I was wondering if someone can help me with this question, as a new agent, my knowledge is a bit limited on pre-construction. I have a client that is building a 150 condo unit and would like some assistance with the marketing and sales. Would I need to setup the optional choices for the buyers such as types of countertops, finishes etc. Or is it exclusively just the paperwork that would apply to me? What is the A-Z process of handling just a project in my position as a Real Estate Agent?
Any response is much appreciated. :biggrin
Pre-construction or under construction? If pre-construction where is the project at as far as development? Most states prohibit pre-sales prior to all entitlements, variences and permits being issued for the project! At this point deposits for units can be excepted and held in escrow and are refundable at any time prior to going "Hard" contract which occurs when the exterior walls are in place and the unit is weather tight and exists as an actual unit!
All hall ways, access stairs and fire / life / safety features are in place and accessable!
At this point a hard contract can be signed with earnest money’s non-refundable and start moving toward a construction final and completion of a unit!
Your client? Do you have a listing contract? Have they suggested working on a salary? Who is paying for marketing and advertising? Is a plan in place? Is a sales office set up on site? How many other sales people are you recruiting to work with?
A sales office will normally be open 8:00 AM through 7:00 PM Monday - Friday and 8:00 AM through 5:00 PM Saturday & Sunday!
Are there models being set up on site? Will there be an optional finishes display room on site?
Normally the project manager or someone in management will set up options as they are calculated for labor, materials and overhead in unit pricing (Square Feet, Square Yard, Linear feet, etc.) The builder / developer normally develops these options with the sub contractor, the material supplier and project management on site to ensure the team can change finishes without changing schedule or incurring unknown change order cost’s!
As a real estate agent, you sell houses, however this type of development will need a sales staff larger than one person, and a sales team needs to be developed in relation to the developer / builders sales expectations? What is your structure with your broker? Do you pay a percentage of your sales to your broker? Or do you rent a desk, hang your license for a flat monthly fee where you actually recieve 100% of your commission or sales?
You have a problem working for a salary if you have to pay a percentage to your broker? On the other hand maybe this developer / builder will negotiate a 4% or so commission structure with 1% listing / 3% buyers agency commission! Normally in this commission and listing structure your broker becomes party to this and your agency as a group would staff the sales office and work as a team to drive traffic for the opportunity to make the buyers agency commission. Normally the developer will set a marketing and advertising budget as a monthly allowance to drive traffic through radio, newsprint, fixed image and mass marketing / flyer distribution / mailing list programs to sell units!
Thank you, so much for the response, from the questions that you asked, I can say that this is definietly the beginning stages. It is pre-construction, and has not been developed yet. ( ground has not even been broken) Just confirmed that a few days ago.
I do not have a listing contract signed yet, but she does want to sign one with me. Seeing that I am new in the business, I just partnered up with someone in my office to assist me. I will be paying for the marketing, if in return the units are sold through myself and my partner? The structure that I have with my Brokerage, is that he takes a 30% cut. I will look into your suggestions and see if that can be worked in, because it does seem like a smoother transition.
I will let you know what has become of it, as I have a meeting with her today, and definietly need to know where she is exactly in the working process.
thanks again, for your input