It doesn't have to be a shotgun wedding. Builders can admit at one point that they actually salivate when seeing REALTORS® sashay into their model home sales offices with clients in tow. After all, these professionals, in all likelihood, wouldn't be spending time chauffeuring these prospects around if they weren't already qualified and ready to buy. The union of builders and Realtors could, instead, become more of an "arranged marriage", complete with pre-nuptial agreements drawn up.

Because I frequently write about builder-Realtor relations, I was contacted by the former president of a builder association organization on how they could go about forming a formal council with Realtors to network and assist one another in selling homes. Unfortunately, I could not find any national organizations in existence that could oversee such an effort. In many parts of the country, especially in a boom building market such as this, builders will not admit that they need Realtors, and Realtors feel unappreciated by builders until the market experiences a downturn. Several years ago, there existed a now-defunct Builder-Realty Council International. Since then, some local market areas persisted in keeping BRCs of their own, perpetuating the cooperation between builders and Realtors.

One such area is in North Texas, where the local BRC meets several times a year, according to Blanche Evans, editor of Agent News and Associate Editor of Realty Times. She reports that included in the networking opportunity are builders, Realtors, lenders, and title industry representatives, who come together to discuss how these factions can make home selling smoother for everyone. And, because there are factors unique to new home sales, these meetings can turn into valuable educational and fact-finding missions. Builders, for instance, may not realize that the competition is keener than ever in a great market, where Realtors courting clients through new homes can explain new home expectations in broader terms. In these days where seller incentives have all but disappeared except when linked to using the builder's in-house lender, and when buyers can cover five or six new home communities a day with their Realtors, builders can oftentimes be well served by an outside real estate professional.

Builders spend millions of dollars each year to splash fancy display ads in their local newspapers' real estate sections, erect billboards to direct clientele to their model home parks, and arrange elaborate signage, like bread crumbs in Hansel and Gretel fashion, to steer buyers their way. They realize, however, that there is no way buyers can read all of the ads, visit all of the communities or see all of the signs. And, although the Internet now provides an awe-inspiring new medium for reaching these folk, builders simply cannot strut their stuff to every one of those relocating families and individuals who arrive at airports all over the country looking for homes in faraway places with strange sounding names. Enter the Realtor, who oftentimes picks up these buyers at the airport, arranges full-day tours of both re-sale and new homes, can entertain the kids while Mom and Dad inspect the homes, and even find them a good restaurant at lunch time.

"The Realtor is a gift, " says a Lennar Homes representative in North Texas. "The customer is one time, but the Realtor is forever. " When asked if buyers who return to new home communities looking for discounts (because they now are not accompanied by the Realtor), Lennar's Steven Brooks responds, "We let the customers know on that first visit with the Realtor that we don't give any discounts regardless of their representation. Our on-site agents keep careful hard copy and computer records of buyers registered by their Realtors."

What "pre-nuptial" agreement or guidelines between builders and Realtors are drawn up for this liaison to work effectively? A specially designed registration form can be drafted, composed by both builders and Realtors, to become the standard under which they agree to cooperate. On it, specific rules are outlined for builder, Realtor and buyer, delineating:

• The Realtor must accompany the buyer on the very first visit to the builder's community. No pre-registrations or post-registrations are permitted.
• Terms and commission percentages of the base price of the home are specified on the form.
• The time frame for formal buyer representation is also stated on the registration form, with the possibility of renewal by the agent/client.
• A "one price" policy, where the builder agrees that there is one price for a particular house, whether it becomes an in-house sale or is sold through a cooperating outside agent.
• Both builder and Realtor must disclose all information relevant to a sale.
• One dated registration per client will be all that is needed for representation.
• Some agreements may even specify, in the interests of fairness professionalism, that no gifts, special incentives, trips or bonuses can be offered to bring customers to particular developments or homes.

Even though nationwide organizations such as the former International BRC are no longer around, many builders who at one time were members still display remnants of those times. Signs on sales office doors stating "Prospective home buyers must be accompanied on the first visit by their Realtor if they wish to be represented by them" are still commonplace in the industry.

There's no doubt that the rules and cooperation brought about by BRCs, both past and present, have left their marks. Local builder associations may now find it a timely hedge against future market downturns to look into forming their own councils, helping to create a winning proposition between builders and Realtors, setting the stage for a "happy marriage" in the new millenium.

Published: December 31, 1999

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Editor's Note: This article reflects the opinions of Dena Kouremetis only and not necessarily the views of this or any other publication, organization or Website owner.

A veteran of the real estate and homebuilding industries since 1986, Dena Kouremetis first joined Realty Times as a new homes writer in 1998. Since then, she has authored four books, written consumer columns on new homes issues for websites and newspapers all across the country, contributed to builder trade magazines, appeared as a guest expert on several radio shows and even created a ten-chapter podcast for LendingTree.com’s homebuilder website, iNest.com, now available on iTunes, entitled Uncharted Waters; Navigating the Purchase of a New Production Home. Kouremetis recently joined her local Folsom, CA Coldwell Banker office as a broker associate while continuing to write for the real estate industry. For the past three years, she has been training real estate agents for both the resale and new homes industries, putting her experience, research expertise and gift of expression to work to help others entering the business.