New Construction Mastery: The Ultimate Lead Generation Hack for Struggling Agents

0:00I just heard recently that for the first time ever, new homes are selling for less than used homes. Because the reason for that, I think, anyway, is because they have a one-year build or loan, they have to sell it. They're motivated. And people with used homes, sometimes they're motivated if they have to move. But those people that are just seeing if they can sell it, they're just not selling. at the end of the day. Everybody, it's Kathy Burns here with Real Estate Riches. And today, my guest is my good buddy. Randy Justus, who I'm partnered with on many ventures, especially in our business, which is EXP Realty. along with some other agents every Tuesday morning and we like hold each other accountable and things like that. We were talking about something that Randy's been doing and found great success in and that's with new construction because so many agents are struggling and

1:08there's a bananza right there and that's why I wanted to have Randy on start to talk about that. So Randy, talk about because today we have to disclose when we get bonuses. We have to disclose our you know our rate that's the new mandate and sometimes when you got a new construction person, you know, you're taking a client and they see you're gonna get paid $2,000 and you know over and above your commission and they get a little anxious, you know, how did you handle that with your particular people? Well, you have to have them sign off on it. You have to be completely upfront about it and basically the bonus that I got on the last one was for a completed construction and close it by the end of that month because so if the month passes, the bonus is gone. So it has to close. It's for it's for a quick close on a finished new home. So there's a way to present that to your client. Say listen, you fit this mold. They're gonna pay me a bonus because I found someone like you

2:15who could close in this time frame and So I'm being rewarded from it has nothing out of your pocket the builders paying me. So there's definitely a way to phrase the different scenarios. Well, there's something you got to make it something in it for them too and that's what I did. I You know, I got them a new washroom dryer, refrigerator, blinds in the whole house. I got them everything that I knew from experience. You know that they had to offer and so it was the one. Yeah, it really is. You know that so many people don't realize what we do and how we bring we bring so much to the table. I read this one Facebook post this guy was saying hey, I'm trying to sell my house by myself. I don't want to pay those Realtors a dime because they just they're just the middlemen and they just capture all this check and I go Said oh wow, how naive are you? I'm thinking all the work that we do per client. It's a man I've heard it's an average of a hundred hours per transaction

3:18It has to be and sometimes much more right? Yeah, it depends but average is a hundred hours and they just don't see us This the mountain of paperwork. We're doing you know for hours and hours and hours on the computer. They just you know See us with the photographer see us put a sign in the yard and we call them when they got offered they don't realize All of this work In the back end to be able to present this offer and that was why I wanted to have you on here because you had that success with that And it got me thinking so I went on Grock and I said do research on all the new construction What's going on in the new construction world for agents who are struggling right now? Maybe that's a path that they want to pursue right and Was it you that was telling me that you could go to build a relationship? I think you have it with dear heart and where you can go there you can promote their listing as you know Don't let you brand it to yourself and you know, we use

4:21bold trail so yeah, you can go to bold trail take your listing yeah, they I see our M and And brand it to you and with their permission of course and most of the most of the builders will let you they just want to sell them You know, and they don't mind paying the buyer's agent to sell them So your even for agents that don't have any any listings or good listings and you know the market slow and You know, I just heard recently that for the first time ever new homes are selling For less than use-toms because the reason for that I think anyway is because they have a one-year builder loan Mm-hmm, and they're they have to sell it their motivate yeah, and people with use-toms Sometimes they're motivated if they have to move but those people that are just Seeing if they can sell it They're just not selling They're not motivated. Yeah, basically I've heard lately that sellers of use-toms are chasing The price lower so the price is going down down down and they have to lower

5:25You know below that next stair step down to get attention and get sold and most sellers Well, you know a lot of sellers that I work with the use-toms are like well, there's way for the market to come back We're just not that motivated, which is fine You want to get the most you can but but also if they're buying and selling I try to help them understand It's a good buyer's market now So you may you may come out not as well as you wanted to on the selling But you're gonna get a deal in the buyers and so it all really kind of comes out of you. Yeah, that's a valid point Randy Well, and I was thinking with this new construction Especially if you go build a relationship with the builder and you market it yourself and you do like you're using what's the name of that company you're using for the AI videos yeah, it's called virtual tour about AI Yeah, and that's just one of them, but now I Pop my eye the other day when you had this house and it was like it pops out because it's different Yeah, it's different you got to do today

6:26You took a headshot and put me standing in front of the door is if I were there like I had spent a couple hours in a photo shoot and it was 20 seconds for AI to do that with the listing pictures Yeah, and it was it was it popped and it was unique and That's the marketing piece of what agents have got to do to start getting better and that's really the goal of this whole podcast today Is to talk about what agents can do in a challenging market where there are opportunities and how to be different They cost you the least amount of money Exactly. Yeah, because we're all watching our pennies Well, AI has really helped because paying a Photographer videographer was $700 per listing and this virtual tour dot AI is 39 bucks a month for 10 10 per month Which is great and not many people are doing 10 per month right now, so no, no, I'm not Yeah, I wish I hope

7:26So I think what the lesson here is number one you need to be going to the new construction sites in your area and finding out you know If they have incentives for the agent as are as well as having incentives for the buyer Because you were talking about the buy-down rates and let's talk about that a little bit Sure, yeah, most of them have the the 2-1 buy-down where It's like 3.99 for the first year 4.99 for the second year and then 5.99 for the third year A lot of the big builders are have relationships with banks that will discount it or some of them It's real big ones play the bank to themselves so they can they can do the rate whatever they want Regardless of what the rate is out there in the marketplace So you know, that's one of the reasons I think that that new construction is more appealing what I found is It's a lot a lot of times it's young couples and the lady wants to move in ready house and the guy wants a hundred acres

8:28I say jokingly he wants land and but you know at the end of the day a lot of times They just it's nice and it's they're usually small lots But they usually have a small HOA that's not too expensive and they have a clubhouse and they have a pool and it's it's real nice for young couples with the small children Well, the way I see it is they get to foot in the door they got to foot in the door to the buy Opportunity where tip you know historically the values have gone up so right so now they've got where they're in a position to be earning equity Now yes their rate is going up and then they do have to be prepared for that and plan for that I like it better where it's going up one year at a time so right Gives them a little time and hopes the rate will go down but no guarantee and the Yeah, there is no guarantee because it's only for three years that it's doing that and then the fourth year what what happens? It's whatever the rate go back to market rate Okay, and that really has to be discussed like you know

9:28You talked to me like I'm a high-eye on the personality style, which means I don't pay attention as much to the details So all of a sudden year five is here and I'm like our four is here and I'm like oh, I didn't plan for that That right has to be a lot of people are looking that they can swing the pace payment to get in But that's the first year 3.99. They really need to look Can they squeeze three years from now? What the pain would be at 5.9 because it's going there unless let's they get luck in the rate does go down right it could go up It could go up so we got down to 5.9 Right before the war started and now I hear we're averaging around 6.75 I don't know Of course that depends on credit and all that yeah, all that's good But the truth is what I did also read with Groc is that The builders are holding their value of the price of the home. They're not reducing the price of the home for say

10:29Some may but the majority are kind of holding that from because they don't want the values to drop in the neighborhood Which affects everybody's thing and now you want the one they sell is the comp for the next one So that's important piece and And I think as the agent those are your little catches that you want to watch you Not only do you want to educate your client like here's our reality of where this can go if you can do this don't do this Exactly exactly. Yes, I do get paid a bonus in today's world There's a lot of extra things that we're working on. I'm going to negotiate as much as I can to help you get more but the other thing is I one thing I read it was about the lender so the lender sometimes can have points within it and that it appears like they're getting a way of all the deal but they're actually charging more I wanted to say right One is 1% loan rate right? Yes, like buying the rate down is that what you're talking about yes

11:33Preferred lender trap demand a loan estimate from the builders lender take the LE to an independent lender loan estimate to the independent lender for stress says If the builders lender is charging two points in fees to give a one point rate credit the incentive is a mirage This see my last buyer did that they were very savvy and they they got the loan estimate from George D. R. Horton and then they went to Local lender that I recommended and he admitted he couldn't be because they were giving them 5,000 Incellipay closing costs on top of a real cheap rate and he's like I Can't you know and they weren't they weren't taking advantage of them on points. So you know, I whenever I did I haven't done new construction and ages But when I did I always suggested that they go to an independent lender just to see and there was never a time that that

12:33That the builders lender wasn't better So my guy yeah, it's sad to say and in this case it didn't happen because this buyer wasn't pre-approved yet But what happens a lot in the past is you know you connect them with the lender the lenders worked and then they drag them away from Because they can beat it and they're like and they try to beat it and they can't and you know No buyer's gonna stay just because they like them if it's gonna be thousands more and you can't blame them and That's that's kind of a downside to what happens a lot but it didn't this time that they they they weren't Didn't have a pre-approval so that's kind of it kind of works out good. You usually want them to but in that case It's really better if you're not dragging them away from the relationship and time spent with a lender Yeah, and with new construction I always insisted on full inspections of the house. I wanted to Especially the roof, especially the roof because they're building them so fast because they've got a time Like you get done they are and it's

13:34the mistakes happen and That's how you get them honored right away before the closing right and they will fix it if you find it Yeah, and they will fix it they have to stand by for a year as Directly for 10 years, but I've heard the numbers on that on a used home 90% get a home inspection on a new home only 50% But I always I always highly recommend because I've done new construction Where the 220 was wired wrong and the stove didn't work and the hot water heater didn't work and yes The you know if the person didn't do the home inspection and didn't know that they would have made it right But picture this you're moving into your dream home and everybody's so happy and you can't cook your first meal Your range doesn't work You know, and don't you just need to know that's the best for $500 you could ever spend Especially and in the roof because they're doing the roof I've had more issues with the roof. I want that because you get water leaks now you got bigger deals that yes

14:38They'll fix it, but now you got maybe stuff you stored in the roof. It's now got damaged and And then you know what I'm doing the cheap three-tab roofs on the new builds Which is another thing Yeah, yeah, our contextual singles on a lot of a lot of the you know the quick new builds. Yeah, it's a 15-year roof And our contextual is a 30-year roof a metal roof, which isn't as pretty, but it's a 50 year well, and and I started learning I think it was really early last year about the insurance Situations with roofs like if I got a listing and the listing was a 14 years old The roof was 14 years old. Right. I I tell them before we even make an offer on it We got to call some insurance companies to find out would they ensure this roof? Because it's not going to ensure that roof that has to be part of my negotiations I don't necessarily more picky insurance companies are yeah north Carolina. It's 15 years is pretty much the mark

15:41Well, they're tired of everybody getting roofs for the insurance companies paying for them So they met my son got a message from his insurance company like you need a new roof We're gonna cut our insurance guys gonna come by with the next couple months and see that you got a new roof You know, yeah, and he got a new roof see I don't know if you know this You know how you have a credit score every person has an insurance score You know, I've heard that but I never paid any and the insurance your insurance score is You get tagged if you're the person that gets a free roof every time there's a hell store. Oh sure That insurance rate is higher than somebody that says I'll just take care of it myself and let's replace burns down. Yes And because they have to assess their risk sure makes it charge you accordingly and I know people don't like it and we want everything free But yeah Business and they're looking at their numbers. I think the bottom line is for the realtors out there I think you need to go check out new construction

16:42Yeah, Courtney someone you were working with that's here in North Carolina, but there's plenty century homes is the big one Yeah true homes And the thing is just build a relationship with the the person sitting in the model. Yeah, because their board Because the market is slow and that friendship will go a long way and most of them will let you market them as if they're your listings and that's That's a big deal Yeah, and a lot of times they have a house to sell and if you've got a relationship with that guy or gallon there They may let you know that hey they got a house to sell you may want to try and get that done Because it sounds like they got to sell that first before they can move in here. So let's do Yes, so that's an opportunity there. So Right okay now let's switch gears. Let's talk about leads. Let's talk about agents that are paying because I know you've paid for these for years I did it in the beginning and I just never found results with the leads so but you've been

17:44Well, you're right it all comes down to cost for lead and conversion rate And I'd learned that in one of the the exp world classes years ago. So how much you paying for that lead and what what percent the average realtor closes 3% In other words, if I give you 100 leads, you're going to close three and that's somebody that's working it pretty good Zillow flex teams are expected to close 30% or they get kicked off the team Wow Yeah, and I was on see you at Zillow flex and got kicked off the team because we didn't send enough people to the zillow homeloms people we were doing the 30% Yeah, so but yeah, I've bought I've got five charged up credit cards to prove it I've bought I bought everybody there is to buy from and Yeah, I started out in 2012 with Zillow I could tie up my little town for 150 dollars a month and built the business that way but now it would be thousands and you're not even allowed to buy leads unless you join Zillow flex and then they take

18:5140% of your money besides your firm split. It's just not worth it Oh, I didn't know it was on I didn't know you got double lammied Yeah, yet well that everybody that had they had their credit card and they were just charging them for leads In the big towns including Charlotte not everywhere, but in the big cities So like when I'm doing that anymore, we want experienced agents that will close these that will take care of our customers and we only want Seasoned agents and there the season agent is allowed to be on the zillow flex program and the new agent like I was in 2012 they're just not allowed to buy because they're just not experienced enough to even now realtor.com Still sells them, you know, I told you that $60 a lead and shared with another agent homes.com has a little different approach since they got bought out by co-star, which is a commercial company They Send the lead back to the agent. They're not trying to get do a agency

19:52They just think that the listing and you probably knows more about that Listing than anybody else and it's the best person to call and then people that partner with them And I still that's the only thing I still do besides besides the jkender thing Which I think you're probably going to talk about here in a minute, but um Yeah, I do with them because because they They go on websites and they retarque. In other words when you're looking at one of my listings And it follows you around and they they pay a lot of money for that and so I can buy into that and it's it's Did any of those train you on how to do the calls? Yeah, they all have classes, but I don't know if I've ever sat through too many at that EXP class I did sit through to be honest. I've always been motivated by poverty When when the checkbook gets low hit the phones. So yeah Yeah, I think that's what a lot of and a lot of agents are scared to do that right now They're looking for an easier path and that's something that you and I have tapped into just two weeks ago

20:58Really excited about it We have an opportunity to introduce agents to this and What I'm excited about it is it's AI driven so they had a proven Funnel lead system that was already working then they brought AI into it first And you just experimented with this yourself where you used AI To figure out the territory that you live in based on your niche Where should you be from working in your own little area and it completely switched you over to my To a couple different towns because that's where the business was and you've been working in a kind of dead zone And that's why there's not as much business. So just the AI piece Well, this is something they've not only incorporated into for the agents that are going to choose to participate in this But the price per lead wasn't it around three dollars a lead three to four dollars Is is basically giving you said he can

22:00Give you 100 leads a month for three hundred dollars So that's the answer the three hundred dollars is the ad spend right yeah exactly exactly that's not Money to him that is money given to To meta basically. Yes. Yes. Is where it's at. So it's amazing. He's basically figured out what we've been Trying to figure out and have to some extent But got it figured out got the people to To get you there and work with AI to know your niche and and get you there quickly And he will they come back here and work with your own CRM. I They were talking right and early with bull trail are yeah bull trail However within bull trail that there's all this AI interaction So you're not necessarily beating the phones like you were It's a lot simpler process and because of all the funnels that they're doing so people if you're interested in that Randy's information is going to be in the description. So it's mine of course Either one of us can help you with that. So whoever you are and it's exclusive to certain agents that yeah

23:06You know have production. Yes, and Yeah, you have to have hustle. This is this is about energy hustle and commitment as in anything that you want to succeed in Those are your components and your attitude right? So if this sounds like you've been paying for leads and you don't like that You need to reach out to one of us because right you can explore it and decide do you want in and if you do Man, they'll train you they'll do everything. It's amazing. So Go ahead look to no brainer for me because I was spending 350 a month with realtor.com and getting 11 leads So and sharing them with another agent. Yes, so do I want to continue that or do I want to do this for 300 a month and get a hundred leads and have a I driven Things to where people know like and trust you already From when you already you you successfully did this you got further than I did you completely clung yourself digitally it looks like you're sitting there walking talking and

24:08And it's AI. Yeah, that's what he's helping you know his people do yeah, and it was his son It kind of brought that piece to him and so that's what's happening AI integrated into everything we do and it can be much more efficient than us It can make things cost less big for us and that's it we need savings right now We need real quality leads of people who really want to buy and sell because it's not just buyers Spires and sellers. It's however the niche is set up and If you told them hey, I want this kind of niche and the AI comes back and says There's not enough leads in your area for that niche. We need to fine tune this. I love that That's the integrity of it all because like let's say I wanted to sell waterfront homes that all were like 5 million and above and I was hoping for a hundred leads a month Uh, in my inventory what front I can't get you hundred leads. Yeah, but he said you could get a hundred leads a month for anybody anywhere But yeah, you may have to you know loosen up your niche you make it you may not be able to just do one subdivision

25:14You might have to right you got to branch out enough to have enough of an audience Well, we have a webinar that we can invite you to and that's the only way you're gonna find out about it So you've got to reach out to either one of us for the webinar Not gonna put the webinar link in here. You got to reach out to us personally We got to enter to you and see if you're a fit for this and if you are It may be great. It may be great Well, Randy, this has been awesome. I appreciate having you on here and Talking about the new construction because the goal is to help agents through challenging times It can beat you up. This business can beat you up Yes, a lot of people got out and what 70% didn't sell anything last year. Yes, we can We don't have it all figured out, but but we're still here and we can help you stay here instead of get out Yeah, and we survive COVID so you can survive right? Well, yeah, I'm a mentor as you know and the first thing I say I asked them what their plan B is And if they say I don't have one I say good and if they if they say the heaven I said well you probably should go do that

26:18This is gonna be way harder than you think it's I love their Andy. I love that. Well, thanks again for being on here. I really appreciate it and I love the buffaloes in the back Because you know the the mission of a buffalo is when they get a storm They run to it where the cows are going those guys are That's us and that's that's why you have the buffalo hard group. Yep, and you are up in your air being B up Yeah, and coincidentally, yeah, those are buffaloes here because I have an air being B where the hat film of quad trails are And they ride four wheelers here and it's on buffalo mountain the buffalo mountain trailhead Yeah, there's a little swing over looking the town of Williams And that's the most visited spot in the whole trailside and that's like a 20 minute trail ride From here. It's a yeah, it's a large house that I rent so it's called buffalo playhouse So look it up a fewer rider And thanks everybody for joining us. Please subscribe below and don't forget you can reach either one of us in here and check out these leads

27:21If you're not the hustler, but you know somebody who is they could benefit from that Tell them to reach out. We'll see if we can help them Let's book a strategy call and see how it look in your eyes and if you're thinking man I'd like to have a conversation with Kathy Burns Maybe I'd like to be part of this EXP company and see what it's all about That sounds good to me Let's book a strategy call unless have a talk no pressure Man it's worth a conversation the links in the description