When Sue Streeter started doing real estate broker programs in Las Vegas, Nev., 12 years ago, the strategy could be summed up in one word: shrimp.
"All a builder had to do was have a cocktail party with shrimp," says Streeter, who has been a broker and an on-site sales representative. "Times have changed. Shrimp is great, but the people who come for that aren't necessarily the people who will sell your homes. To get those people, you have to give them more."
Today, Streeter is the Realtor relations coordinator for Pulte Homes' Del Webb communities in Las Vegas. Her approach to real estate broker incentives is another one-word strategy: education. More specifically, continuing education classes which are required to renew brokers' licenses. It's been the perfect antidote to a common complaint -- that her communities are too far away from town for brokers to visit.
"Once you start bringing them in for education, they're exposed to the community and they feel comfortable bringing their customers back," Streeter says.
The options in broker promotions are virtually limitless; cash, trips, and cars seem to top the lists. But do they really help builders sell more houses? If the experiences of several builders we talked to are any indication, the answer is yes.
Dan Levitan, of Ft. Lauderdale, Fla., a trustee and past president of the Institute on Residential Marketing, says he recommends incentive programs "in all variations."
"There's nothing better than a broker's sale," he says. "It's virtually risk-free. It allows you to test your pricing in the market, they'll tell you when there's opportunities to raise pricing, and there's no cost until the sale."
Still, Levitan says many builders don't use it to the extent they should.
"I don't know why. Maybe it's extra money and it's not budgeted, but broker sales reduce your advertising costs. It's foolish not to."
Built for Success
A successful broker incentive program needs five elements, Levitan says. It needs to be consistent, creative, on-going, have varying levels of awards, and be as easy as possible to participate in.
"Our brokers don't even have to bring people out," Levitan says of the builders for which he consults. "We take phone reservations. Just send your customers out. We'll protect you for six months. We'll advance commissions sometimes when all contingencies are removed. Depending on the market, we'll pay a premium over what other builders are paying."
While cash is always a good incentive, Levitan says he favors programs that offer agents "things they can't get for themselves," such as trips and one promotion that featured mink stoles, jackets, and coats. Or it could be as simple as a gift certificate for a free dinner for dropping off a business card. A builder he works with has several themed holiday parties each year on-site, including a Halloween party with a model decorated as a haunted house. Each event features a prize of at least $100. At year-end, the broker who sold the most houses gets a Rolex.
"We're constantly in the brokers' faces," Levitan says. "When a customer comes into their office, the agent is thinking of us."
One simple promotion that dramatically boosted Realtor traffic and sales for Pulte's Del Webb, Streeter says, was a free day's membership to the Anthem Country Club. Rolled out when the community had about 18 months of product left, the program was kicked off with a cocktail party for pre-selected agents. A total of 800 invitations were mailed, Streeter says. About 150 guest cards were issued and 65 Realtors actually used them. The result was a 49 percent increase in Realtor traffic and a 47 percent increase in sales over the same time period the previous year.
"It was a really good event for that kind of facility," she says. "It accomplished what we wanted with minimal dollars."
One of Streeter's favorite programs was Fast Track. A 2002 award winner from the Sales and Marketing Council of the NAHB, the year-long program was designed to convert the Realtor who only showed and sold occasionally to one who sold consistently by providing accelerated commissions. To reach a maximum commission of 4.5 percent Realtors had to sell six houses.
"When you have someone who constantly sells your product, you award that person for their loyalty," Streeter says. "The more business we do with the same Realtors, the easier it is. They understand our policies and procedures and how we work with their customers."
Currently, Pulte Homes' Del Webb communities in Las Vegas offer quarterly top sales winners a reward dinner with the builders' Nevada division executives. All Realtors who sell a Pulte or Del Webb home between April 1 and Dec. 31, 2003, will be honored at a dinner in January 2004, with top sales winners receiving incentive awards.
Cash has done the trick for Hacienda Builders, in Phoenix, Ariz. Hacienda rolled out a Realtor Bonus Dollars Program in June of 2002. Hacienda's sales associates and assistants visit real estate offices near their communities each month and distribute Realtor Bonus Dollar coupons, worth $500, on top of the normal commission, along with maps, floor plans, price sheets, and other marketing collateral.
"Each real estate office and individual Realtor then has a copy of all our information handy for their client," says Karl Tunberg, Hacienda's vice president of sales and marketing. Hacienda's relationship with the real estate community has improved and co-broker sales are up by 6 percent from June 2002 to May 2003.
"We know that we've received sales from specific real estate offices that had never sold Hacienda Builders prior to this program," Tunberg says. "That is a new source of sales that we wouldn't have received but for this program."
It's in the Incentives
Daytona Beach, Fla.-based ICI Homes has done it all with agent incentives, says marketing director Rosy Messina. They've awarded lavish trips, presented expensive gift certificates and cash, and they'll continue to do those kinds of promotions, Messina says.
Earlier this year, though, ICI rolled out an incentive program designed to show agents they're appreciated year-round, with personal service and small, consistent incentives. Each showing agent receives a "thank you" note after each visit. With each contract, the agent receives a personalized gift delivered by an ICI salesperson. Several appreciation events are held through the year. Full commission is paid as soon as all financing contingencies are met and the permit is received.
In the first four months of 2003, ICI saw outside broker participation increase by nearly 15 percent.
"We are encouraged that it is the age-old consistency, coupled with the combination of high tech and high touch that is giving us our great results," Messina says.
How do you handle broker incentives in an extremely hot market? Kathy Courtney, director of sales and marketing for William Lyon Homes' San Diego division, sees consistency as the key. The company gives a 2 percent commission. It's less than some other builders offer, but it doesn't fluctuate with market conditions.
"We won't give you 4 percent to sell a house when the market is terrible and tell you goodbye when it's good," she says. "We give them 2 percent and we make life easy for them. Here in California, it's usually 3 percent and they complain about that. But they don't have to go to 50 re-sales with these customers. All they have to do is register their client and their work is done."
The result: Repeat broker business.
"They know us," she says. "Realtors are hesitant to bring someone in if you've been inconsistent. They don't know what kind of experience their customers will have."
Learn more about markets featured in this article: Las Vegas, NV.