How Realtor Referrals Can Boost Your Construction Business

In this episode of 3 Questions with BLC, we explore the powerful impact that realtor referrals can have on your construction business. Realtors are often overlooked as a source of referrals, but they can be game-changers in helping builders and remodelers secure consistent leads. By establishing strong relationships with local real estate agents, you can tap into a steady stream of clients without relying solely on costly marketing efforts.

To make the most of realtor referrals, it’s important to offer value and create mutually beneficial partnerships. As the real estate industry undergoes significant changes, this is the perfect time to start building connections that will drive long-term success for your business.

If you’re ready to grow your business by leveraging realtor referrals, 3 Questions with BLC offers actionable insights to help you create a referral system that consistently delivers high-quality leads and helps your construction business thrive.

Watch/Listen/Read to learn how to strengthen these relationships and maximize your referral network for sustainable growth.

Builder Lead Converter ATTRACTS, CAPTURES & CONVERTS high-quality leads for home builders & remodelers so they can pick & choose their clients & jobs. Find out how at https://www.builderleadconverter.com

Transcripts:

Rick: Today in Conversations That Convert, we’re talking about referrals, specifically realtors, and how builders and remodelers can get more realtor business. Let’s get started.

Narrator: Welcome to Conversations That Convert. Every week, we’ll spend about 10 to 15 minutes tackling relevant lead generations. Marketing and sales topics for remodelers, home improvement companies, and home builders conversations that convert is brought to you by Builder Lead Converter, your perfect sales assistant.

And now here’s Rick and Daiana.

Rick: Hey, everyone. Welcome to Conversations that Convert Daiana. Welcome. Lovely to see you again.

Daiana: Same here. Welcome. Excited to hear the news and see what wants to happen in this conversation that can convert in some good.

Rick: We’re getting into a fun subject again. One that a lot of builders always are talking about, which is referrals.

And how to get more realtor referrals for your custom home and remodeling business, and that is an often overlooked referral partner is realtors. A lot of oftentimes Daiana remodelers don’t even think about this. They know they might think about architects or interior designers, but they don’t think about realtors.

And it’s a great opportunity to get some more business to business referrals. So what do you think? Should we jump into it?

Daiana: Yes, and I have three questions for you today. I don’t know if you’re ready to answer.

Rick: I am. Yeah, that’s right. We’re continuing with our three questions with Builder Lead Converter.

So let’s jump right into it.

Daiana: And today I want to challenge you. So what is changing about the way realtors sell homes?

Rick: Yes, so in February, I think it was the National Association of Realtors settled a lawsuit that is changing the way that every home will be sold going forward. And essentially what is happening is now, A listing agent listing real estate agent when they go to list a home instead of advertising in the multiple listing service where A commission that would be paid out to a buyer’s real estate agent or a buyer’s realtor where they can advertise that that is gone so no longer will the multiple listing service be able to talk about commissions paid to buyers agents And now buyer’s agents or a buyer’s real estate agent They will, two things will now be required of them.

Number one, they will have to have a, some sort of a representation agreement with the home buyer. Number two, they will have to figure out ahead of time before they ever show a home how they will be paid and how much they will be paid. ’cause historically what happened is, is they would look on the MLS and they would see.

and then there will be a compensation structure on there for what they would get paid. So they would just look at this and they would know, okay, I’m going to get paid 2 percent or two and a half percent or 3 percent or whatever it is. If I show this home and then sell it, no questions asked. Ultimately the seller of that home, Paid the compensation because they would pay that to the listing real estate agent.

And then ultimately it got paid to the buyer’s real estate agent. So that’s now gone. So what they’ll be required to do is not only get a representation agreement signed, but also they will have to negotiate with the home buyer that if the seller is unwilling to compensate them, that that home buyer will have to compensate them.

So buyer’s agents right now are saying, How is this going to work? And new home buyers are saying right now, Hey, it’s expensive enough to buy a new home. I don’t want to go ahead and then have to be required to spend another two or two and a half or 3 percent on my buyer’s agent, you know? So what we think is going to happen is there’s going to be a, really a dramatic increase in the amount of leads that will be going directly to.

The listing agent, which would include builders, home builders that use real estate agents to, to list their homes. And so each builder now will have to determine how much they are willing to compensate a buyer’s agent. And they also have to be able to. Advertise that outside of the multiple listing service.

So everything is really getting turned on its head and Daiana, this is happening right now. So yeah, so this episode will probably be posted after this happens, but August 17th is when it will go, it will go, it will go live. So literally within less than two weeks from the date of this episode this change will take place and the industry will be turned on its head.

Daiana: Wow. That’s, that’s amazing.

Rick: So I guess this begs the next question.

Daiana: Yeah. Does this change affect the realtor and builder relationship?

Rick: The answer is yeah, absolutely. It’s going to change. I, and, and if I’m going to pull out my crystal ball I’m going to say it’s going to change it. I think for the better.

So this is my theory. I will share it with you and we’ll find out if I was right or not here. Probably in about six months or so. I see this as a great opportunity for builders to network with realtors, their local real estate agents that work their market. And let them know that they can earn a commission when they bring a buyer to the builder.

And here’s the important part. No showing is required. So in other words, I, as a builder can just advertise realtors as they look, whether you, if, if I build the spec homes, if I build model homes, or if I only build to be built homes, in other words, pre sold homes. I can say, yes, I will compensate. So now that buyer’s agent that is representing that buyer, if they know if they come to me, they are going to have multiple housing options.

In other words, they are not going to have to get permission from six different individuals to find out if they’re going to get compensated or not. But that builder can represent six different potential product offerings. You know, again, to be built offerings, spec homes, maybe model home offerings and they know that they’re going to be compensated.

So I really look at this as a great opportunity for builders to be able to increase the amount of Real estate networking that they do and also what we call like a cooperative sale where there’s a cooperating broker That’s bringing you bringing you the buyer. So what do you think? What do you think of that?

Theory Daiana.

Daiana: Well, so in my mind, maybe they will adjust and some new new profession or new jobs will appear or readjust and some, some older jobs will disappear or readjust. So I think that will bring a change in job descriptions and how they, they act and probably they will, they will convert to, to something that will bring them money, right?

Rick: Well, I think, I think that’s right because there is something right now called a facilitator. And a facilitator is where the realtor does not necessarily represent the fiduciary interests of the new home buyer. They simply facilitate a transaction. So I can see a lot of buyers agents moving to facilitators where the buyer may find a home that they want to buy.

Then they would hire a facilitator to facilitate the transaction. And they might even find a buyer’s agent that where they want to be represented much like an attorney. Would rep would represent them and they would do it for either a flat fee or for a lower commission amount. So I definitely see this as gonna be more work for new home buyers because again, they’re, they’re, if they don’t wanna pay or compensate a realtor to find in their home, they’re gonna have to find ’em.

That sells by contacting a lot of different sellers. Yeah. And like you said, yeah, new opportunities. For traditional buyer brokers or real estate agents that have represented buyers where they knew they were getting compensated from the seller, but new opportunities to maybe do more transactions and make less from each.

By working with more buyers and offering specific niche. So I, I think you’re, you’re spot on there for sure.

Daiana: They want to see in six months or so. So I

Rick: think things it’ll, yeah, I think a year from now things are going to look a lot, a lot different. So as if I, if what I’m recommending to all of my builder partners is to start focusing on doing some public relations, some awareness campaigns.

With their local real estate agents after August 17th to just confirm that, yes, we will pay you, bring us your buyers. Now you might change what you have historically compensated builders, or maybe you’ve been a custom builder that has never really targeted. The real estate industry for sure now is an opportunity.

But what we, we think is gonna happen, Daiana, is that there is going to be a mass exodus from real estate agents from the industry because it’s gonna be number one, a lot harder to get business now that buyers are going to be responsible for paying. So there’s gonna be a lower percentage of buyers that are actually going to want to use you.

And we’re also getting towards the second half of the year, where we’re into the second half of the year, where typically transactions slow down all the way up through the holidays. You know, and then when we get into the new year, things pick up again. So there’s, you know, when you get to the end of the year, guess what?

You got to pay your insurance. You got to pay your, your dues to your your local MLS office. And so I, I think that is business dwindles. and cash dries up that a lot of realtors will look at 2025 and say, you know what, it’s not worth me paying this additional money to stay in this business.

Which means that even more opportunity to get direct leads for, for home builders.

Daiana: Right. So are you ready for the third question?

Rick: I am.

Daiana: Right. So how can a builder start to network with local realtors?

Rick: Yeah. So this is the question, like, so if you’re a builder and you’ve never reached out to, to, to realtors before, and also as a remodeler, you’ve never reached out to realtors before.

The easiest way is to go to a mail house and buy a list. Okay. So you can actually go to any, any mail house out there. A lot of people sell lists. Just go to Google and find a mail house. And you can say, I want to buy a list of realtors that work in King County, you know, you know Washington.

So, which is a suburb of Seattle and you can get a list of those. And then once you have that email list, you can legally, you can email them once. So you can take and set up an email campaign, email out those Realtors and invite them to get on a call with you to discuss a partnership. And so these guys are going to be, I think, very receptive to having the conversation with you and talk about that partnership and what are, what are those, some of those things that you would talk about as far as that partnership, you know, number one, obviously the services that you offered, but also.

The ways that you could help them. So if you’re a remodeler, you want to target people that will be selling homes as well as representing buyers to find homes. And if they find a home that needs some work, some remodeling work, guess what? You might say, here’s the things I can do to help you complete that remodeling work.

So you can Get a transaction put together, or perhaps it’s a listing that you want to sell, but it needs some work in order to get it sold. You can offer services to do that. Number two, create a realtor representation agreement. So if you’re a home builder create a realtor representation agreement and send that to the, to the realtor, showing them what they need to do to earn a commission from you.

So in other words, do you want them to bring the buyer in, Do you want them to, how do you want them to schedule a showing? How, what sort of compensation will you pay them? It could be a variable compensation, right? Meaning that you might pay one compensation if you build spec homes or model homes. So the home is up, maybe you pay a different compensation.

If it’s a to be built home or whether they’re just bringing the buyer to you and you’re going to design and build that, that home. You know, for me, I think it’s easier to sell a home. That’s already up in most markets where the inventory is, is not real high. So I might pay a little bit less compensation for a home.

That’s up and maybe increase the compensation. As to bill, you can also put in a a staggered compensation. In other words, the first sale will pay you this much. The second sale will pay you this much to really encourage a longterm mutually beneficial relationship. So. So that’s how I would get started is just buy a list.

Email that list. Propose a call to talk about a partnership. Talk about different services that you provide and how you can help them. And remember, everyone’s favorite radio station is W I I F M. What’s in it for me? Right, Daiana?

Daiana: Yes, I remember that. And I’m also curious, how can you help the audience, those who are watching us right now in this, in this moment that of uncertainty?

Rick: You know, I think the important part is, is that to do something. And in other words, this effect, it doesn’t matter where you are. It doesn’t matter if you’re in Hawaii, Alaska, or Florida, or anywhere in between in the United States, it’s going to affect your market. And so Realtors are going to be looking for alternative ways to try to generate some revenue.

And why not be part of that mix? You know, why not come to them and say, Hey, look, I want to be your, your builder partner. If you have somebody that’s in this price point for this type of home and this location, bring them to me, this is how my process works. This is how it compensate you. Obviously, if you can, if you’re working in construction financing, where you can, you’re, you’re doing a a one close up front, you can pay part of that commission up front, you know, that initial closing.

So the realtor doesn’t have to wait. Six to 12 months, you know, to get, to get paid. And for, you know, if you’re a remodeler, man, I think that, you know, the sky’s always been the limit where, you know, not only networking with architects and or interior designers, but also realtors that need to have projects done for people that are.

Considering buying a used house or selling a used house where you can come in and, you know, make that upgrade that’s needed to to, to get that transaction to, to happen. So do something because the, the market will evolve a year from now. I guarantee there’ll be, this will kind of all settle out and we’ll sort of have this new way of of representing buyers and how they’re going to buy and sell homes.

But in the meantime, Take advantage of the chaos and you know, try to get some more networking done with, with realtors. Amazing.

Daiana, any final thoughts on this? And it’s a huge industry change. So I’m really curious to see what will happen. What are your final thoughts?

Daiana: Well, final thoughts as to how to prepare and be, be ready because those are facts. So this will happen even if you want or not. So how can you, how can you better embrace change?

So you adapt fast and you were part of those early adapters.

Rick: That’s right. Get ahead of it. You know, and I’ve talked to a lot of builders weekly and, you know, they’re, they’re a little slow right now. You know, leads are a little bit slow. We’re in an election season in the United States, interest rates.

Kind of gone up and down. There’s some concerns over the economic factors. So it’s a little bit harder to come by leads right now. And so a great, this is a great time to actually improve your network of business to business referral partners like realtors, architects and interior designers. So if you would like to talk more about your business and how we can help you attract, capture, and convert high quality leads so you too can pick and choose your clients and jobs.

Go ahead and just click that button below to schedule your strategy call and we would love to learn more about you and see if we might be able to to to partner with you to help you grow your revenue and profit. So, for my brothers and sisters in Christ, may the grace of the Lord Jesus Christ, the love of God, and the fellowship of the Holy Spirit be with you always.

We’ll see you next time on Conversations That Convert. Bye, everyone.