It’s no secret that today’s higher interest rates have cast a chill on real estate transactions. Roughly 84% of today’s mortgaged homeowners are locked into a rate below 6% so it’s no wonder they are staying put, thereby reducing inventory and transaction volume. As such, many buyers are priced out of the market, stuck on the sidelines until rates come down or inventory goes up–or both. Meanwhile, new construction currently represents one third of all single-family housing for sale, adding much needed inventory to the market. More significantly, many builders are offering buy-downs and incentives, effectively reducing interest rates to a comparative 4.5 to 5.5 percentage rate, substantially below today’s average of 7 percent. This is why you want new construction in your business plan. Following is how to target new construction in 2025:
STEP ONE: GET TO KNOW NEW CONSTRUCTION
Start by doing the following:
- Identify new subdivisions in your area
- Connect with reputable builders (see list here)
- Foster relationships with on-site agents
- Tour model homes and learn the details of the communities
- Research all incentives, rate buydowns and closing cost assistance being offered
- Obtain subdivision plots showing available homes and lots
STEP TWO: IDENTIFY POTENTIAL CLIENTS
Search for properties within a 5-10 mile radius. Some examples include:
- Owners of smaller, older homes within a few miles of the new subdivisions
- Older properties in a similar price range as a new construction home for those wanting new
- New homes that are more expensive for those who want to upgrade
- New homes that are more expensive for those who want to downsize up
By approaching the new construction market in this way, you are able to offer your services to both sellers and buyers, which can be a productive win-win.
STEP THREE: DEVELOP YOUR MARKETING STRATEGY
Once you’ve identified the area(s) you want to target, work with your title company to come up with a list of potential leads. Depending on your sales style, you may want to send introductory post cards first, followed up by a phone call, with another follow-up via email if appropriate. As always, your goal is to develop a relationship based on service. However you decide to approach your marketing, always ensure that you are adhering to relevant privacy laws when using lead lists, including obtaining consent to contact individuals via email.