How to Find the Right Builder and Grow Your Business with New Construction

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About This Episode

The latest signs say we’re due for a surge in new construction as governments big and small look to balance the nation’s housing supply. This week on The Walkthrough™, agent Danielle Seifert says now’s the time to consider making new construction a priority in your real estate business. She shares specific advice, based on her almost 20 years of working in new construction, on how to find the right builder and create a profitable, long-term relationship.

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Links and Show Notes

• Danielle’s website: DanielleSeifert.com
• Connect with Danielle: Instagram and/or Facebook
• Join our Facebook mastermind for The Walkthrough™ listeners
• HomeLight’s Agent Resource Center
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Full Transcript

(SPEAKER: Matt McGee, Host)

Matt: If I asked you to brainstorm five new ways to grow your business, what ideas come to mind? Five new ways to grow your business.

Radio ads? Maybe after last week’s Walkthrough™, you’re gonna start a blog on your website. Would you sponsor a local sports team, for example? Join a B&I group? All of those are potentially good ideas.

Would you consider this?

[sounds of new construction]

New construction. Would that come to mind if you were brainstorming ways to grow your business? With such an emphasis right now on building more homes across the country, new construction might be just the opportunity you need.

A veteran agent in Des Moines, Iowa, has been working new construction for most of her 19-year career. She gets upwards of 90% of her business that way. And it’s a very successful business. Today, she’s gonna teach you how she does it.

This is “The Walkthrough™.”

(INTRO MUSIC)

Well, hello there. My name’s Matt McGee. I’m the managing editor of HomeLight’s Agent Resource Center. Welcome to “The Walkthrough.” This is a weekly podcast, new episodes come out every Monday. This is the show where you’ll learn what’s working right now from the best real estate agents and industry experts in the country. At HomeLight, we believe in real estate agents. We’re here to explore how great agents grow their business, stand out from the crowd, and become irreplaceable.

New construction gets a bad rap in some real estate circles, maybe in yours. There are valid reasons why some agents don’t like working with new construction. The transaction takes longer, so that means it takes longer to get paid. You usually have to sit a lot of open houses and that limits your time to spend with other clients. Different builders have different processes; it’s generally not as straightforward as selling an existing home. And sometimes clients might blame you for the builder’s mistakes.

It’s not for everyone, and that’s okay, but is it for you? Maybe. Are you looking for new ways to grow your business? Probably. Here’s the deal, if you find the right builder and develop a great partnership, new construction can be the foundation, pun fully intended, for an incredibly successful real estate business.

Just ask Danielle Seifert. Danielle got her real estate license back in 2003. She’s worked new construction for almost the entire time since then. Now, in the early days, she worked with a few different builders, but for the past decade, she’s worked with one builder. They have a great relationship, and it’s a win-win for everyone involved.

Today, Danielle leads a team of 18 agents. They did almost 400 transactions last year. Danielle did 124 of those herself, totaling almost $50 million in sales volume and more than a million in GCI.

She says about 70% of those were new construction transactions. Then another 20% were tied to new construction because a lot of her buyers hired her to sell their homes first.

Now, on today’s show, Danielle is gonna explain why new construction is such a big part of her business. She’s also gonna share how you can make it a big part of yours. So, listen for Danielle to talk about how to shop for the right builder. We’re gonna spend a lot of time on this because it’s really important to work with the right people. She’ll talk about how to earn the builder’s trust and make sure the builder trusts you. And we’ll also talk about how to balance the builder’s needs with your buyer’s needs.

So all of that is coming up today. As the conversation begins, I’ve just asked Danielle why she got into new construction and why she still does it almost 20 years later.

(BEGIN CONVERSATION)

Danielle: You know, that’s my passion. And once you find your passion, I don’t see any reason to do anything different. Obviously, resales have to be a part of that because people have resales to sell and I still…you know, and to get into their new construction, they have houses they have to move out of. And I love that whole process because I’m a relationship person. So, helping them do that is part of that and I love that.

But the new construction, the end goal of getting into their new house, and the whole process involved in that, that’s what I love to do. That’s what gets me excited. That’s what gets me up every day. So, that’s where I’m sticking to. And anytime I find myself maybe too resale-heavy in my day-to-day, I can tell that that’s not where I’m meant to be.

The whole trust goes round and round very well when you’re working with someone that you know at the end of the day is gonna take care of, not only the home that they build, but take care of the person that you are handing those keys over to. So, I have that going for me. The process is what I really enjoy because I know it so well. So I think when you know something really well and you’ve done it for so long, it just becomes kind of second nature. So, I think it’s the process of it all. And I get giddy about it still.

Matt: So imagine I am a successful agent, say I’ve been in the business for 10 years or so, and I am doing, you know, maybe 25, 35 deals a year just by myself, all resale…make the case for why I should consider getting more involved with builders and new construction.

Danielle: Well, first, you’re gonna have to want to. Don’t do it just because you think it’s good money. I would say if that’s the only reason you’re gonna wanna do it, like, stop. I always advise all my…you know, I have 18 agents on my team right now, and chasing the money is definitely not how I teach or how I mentor my agents. It has to be a passion of yours. I’ve said that again already a few times.

But if it is something that you are passionate about and that you feel like new construction is something that you’re led to do, I would embed myself in the builder process, their team, their culture, see if that’s a fit for you, see if that’s something that you would feel good about representing, something that you could pass on to the buyers and feel good about that. Because when you trust them, you’re gonna enjoy it. And then that’s just gonna come through in the whole process.

That would be number one, but then you also need to understand how to sell new construction, right? So it’s not the same thing as a resale. There are different processes. And especially right now with building costs and all the different timelines that we’re experiencing. We’ve gone through so many different waves with new construction. There’s so much more to understand between escalation clauses, HOA, warranties, negotiating upgrades, all those different things.

So, you can’t just dive in and expect to be an expert right away. So, I would shadow somebody and get to know the ins and outs of it. So, I mean, I could go on and on about all of this, but that would be where I would start for sure and see if it’s the right fit for you.

Matt: Let’s unpack a bunch of what you just talked about there in terms of making the case for working new construction. You talked about basically like shopping for builders. What are you looking for when you do that?

Danielle: It’s kind of like dating, kind of, I think…

Matt: Is it?

Danielle: Yeah, I think so. Because there’s been times I’ve worked with different builders leading up to the builder that I’ve worked with now for gosh, it’s over 10 years now, which all of this dates and 19 years and stuff ages me. I still feel like I’m 21. But I’m clearly not. The builders that I’ve worked with in the past that, you know, maybe didn’t work out, you know, and they’re very successful builders, but sometimes it’s just a personality thing. Sometimes it’s the hours that they want you to work open houses and it doesn’t work out right for the age of your kids and your family commitments. And there has to be that work-life balance. And those are certain things that are not negotiable, right?

So, it has to be their process, their building process. You have to believe in that. You have to be able to buy into that because you’re the one in the end that has to sell that. So, I just think you have to look through the whole process of what the builder has put in place.

On the flip side, they have to be able to believe in you and what you are selling and what you are bringing to the table, where if you provide feedback on something, if they’re not going to take feedback and they’re not going to listen to you when you say, “Hey, this is what buyers are wanting right now, or this is what this buyer is saying. Can you make an adjustment?”

If you feel like you’re not being heard either, like, it has to go both ways. And if you don’t feel like that’s a good fit for you, then you have to be okay walking away from that. When I say it’s a relationship, it has to be a good relationship both ways because real estate is a lifestyle. And it’s not an 8:00 to 5:00 job and we give up a lot of time, sometimes away from our families or we’re on our phone, as our spouses know, as you know being the spouse of a Realtor.

Matt: Yep, absolutely.

Danielle: I think if we are sacrificing time away from our families, we have to be doing it for good, healthy relationships and make sure that we don’t feel like the person on the other line takes us for granted. And I want it to be a win-win for both sides.

Matt: What I think I’m hearing is that you’re looking for a relationship where it’s a partnership between you and the builder, as opposed to maybe a relationship where they look at you as if you are working for them. You’re more working with them.

Danielle: Yes. And I have to be able to provide value. Like, I want to be bringing value to the table as well. So that’s why I think it’s super important to be learning as much as I can. Like, you know, as far as I was talking about the HOAs and the warranties and how to build, and knowing their process, and follow-up and feedback, and letting them know what clients are saying, and always being on top of all the activity in my development, straightening up signs, holding open houses, and knowing where to be when so that I’m in front of those clients, and getting people through the houses, and getting agents there. And there’s just constantly things that I’m doing to provide value. And if I’m not providing value, then I’m not good with them either.

Matt: You referred to it as sort of like dating. Now, it’s been decades since I’ve dated, Danielle. But I remember, back in the day, you would go on a date and you’d have certain questions that you wanna ask the date to find out more about them. When you are shopping around for builders, what kind of questions are you asking them and what kind of questions do they ask you?

Danielle: They’re gonna wanna know, have you ever sold any of my houses? Have you been through my houses? You know, what’s your opinion? And what would you change? You know, so they’re gonna wanna know that you know their products and what your opinion is of it and, you know, what feedback you have. So I think that’s very important. Don’t go in there and not have knowledge of their homes. So they’re gonna grill you on that. So I think that’s super important.

And have some constructive feedback for them. Don’t just go in there and be like, “Oh, it’s perfect, and don’t change anything” because, I mean, they’re also not naive. So I do think that they’ll want…again, provide value, but also don’t tell them to change everything, too. So maybe work into that.

And then questions for them, if I was a new agent, again, it’s been years for me, and I mean, I do still obviously provide feedback and it’s a working relationship that I have with my builder. Thinking back of what I would’ve asked back then, you know, it would’ve been process-related, what they would expect on open houses, what they maybe haven’t seen from their current agents, and what they, you know, would like to see. You know, those sort of things I think would be good ways to start a good conversation with them, and then those would lead to more questions probably.

Matt: And you represent just the one builder right now. What are your thoughts on an agent that might wanna represent more than one builder? Is that something…?

Danielle: Yeah, I have done that. So there was a time where I had more than Caliber. And it was fine. I’m at the point in my career where I like simple. I’m loyal to where leads come in at. So that’s how I would suggest handling that type of situation. So, let’s say you had an X, Y, and Z builder, and you got a lead that came off of X’s house. So that is what you try to sell that lead. You try to sell them X’s house. But if that does not happen to work for that lead and, you know, you did everything you could, and there was not a custom opportunity, and none of the spec houses that X had in inventory worked, there’s a possibility that Y has something in inventory, right? So, then that would work out that way.

And vice versa — that could happen that you could take a lead from Y and sell it to X. So it did work out very well for my builders at that time that it all evened out just fine. And they trusted me to always be honest with where leads came from and do my best to sell that lead to that source first and understood that I would never do anything dishonest that way. So, that’s not how I roll.

Matt: So, I mean, it’s possible that, you know, you can rep more than one builder. You can do it successfully, it sounds like you just need to be more careful, be aware of some of the potential minefields of how you work with leads and all that sort of stuff.

Danielle: I would just track where your leads come in. And I mean, if you are ever questioned, then you have tracking of it and show what you tried to do. But again, if you’re fortunate enough to have more than one builder, you probably set yourself up to be a Realtor that is respected enough to maybe not get questioned a whole lot. Also not think of yourself as too cool to not get questioned either because, I mean, none of us are above that either.

Matt: Exactly. Talk to me more about the importance of education and sort of doing your homework on the builder.

Danielle: I probably can’t, I mean, overstate that because, I mean, builders are very proud of their product and they put a lot of time, energy, and lose a lot of sleep over what they do, from planning to foundation to the design. And they have a lot of risks. They have a lot more risk than we do. Any research you can do on what they’ve sold in the past, where their growth is gone, so from the numbers to the actual product, I think the ins and outs are extremely important. And I think you do it not just to impress them, but just to truly know where they’ve been, where they’re going, and how you can help them, I think is super important.

Matt: Aside from just knowing the builder’s products and their processes and how they work, is there any value as well in bigger picture type stuff, like architecture, site design, construction material, that sort of thing?

Danielle: A little bit. I don’t get in the weeds too much with that. I feel like that’s something a little bit out of my lane because my builder is very well equipped that way. I do stay involved. So I’m knowledgeable that way and I listen, so I absorb it all. My lane is to bring the clients to the table so that those people can do their job.

Matt: Let’s unpack one other word you’ve mentioned a couple of times during the conversation, trust. That is obviously a big part of making it work with a builder. So, what do you do as an agent to earn their trust? Give me some specific suggestions there.

Danielle: Yeah. I talked a little bit about negotiating. One example would be as you’re bringing deals to them. And, you know, there are some deals, even in this market, we get deals where people are asking for something or they’re wanting money off, or they’re wanting, I don’t know, something crazy, even though builders are trying to survive right now where costs are crazy and different things like that.

You know, when you’re looking out for your builder and you’re understanding their circumstances, and even though you know the client’s maybe not meaning any ill will or anything like that, but you’re looking out for your builder’s bottom line as well, and you’re understanding where they’re coming from, and you’re generally trying to express to the client that it’s not that we don’t wanna work with you, but this is what’s happening. This is what’s happening on my builder’s side of the table, or you’re not just trying to force this deal down your builder’s throat.

I think when you truly try to work through those deals and get them done versus trying to get paid, you know, that’s just one example. And then also just taking care of the project as the Realtor on a weekly basis. And sometimes it’s daily basis because construction’s hard on projects with signs and, you know, your material like your flyers and stuff like that in the house, getting it show-ready, that sort of stuff. Just showing that you care about the project as much as they do.

Our signs get beat up all the time, but you need them up and you need people to be able to see that their houses are for sale. So, going by and straightening your signs and showing that you want people to be able to see them and that you care about them as well, I think that’s a big deal, too. So, that kind of way to show trust as well.

Matt: Talk to me about communication between you and your builder in terms of how it builds trust. Do you keep them updated on, you know, traffic through the open houses and activity and that sort of thing?

Danielle: Yep, every Monday. So we have team meetings on Mondays at 10:00. If I don’t already have it from Sunday, you know, updates, I’ll get it Monday at our team meetings. And then after our team meetings, I’ll call the builder and give him updates on what the open house traffic was. Any feedback that we have if we didn’t get offers or didn’t get any, you know, hot leads or anything that I need to follow up on. Through Buildertrend, we have a lead capture system where we put any leads in there. So sometimes I’ll have update on them in there as well.

Matt: What do you expect in reverse from the builder as far as earning your trust? Because it’s a two-way street, right?

Danielle: Yeah. Loyalty. You know, because I’m working hard as well. So, you know, I’m following up with those leads consistently. You know, there’s times I’m working at 10:00, 11:00 at night, but that’s the stuff that gets me excited. So, like, I’m not pissed about it but, you know, I do expect loyalty in return, and I do get that. So I’m very appreciative of that. I feel like, in return for that, I get a good product to sell. I get a builder that knows what he’s doing and cares about his product and is compassionate and cares about the client. It’s a great trade-off. The hours that I give, I feel like I get everything plus more back.

Matt: Let me ask you this. You’re working for a builder, there’s new construction, you know, houses are for sale as they’re getting built. Buyers are coming in, they’re talking to you about the homes that are for sale. Who is your client? Is it the buyer or the builder or both? And how do you sort of balance that?

Danielle: I kind of feel like it’s the house. It’s kinda interesting because I do a lot of dual agency, and my goal is just to… I want the house to get sold in the right manner possible. And that is what happens. So it’s not for anybody to have an advantage over anybody else. And Caliber wants the deal to get done fairly. So that makes my job really easy. So no one’s taking advantage of anybody. If the buyer wants the house, I’ll make it happen. I feel like the house becomes kind of like my baby. Like, I get very passionate about the house. I love the process.

Caliber’s always very fair to the client. I feel like the client wants the house and it all comes together because everybody’s working for the same goal. It makes the job fun and easy, and it gets done when no one’s taking advantage of each other.

Matt: We have all heard about the supply chain issues. You have touched on that a couple of times. The cost of lumber has gone up and so on and so forth. How has that changed your work in new construction?

Danielle: Thankfully, we have very loyal vendors and subs. And Caliber’s done a really good job of managing our timelines fairly well. We can fairly confidently say our build timeline’s six to eight months generally, but we do always have the conversation that there may be times that we have to switch a product out, or we just always have to be on top of ordering timelines. We order stuff earlier than we used to have to. You know, like, windows are ordered right away and appliances are ordered right away. And, you know, we’re now including refrigerators where we never used to include those. And so there’s different things that have adjusted that way. We’ve managed that fairly well.

However, like, generally in the marketplace, not every builder is that way. So I would say as people are shopping for builders, I would go out and look at their product, and look and see what they have for sitting homes and how long they’ve been sitting there because that’s not a situation that you might wanna get yourself into if they’re not able to finish product right now. The time management and the vendor sub management is a huge deal. If you can’t complete houses, you know, that’s a tough thing to sell to a client. And that’s part of your reputation as well as the builder’s.

Matt: How has it all sort of changed your conversation with the buyers as well?

Danielle: We’ve had a lot of cost conversations because we have specs in the ground and then people want to build off of those specs. And so they always need to understand that spec cost is not gonna be the same that they build a new house in that same cost. You know, generally, it’s 25 or 30 grand more because that lumber cost alone is gonna be different, plus every other trade that was involved in that house. You know, that’s assuming a $500,000 house, right? You know, if it’s a $700,000 house, it’s gonna be more than that.

You know, that’s been a conversation we’ve had several times because we can’t duplicate any house that’s in the ground. We can’t duplicate prices where we used to be able to do that. Like, okay, fine, we’ll find a similar price lot and we’ll build it for $500,000 just like that one that’s in the ground. So, that’s been the main cost conversation we’ve had.

Sometimes there’s been some cost conversations when we do complete custom builds where we do estimates right upfront. And then there is a lumber hike mid-bid, and then that cost comes in higher, but our clients have been… We have had conversations at the beginning of the bid process saying this may happen. And so, we let them know that so that when we do have the end conversation, they’ve already been aware of that. So, the expectation is there, or not expectation, but the possibility of it is there.

So I think setting expectations is just huge, and those aren’t fun conversations to have, but if you’ve set the expectation or the possibility of it happening, then I think that makes it just a little bit easier. But it’s way easier to have it upfront than not even mention it upfront and then have to have it when they see their new house, and then you tell them it’s 50 grand more than what you estimated. So, you might as well just get it over with.

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(Speaker: Matt McGee, Host)

It’s funny, I told Danielle before we started recording that I wasn’t, you know, super familiar with the new construction side of real estate. And I mentioned that I would be learning on the go as we talked, perhaps like you just learned more about it as well. So, thanks to Danielle for making both of us smarter about finding the right builder and working new construction.

If you wanna connect with Danielle, if you have any follow-up questions that maybe I didn’t ask, check today’s show notes. I will link there to her main website and also to her Facebook and Instagram pages so that you can connect with her.

Quick programming note to pass along, next week is Memorial Day, Monday, May 30th. How about that? So, there will not be a new Walkthrough™ next week. No one needs to listen to real estate podcasts on Memorial Day. Enjoy the day with your family if you can, barbecue, you know, the whole nine yards. Our next new episode will be out on Monday, June 6th.

Let’s do our takeaways segment. Here is what stood out to me from episode 84, new construction with Danielle Seifert.

Takeaway number one: Yep, you can make good money in new construction, but Danielle says money should be the last reason to do it. She spent almost 20 years working in new construction because she loves the relationships and she loves the process.

Takeaway number two, it’s really, really, really important to find the right builder. Danielle said shopping for builders is kind of like dating. Now, when you go out on dates, you ask the other person a lot of questions. So, here are five questions to consider as you talk to builders: Are they a good personality fit? Some builders are more structured than others. Some are more creative than others. Question two, what are the builders’ expectations when it comes to things like open houses, your schedule, the time commitment involved? Question three, do you believe in the builder’s product and processes? Danielle said you have to do your homework before you commit to a builder. Question four, do they believe in you? Do they want your input? Do they value you as a team member? And then question five, can they finish homes? With all the supply chain issues happening right now, Danielle says that is a key question to answer.

Takeaway number three, yes, you can work with more than one builder, but you have to be really careful about things like tracking where your leads come from. So, for example, if you get a buyer lead through builder number one, you need to try to sell the buyer, first and foremost, on builder number one’s products. If that doesn’t work and you end up taking the buyer over to your other builder, that’s okay. Just make sure you are totally transparent with everyone.

And then takeaway number four, look for a relationship that’s a two-way street. Trust is super important. Danielle shared several ways to earn your builder’s trust, but she also said you need to make sure the builder earns your trust. Ultimately, you wanna be working with the builder, not for the builder. And those are your takeaways this week.

If you have any questions or feedback for me about something you heard today, a couple of different ways you can get in touch, leave a voicemail or send a text. The number is 415-322-3328. That’s 415-322-3328. You can also send an email, address to use is walkthrough[at]]homelight.com, or find me in our Facebook mastermind group. Just go to Facebook, do a search for HomeLight Walkthrough, and the group should come right up.

All right. That’s all for this week. Thanks again to Danielle Seifert for joining me and thank you for listening. My name’s Matt McGee, and you’ve been listening to “The Walkthrough.” At HomeLight, we believe in real estate agents. We’re here to explore how great agents grow their business, stand out from the crowd, and become irreplaceable.

Go out and sell some homes. I will talk to you again in two weeks with another new Walkthrough™. Bye-bye.

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