Member Tip – Kevin Ellis from Thomas Mae
I hope that the New Year has got off to a great start for you and your business and that instruction levels are good.
Can you imagine how it would feel to have a stream of instructions that you had a greater visibility of and guaranteed for this year and the years to come? Just imagine the plans you could make for the growth of your business, let alone all those investor sales on apartments which could be sitting in your managed stock and adding value to your business!
Well, if you are already operating in the Land and New Homes market, you are probably already enjoying this situation as unlike a typical estate agency sales business, you will be benefitting from knowing that the site you sold to a house builder is going to be built this year or next and that its guaranteed income – better still, hopefully you secured fees at a full 2%.
There’s no doubt that a Land and New Homes operation is now an essential part of modern estate agency. It provides sustainable growth and can often generate multiple ‘wins’ from the same site.
So here are my Top Tips
Know what’s going on…
Having presented at various conferences, I get a lot of engagement from agents who are blissfully unaware of the extent to which new homes are emerging in their area. So set yourself a task to track every planning application from the last three years – these could be consented sites that haven’t been built yet or are under construction, then all of the sites currently in planning awaiting a decision. Share them out amongst your negotiators and do some drive-by’s to see if work has started. If the site is sitting there with no work started, the chances are that the vendor could be tempted to sell the site on, therefore creating a land fee. Pull all of this information into a central database.
Top 15 Housebuilders relevant to you
By compiling the list you will quickly establish the main developers active in your area and if they are controlling sites that are agent free, then you need to focus on developing a relationship with those builders. If you have any land opportunities – concentrate on selling them to people who can give you something in return.
Commercial Agents
If you know the local commercial agents, try and build deeper relationships so they get you involved early on in the process of a disposal; this may help you become the recommended agent, and if they can help you get an involvement then give them a share of fees – you might not have got the site without them. Commercial agents are now much more in sync with residential now due to the volume of office buildings being converted to apartments.
Become the local expert
Believe it or not, the reason agents miss out on New Homes instructions is simply that they don’t understand the drivers of a housebuilder and furthermore don’t know how to differentiate value from one housebuilder to another. Know your market, share best advice and deliver a clear and consistent approach to pricing – don’t just quote asking prices, tell them the net achievable figures and also include rental values and yields.
Pitching to Housebuilders
This is the area I feel most strongly about as most agents just don’t understand how to pitch to a housebuilder – they don’t want to hear the same old blurb and the top 10 reasons and that your office is bigger than anyone else’s. The clear fundamentals for a winning pitch are broken down into the following sections:
- Overview – demonstrate your understanding of the scheme, showcase your knowledge of the area and demonstrate that you understanding the brief
- Marketing – reference your branches, but focus on personalities, strategies, and outline your service offering and service standards
- Operations – include key staff, feature previous clients and testimonials
- Conclusion – why they should engage your services; highlight your numbers and the size of your investor database.
If you want my advice, don’t include fees – leave this for discussion as you can’t possibly quote a fee unless you know what is expected of you.
Other ways
- If a housebuilder is selling directly, you can still get involved and your default position for every New Homes site should be to produce a good quality piece of literature from your Lettings business, endorsing what the rental values and the yields might be. This is a quick and easy way to pick up new homes stock from investors
- Provide swift service on part exchanges
- Understand housebuilders year ends – a great way to get involved – they might have declined your services previously but that soon changes if they are heading towards year end and have stock or are behind on sales.
If you’d like to learn more, then please get in touch.
