Builders - Are You Making Enough Profit?

Posted by Steve Vincent on Aug 12, 2013, 9:10:57 AM

In profit, Builders, Marketing plan, New construction, builder services, builders, Sellers, set fee

Sawtooth-Ct-8810New construction housing is making a slow but steady return in our area. In a previous post we discussed the need to increase  lending to custom home builders. Today, we'd like to speak directly to those very same custom home builders and ask one simple question: are you making enough profit on each home?

As a builder you need specialized builder services from your Realtor. You also need flexibility, cost containment and process accommodation. Let's take a look at specialized builder services first.

Specialized Builder Services

  • Site Selection - your Realtor should help you locate, perform discovery and analyze building lots, raw land and/or development opportunities
  • Negotiate - your Realtor should be adept in negotiating the purchase, or option to purchase, for targeted opportunities
  • Partnering - your Realtor should be able to partner with you on certain projects if appropriate
  • Design - your Realtor should be able to proactively participate in the design of house plans, particularly when you plan to build on speculation
  • Design II - your Realtor should be able to help in interior design and work side-by-side with you and your suppliers/contractors to select colors, styles, finishes and flare
  • Pricing - your Realtor should be confident and accomplished in determining appropriate price points whether for a single build or an entire development
  • Marketing - your Realtor should have a proven track record of generating maximum exposure in the marketplace. His/her marketing plan should be robust and modern. It needs to generate buzz at the outset and create a steady stream of interest during the project. It should also create pre-sale opportunities beyond the current project
  • Close - your Realtor needs to have a history of bringing a project to a successful close

Sawtooth-Ct-8808-HordOk, you say. That all sounds great, but I thought you were going to discuss profit. Indeed we are! In fact, we have been. Without a well planned and executed plan of specialized builder services, profit is wishful thinking and even, perhaps, somewhat happenstance. Now, let's assume you are getting top notch builder services from your Realtor. I ask again, are you making enough profit on each home?

Of course you are getting bids from multiple contractors and checking on suppliers. You are negotiating for best terms and conditions across the board. Right? Well maybe, and maybe not. Have you looked into our specialized builder services? Did you know that our set fee for service can save you thousands and even tens of thousands of dollars on each and every project? Let's look at how.

Cost Containment and Accommodation

Our set fee (flexible depending on the scope of the project) encompasses all of the services listed above. There are no add-ons or upcharges. No special marketing fees. We get paid when you get paid.

That's nice, but what about a buyer's agent you ask? Glad you did! That's where our program really shines. Unlike traditional Realtors we don't assume one size fits all. We understand your homes will sell to buyers in three distinctly different ways. Sometimes your home sells to a buyer who is represented by a third party agent (from an outside brokerage). Other times you sell your home to a buyer who is represented by an agent who works in the same brokerage as your listing agent (or, in fact, is your listing agent). Finally, since you're an attentive and active builder, you're on site nearly everyday and even (gasp!) do some of your own marketing, you might sell your home directly to the buyer.

That makes you think, doesn't it? Each of those sales have very different cost structures. You've probably sold a home in each of the three scenarios. Did your real estate commission costs reflect the difference? Ours do. Does your Realtor want you working directly with the buyer when appropriate? We do. Is your Realtor really looking out for you? We will!

Phillips-Farm-Rd-8803So, one last time, are you making enough profit on each home? If you're a builder you need to call us today, 336-790-5210. We offer all of the specialized services you need and will reduce your costs dramatically. Why not join your fellow builders who have already reaped the benefits of increased profits? They leave closing with thousands of additional dollars!