I hear from agents all the time about a variety of different real estate trends. One of the things that I get asked a lot is how to work with developers.
Maybe it’s because I absolutely love working with developers. Or, maybe it’s because there are always so many new developments going on in Los Angeles.
Either way, agents can really help real estate developers. This post will explain why (based on what I do to help add value to the developer’s bottom line that I choose to work with.)
Do Developers Swipe Right On Realtors?
It’s like a match made in heaven. Developers spend a lot of time and money on every development so they want to sell as quickly as possible for as much money as possible.
Agents want to find their clients the best possible place to live for a great price.
By working together developers and agents can meet in the middle to create a win-win. Because without agents, my experience has shown that developers have a price in mind that isn’t realistic.
Usually, the developers have their price. Then, there’s the real price.
Developers want to have a record-breaking price tag on every property, because they believe in their work.
However, 9 times out of 10, it’s nowhere near what they’ve made it out to be in their head, which usually takes a real estate agent to point out.
For example, maybe the construction was done cheaply, or the finish just wasn’t up to snuff.
Developers and Realtors Are Like Peanut Butter and Jelly
Developers are looking to build and move on to the next project. They spend a lot of time on each project and then they want the realtors to sell it as fast as possible.
Realtors want to help someone get in a home that fits them, so it is a perfect pairing. Usually, it takes a little longer than most developers guesstimate, but it is just part of the process.
What I Bring to the Table
One of the biggest things that I can offer a developer is perspective.
I have a breadth of knowledge in things like construction and the quality of the build. So I can weigh in and share my opinions on the design, the floor plan, the concept of the house, and give some projections into the future.
I can give some advice on what I think will age well and what’s hot and what’s not. I think that something a lot of developers forget about is the concept of future-proofing.
A lot of the small details are important to pinpoint such as adding in a $5,000 Miele coffee machine, or redoing the cabinets to make it feel more like a home.
The Swall Properties
In my 2020 blog I wrote about my experience working with a developer on selling the Swall Properties. Josh and I both worked with him from the ground up and helped him with every step of the process, from the build to the sale. We were very lucky because he brought us in on the project in the early stages.
One of my first memories of the project was getting to tour the building site where the only thing that was there were the framing and staircases.
One of the best moments of my working relationship with the developer was being able to work on multiple aspects of the listing.
Thankfully, this developer was incredibly savvy and knew a lot about the area he was building in before he even broke ground. I was able to fill him in on things that would be attractive to buyers looking to pay top dollar. I helped him to create the marketing and advertising plan for the building. We mapped out the lifestyle that the developer needed to sell prospective buyers. We helped him understand the importance that people would want to stay there for decades because it is so walkable. Our perspective was vital to reminding him that we weren’t just selling another brand new condo.
I saw the wood frame, the staircases, and watched as the floorplans and the building came together.
Seeing all of the minor setbacks with the city, building codes and even the utilities being turned on was really amazing to see in a building of that size and scale. It was very different from a single family home.
However, I was able to offer a lot of suggestions, such as adding in more customized designs that would have a buyer feeling that this was a home, not a condo. The risk with buying a condo is overspending on the build and it still can feel like a white box without any warmth. However, buyers will pay for something that is unique and feels “homey” so we put a lot of energy into creating an easy to maintain ambience within the property. Since the location was top-notch, everything else had to be as well.
For instance, we landed on adding in cabinetry that is custom, a $5,000 coffee machine, and custom paneling over dishwashers and refrigerators that really made the woodwork pop!
It is worth noting here that for our price point it is not standard to have a custom build kitchen with paneled appliances. It is also not common to have a built-in Miele coffee machine. That is why it was such a privilege to work for this developer. He put in so much thought and effort into making all of the units unique, and it paid off.
This was a prime example of the most important aspect between a realtor and a developer: trust. It’s a relationship that needs to be open and communicative.
How to Make For A Win/Win Situation
First and foremost, I have to believe in the product. Anything that is brand new on the market, it is difficult to find a comp, but I get very enthusiastic about a new sales process, so I love doing that research.
I do the legwork of finding the comps by knowing everything about a property from the ground up. Most agents do it by comparing it to similar properties. But if you don’t know how the building was constructed, you aren’t doing an accurate comparison.
I cannot stress enough the impact you can have with a buyer when you can effortlessly spew out details on the ins and outs of how the building was constructed. It adds an enormous amount of value.
There is a huge difference between taking a buyer through and quoting standard facts such as square footage, marble countertops, versus being able to take them through and explain that the developer used a new sound deadening technology in between each floor to mitigate sound, because it helps the buyer understand why this unit is better than others on the market.
Luckily, I have access to a great team (think my husband wink wink) and this support also empowers me to take lead on the project.
I can help developers make sure that they are getting their ROI. How do I do this? I know why people are buying, whereas they just think about what people will buy.
For example, people buy condos because they want it to be a home. So I may suggest creating a foyer or a formal entryway to make it feel more welcoming. A lot of people wouldn’t like that because it isn’t usable, but it really sets the tone and helps to get an ROI–it wasn’t in the original plan, but it’s something that I can bring up to a developer.
Another example of this would be adding in Master Closets. Big closets are something that developers don’t want to put in. However, it can be the thing that makes the buyer pull the trigger over another property, because it is such a rarity and a luxury.
So What’s My Perfect Match?
I want to work with developers who are willing to let me be a fly on the wall. They need to let me in on the entire process so I can help get them the best ROI. If they just want me to come in at the end to sell it, it won’t be as beneficial for them.
I also prefer if they are easy to work with and want me to be involved in the process the entire time. Meaning everyone drops their ego and works together to ensure the developer ultimately gets their target price.
If you let me, I will get you that much closer to the target price per square foot. I will also help you to set realistic expectations about the actual percentage of traffic their building is going to get. Sometimes, it is as simple as the saying, under promise and over deliver.
For example, a lot of developers just assume that finding 16 buyers for an unoccupied property at the highest price per sq foot, with no existing comps will be an easy task. I can assure you it isn’t. You need hundreds of qualified buyers to come through in order to reach that number. It is also really nice for people to see other buyers. When they see other buyers in there, it creates a sense of urgency.
These are things that an agent thinks about that a developer usually never considers. It is also important for a few select buyers to see the listing prior to the grand opening. It offers these buyers the feel of exclusivity, which makes them want to buy on the spot. This is great momentum towards selling more units before the grand opening weekend. This gives you direct comps within the building and helps make buyers at ease on their offers.
What stood out to you the most about this post? Do you know any developers who might be interested in reading this post? Why not pass it along?