your conversation towards this. You do not want to tailor the conversation towards you you want to make it about them and how you can find them buyers and how you can get them the highest return on investment.
[00:05:23] So after that you've sent them the drop by you followed up with them you know their products you know what they're looking for now is where the rubber meets the road. This is where the consistency comes in. You're going to follow up and I'd recommend following up every single month. You're going to handle over them a market report on what's happening in new construction from the MLS. You're going to give them a market report on the areas that they are working in every single month. I recommend you take one day and you go hand deliver it if you can't hand deliver it send it in the mail. That's totally fine. But ideally your hand delivering it. So you've made a name for yourself. You've stood out from the start and now what you're showing is you're showing a level of consistency. And this is extremely important from a builder's perspective. They want to make sure that you are consistent and they're probably already working with an agent in your market you just want to be the one that is next in line for when that opening does come up or when they need somebody else to come and help out. Just like working with leads and working with your database you want to stay top of mind but with a builder and developer you do want to make it more about the market and what's happening and you need to show that level of consistency. That in itself is so powerful is just showing up over and over and over again and you will end up landing one.
[00:06:41] Finally it's going to be the pitch. So when you hear about a new project and acquisition they made or if they're starting a new project or even the current projects that they're working on you want to reach out to them and see if they need any help. You want to continue to show that yes you are consistent and you're delivering them value every single month by way of a market report but you're also going out there and you're hunting for the business. So you have to ask them for the business as well off the start. There's a very good chance that the answer will be no and that's totally fine continue to deliver them the consistent value over and over again and as you start to see more of their projects come up reach out again and ask them again continue this process over and over for as long as it takes and you will eventually land a builder. Now it can take some time but maybe after a year or so you get a maybe out of them instead of a no. This is your time where now you can go in you can present to them you can let them know what you're willing to do and ask them to take on even a small amount of their inventory take out one of their properties and then over deliver like crazy over deliver if they want a report every single two weeks make sure you send one every week if they want an open house once a month. Make sure you're doing it every two weeks. So over deliver and you will continue to see that business flow your way. So to recap right off the bat you need to get a pop by gift that really helps you stand out. You then have to follow up know their product and know what the builder or a developer is looking for which is Yuji buyers and are why then you need to consistently follow up with monthly market reports on what's happening. You can even insert more pop by gifts if you're doing those for your clients at certain times of the year too. But you want to show consistency that is very important. And then when the time comes and you see a project come up or you hear about an acquisition make sure you reach out to them congratulate them and ask if they need help with that project when they do say yes. Make sure that you over deliver like crazy so you can continue that relationship. That is how you land a developer or a great builder in new construction. Thank you so much for listing this episode. I really appreciate it. Remember you can ask a top producer anything all you have to do is write and review the show. Head over our Web site Rev real estate school dot com. Let us know where you did that. And a top producer gives you a call. Thanks again for listening and we'll see you in the next lesson.
[00:09:06] This episode of Rev real estate school has come to a close. Thank you for tuning in. We'll see you back here. Lesson.
