Builders are Peanut Butter, Realtors are Chocolate

 Builders are Peanut Butter; Realtors Are Chocolate [32:30m]: Play Now | Play in Popup | Download

BuilderRadio interviews Brent Forsberg, Brent Forsberg Realty

Remember the Reece’s commercial a few year’s (decades?) back where a guy with a chocolate bar bumps into another guy with a jar of peanut butter, and they both get excited at how the two flavors compliment each other?  (Dating myself, I know.)

Well, builders are like peanut butter; Realtors are chocolate.  Sure, you can both stand on your own, but together you may just be able to create something greater than the sum of it’s parts.

I just coined a new phrase:  The Reese’s Factor.

This week’s guest, Brent Forsberg, a Realtor in Okemos, MI, recently had published an article in NBN that addressed how builders and Realtors can work together.  We asked him to share with us what he sees as the benefits of such partnerships, and how to create successful Builder/Realtor relationships.

“Builders are experts in housing.  Their job is to know the nuts and bolts of construction – everything that goes into building a home.  Realtors are experts in marketing.  We’re trained to get our pipelines full of people, and to get as many people to know of us as possible.  Builders can harness and leverage that pipeline to get potential buyers into their sales centers.

A recent research report revealed that 26% of buyers who learn of a builder’s product will then go directly to meet with a Realtor with the builder’s information.  So, if you’re a builder and not working with Realtors, you may be leaving a quarter of your potential sales behind.

Builders often feel that Realtors don’t know their product, and thus don’t earn their commission.  But I propose that builder’s look at it as a fixed cost.  If you build in a 3% commission and don’t sell through a Realtor, it goes to your bottom line or other marketing streams.  It’s already built in, and you can open yourself up to the Realtor’s larger market.”

How builders can build strong Realtor Relationships
Realtors are just like any other profession – the best ones stay busy and are inundated with calls and offers.  You have to court them to develop strong working relationships.  Here is a 2-month, 11-step sample campaign that can be used to reach out to Realtors and get their attention:

1.  If you feed them, they will come.
Contact your local brokerage firms and offer to bring food to their sales meeting.  “Your first meeting is just a ‘meet and greet,’ so keep it light.  Your just there to introduce yourself, exchange cards.  Bring bagels, cookies and coffee, and keep it fun and light.  The key is to collect business cards and email addresses.

2.  Pick up the phone.
Follow up with a phone call within a week of your first meeting.  Express your appreciation for the meeting and invite them to a personal or small group meeting on site to introduce your product in a more formal manner.  Show your homes, explain your USP, and ask them if they are currently working with anyone who might be interested in the unique benefits your homes have to offer.

3.  Thank You.
Follow up within two days with a ‘thank you’ card expressing appreciation for their time and the meeting and, again, asking for leads.

4.  Progressive Open Houses.
If you have multiple models on site, stage a Realtor open house where one model might have appetizers, one has lunch items, another has desserts.  Keep it informal and fun.  The point is to get Realtors familiar with your product as well as your sales staff.

5.  Weekend Update.
Send out flyers or email blasts with updates on pricing, sales, or any other valuable information to keep your name in front of their eyes and on their mind.

6.  Repeat #5. Here, after six impressions, is when they are going to begin to remember you.

7.  ‘Bring a Friend’ Networking Event.
Set up an invitation-only dinner and social event at your model.  Invite Realtors, but also invite your community members, those already living in and enjoying your homes.  But, there’s a ‘cover charge’ – both Realtors and customers have to ‘bring a friend,’  someone not already living in one of your homes.  Realtors, of course,  will bring with them a potential buyer.

Don’t worry about mixing your Realtor contacts with your community members.  Your customers have already bought into the concept of living in your homes or community, and make great ambassadors for Realtors and guests.  And, the people that they are social with are generally the same type of people as they are – your target market.

8.  Thank You, Again.
Again, send thank you cards out to everyone that attended, along with an invitation to meet with you anytime for more information.

9.  Market Update.
Keep Realtor contacts up to date with what’s happening with your community or current inventory, inviting them again to bring any interested buyers for a personal meeting with your sales staff or to contact you for more information.

10.  Pick Up The Phone.  Again.
Call each contact personally asking if they have any questions regarding your product or if they know of anyone for whom your product would be a good fit.

#11.  Keep in Touch.
By now you’ve had 10 meaningful contacts over a 2-month period.  You’ve made yourself know and familiar, and those with whom you’ve been in contact should now be comfortable hearing from you and working with you.  Keep in regular contact with them, at least once a month, recommends Forsberg.  That way you’ll keep ‘top of mind’ presence and will be at the top of their list when they get a client looking for a new home.

Get Creative.
Other events that Forsberg has seen builders use to develop stronger ties with Realtors include:

• On-site Educational Seminars at different stages of construction to explain and demonstrate unique features that you build into your homes.
• ‘Have Your Cake & Eat It, Too”  Forsberg had a sheet cake decorated like a check for a special commission program whereby the selling agent got their commissions paid when the loan closed instead of at the final draw.

So, where does the money come from?
Why doesn’t every builder embrace Realtors to sell their homes?  Many feel that the commission that they have to pay a broker will make them less competitive in the market place – that if they can offer their homes at 3% or so less than their competitors, they have an advantage.  True, if all things were equal.  But, the Realtor commission is really not a sales cost at all; it’s a marketing cost.

What you get when you work through a Realtor is their marketing – their advertising, networking and client list.  With that in place, you’re own in-house marketing efforts can be reduced – and you still get access to that 26% of buyers that will only buy your homes through the services of a Realtor.

Best of all, since the marketing cost is paid as a commission, your marketing is paid after the sale, not before.  So, you’re only paying for results.  And, since you’ve added it as a fixed cost, if you sell directly, that money goes back to your bottom line.

While there are still headlines that tout how bad the housing market is, buyers are looking for assurance that it’s okay to buy now and help to make the right decision.  Realtors often add an additional layer of trust and buoy buyer confidence.

If you’re a builder, is a Realtor relationship right for you?  Forsberg cautions that not all Realtors are the right fit for every builder.  Find those that are leaders in the market and whose marketing is in line with your product, and start building the bridges there.  Then, explore ways together that will lead to more sales… and higher profits.

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Contact Brent Forsberg at www.ForsbergRealty.com

BuilderRadio Webinar Series #3:

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Featuring:  Tom Stephani, Melinda Brody, Jane Meagher, Meredith Oliver, Jerry Rouleau & Scott Stroud
Registration Opens  September 29 at www.BuilderRadio.com
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Spread the word:  Housing Recession Officially Ends on October 8!

Details to follow in next week’s 100th episode of The Selling More Homes Podcast!

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