193 Teaming Up: Home Builders and Agents - Bill Gaul Nov 29 2023

Episode #193: Bill Gaul

Greg Bray: [00:00:00] Hello, everybody, and welcome to today's episode of The Home Builder Digital Marketing Podcast. I'm Greg Bray with Blue Tangerine.

Kevin Weitzel: And I'm Kevin Weitzel with Zonda and Livabl.

Greg Bray: And we're excited today to welcome to the show Bill Gaul. Bill is the CEO of buildersupdate.com. Welcome, Bill. Thanks for being with us today.

Bill Gaul: It's my pleasure. Thank you for the opportunity.

Greg Bray: Well, Bill, why don't we start off and just help people get to know you a little bit? Give us kind of that background overview of who you are and the kinds of things you've been working on.

Bill Gaul: Well, thank you. I come from a very corporal background. I was in the military for a number of years [00:01:00] as a helicopter pilot. I didn't want to do that. The promotions were slow. I got out and went to work for a company that only hired Harvard MBAs, which I'm not. But I was lucky enough to learn a lot about business from these guys. And I also realized that there was a lot of men and women out of the military that could do these jobs, so I created my first company helping veterans find employment.

And then from there, it's very similar to the home building industry. Being a headhunter you got a headhunter, you got an employer, you got an employee, a prospective employee. Home building industry, you've got a home builder, you've got an agent in the middle, and you got a buyer. So, the combination is the same, and I had already developed the functionality for that.

And when I sold that last company to the Weather Channel, I decided to get in the home building industry because I love new construction. It was very hard to find new construction anywhere. Agents didn't even know where it was. And I was able to aggregate all the information in one spot and got it patented.

Kevin Weitzel: Weather Channel? All right. So, Bill, let me ask you a question. We need to know something about you personally that our audience will learn on this podcast. Can't be home builder-related.[00:02:00]

Bill Gaul: I don't think many people know that I was the Tinker Toy champion of New Jersey. I actually have a plaque on my wall or someplace that I actually won, when I was eight years old. I'm dating myself I know. Tinker Toys, I don't know if they're still around or anything, but I designed something that's actually in their catalog. If you bought a thing of Tinker Toys with a little paper catalog, there's my item. So, I was the Tinker Toy guy. I didn't get the national, but for eight years old, I got it for New Jersey.

Kevin Weitzel: That's cool.

Greg Bray: I'm going to say that there are probably people listening that are not familiar with Tinker Toys. We'll have to track down some links and pictures to stick in the show notes here for those who are not familiar with Tinker Toys. But I had some growing up.

Bill Gaul: It was either Tinker Toys, Erector sets, those little screws, and nuts you always lose and swallow, or Lincoln Logs. Do they even make Erector sets anymore? I think that that's a child disaster right there.

Greg Bray: I don't know, but Lincoln Logs, I had Lincoln Logs too. Yeah, definitely,

Kevin Weitzel: You guys obviously lived in very rich, prominent neighborhoods because in my neighborhoods we had [00:03:00] rocks and dirt. So, you know, you were just sent outside, hey, go play in the dirt.

Bill Gaul: I did that too. I would love, with Matchboxes or Hot Wheels, I would go out in the dirt and I would build roads and get sticks and build bridges and fill the little lake with water that would never sit there. I never understood how that worked. It was so much fun. My most fun was when I found a box, a big refrigerator box, or something, and I would turn that into a rocket ship or something cut out holes. I have that kind of brain. I just like to create things out of nothing.

You know, it's sad now. Now you get toys that play by themselves and all the child is there and looks at it. The key about being a child is being creative and let your brain work. Whenever I found a box, I would bring it home to my kids to turn into a tunnel, to a house, a spaceship, whatever it is, and we had a lot of fun with that.

Greg Bray: Well, and on today's episode of old guys talking about their childhoods.

 It's great, but let's learn a little bit more about [00:04:00] buildersupdate.com. Tell us kind of what your company is about and the kind of services you offer.

Bill Gaul: Thank you. Builders Update was created to, and I went and flew around the country and met with builders, met with agents, met with brokers, to see, before I invest a million dollars in this thing, is it something that people want besides myself. But they all said, yes if you can do that, it hasn't been done before.

I wanted to aggregate all new construction from only builders that are willing to appreciate agents. So, we only have builders that are willing to pay compensation to the agent. We're not Zillow, we're not Realtor.com, and we wanted to inject the agent in the process. I spent a lot of time getting the system patented.

So we have tools in there. We time-date stamp all our data. We have an electronic buyer registration tool. We have a free lead generator for agents, and we're nationwide. We have about 675,000 agents using us nationwide right now. Hope to get that to about 900, 000 by the end of the year. We have numerous MLSs that adopted our technology, but we have most of the builders out there that are willing to pay commission.

Greg Bray: So, what is it, Bill, [00:05:00] that made you see this disconnect between realtors and builders that you wanted to bridge? You're trying to bring people together. Why weren't they together already? What's the challenge?

Bill Gaul: There's a genuine mistrust between the builder, the agent, and the buyer. The buyers want to bring the money and they're thinking like, what are they getting for it? The agent is doing all the work. They're finding the homes and they need to be compensated. The builder, who maybe makes 15, 20 percent commissions, they see an agent walking up and they think their job is so easy. All they do is walk up with their Mercedes and they get 3%. So, there's this genuine mistrust.

But what I've realized and showed them is like, how long does that house have to sit in the market unsold? What's your carrying cost for that home versus a 3% commission? And you can sell the house when it's in the slab stage or framing stage, get your contract, take it to the bank, get your money, and go build another house. You're in the business of building houses. So, I just wanted to make everything on a level playing field and let everyone appreciate what they do.

I'm the chair of the National Real Estate Standards Organization, for example. [00:06:00] I'm trying to bridge what the languages in the MLS data dictionary and what builders use, so the two systems can talk to each other easily. Right now, it's like putting a round peg into a square hole. These are the kind of things and the efforts I'm trying to do, as well as out there advocating for agents. Trying to sell builders the advantage of working with agents so that you can bring in more buyers and save them time. Because what they do is they build a home, they build it really well. Do that. Let the agent sell the home for you.

Kevin Weitzel: Well, Bill, there's plenty of builders out there, they don't have, you know, a sales team of ten people. There's builders out there, custom builders, that try to, you know, wear all hats and they don't have any salespeople. So, I can't see this not being a fantastic tool for them. Right?

Bill Gaul: Well, without a doubt. And matter of fact, we built a separate module just for custom builders. Because one of the questions we get from agents is I got a buyer that's got money, that's got land, that got plans, they want to find somebody that can build their house for them. But that guy is not in the MLS because they don't have a spec. They have nothing there. So, how do they find these guys? We built a module just for those [00:07:00] people. And that way we become their marketing team, their sales team, and they sell homes. Simple as that.

Greg Bray: So Bill, why don't production builders, I get the custom folks not having anything in MLS, but why isn't just putting your specs in MLS good enough to get you in front of realtors? What is still missing for a lot of builders?

Bill Gaul: A lot of production builders will put in their model home. Maybe one or two other houses, but these homes are cookie cutters, model A, model B, model C they're all the same, maybe they reverse a couple of them. When you're putting the home as the MLS, you have to list the sales price you sell it for. And that means the next agent coming along we went forward to another home in the MLS, they know exactly what that one was sold for, and they want to work hard for the buyer and they're going to try to get a better deal than the other one that sold.

So, it's like, if you went to a car dealership and you want to buy a Jeep and you show up at the dealership, you see a Jeep driving down the road, say, how much did that guy pay? They're not going to tell you. They want to start at sticker and go up from there. Same thing with homes. With us, we don't record the [00:08:00] sales price. We have all of the 2D builds, the coming soon, the quick move-ins, everything. We got everything, and we keep it all updated with time-date stamps, so the data is not over a week old.

Greg Bray: So, these builders have this trust issue with the realtors. They feel like the realtors don't do much work, right? They just show up and they want to check, right? Oh, here's my buyer. I introduce you for five minutes, shake hands, and I deserve some big commission, right? What's really going on? What is it that realtors might be doing that the builders don't maybe understand or give value to?

Bill Gaul: That realtor has probably spent six months with that buyer kissing frogs to see which one turns into a prince and they don't even know what they want to do. They are out there driving from home to home, and they want this part of the city, and they really want that part, or they want how many bedrooms. They spend an incredible amount of time, and all of that is done pro bono at no cost to the buyer.

So, at some point when they are able to find that frog that turns into a prince, [00:09:00] your home, as a builder, what you're really doing is paying for the six months they spent qualifying and educating, and building trust with that buyer because now a builder has an ally. When they leave that model home, that agent all they're going to do is talk about your home, not the other homes. That's what you want to have. You want to have an ally.

I see a lot of builders that only use agents when the times are tough, and then when the times are good, they walk away, and they don't remember it, but you build a relationship over time. I would really want builders to think of that as a long-term investment. According to NAR, 74% of new home construction is sold by agents, 74%. If you're not making that many homes from an agent sale, then someone is eating off your plate. I can tell you a big builder, it's the largest builder in the country, they sell 92% of their homes through an agent. They understand the value of what the agent brings to the party, and it's built into the marketing cost.

Greg Bray: So, with these builders trying to now, okay, I see [00:10:00] value in the agent. I'm comfortable, you know, compensating them in a way that, you know, is a win-win for both. Are there other obstacles that get in the way between builders and agents besides just this kind of commission-wrangling piece that kind of make those relationships a little tougher than they need to be?

Bill Gaul: I think that you know, there's a lot of information out there available to agents and where they can bring that buyer to. I think the key is to make it as easy as possible. As Kevin mentioned earlier on, some of these are small builders. They don't have a marketing team. They don't have time to do all that. They want to build a house. You don't have to build four color brochures and hire somebody to run around from broker office to broker office, stick these brochures in the cubby hole.

Or I see agents grab two inches worth of paper over the trash can and throw that stuff away because they don't have a buyer. They don't have a file cabinet at home to stick it on. But next week they could have that buyer. So, what we've done is on our site also is created the electronic incentive module where they can actually upload a PDF and [00:11:00] create it. We upload it, set a start date, set an end date, and away it goes. It saves so much time. It's not tedious. And it's also the fact that when you're dealing with MLS, which I would encourage them to do with the MLS, it's just a very tedious process. We'll take care of all that for them for the low fee that we charge.

Greg Bray: So, what's involved in actually getting listings on to Builders Update from the builders' perspective?

Bill Gaul: First, they have to register. It takes about 30 seconds. Then we verify their email to make sure it's real. And then we ask for additional information in terms of the metro and how they're going to get their data. Some give it to us by XML. Some builders can spell XML, but we end up taking that data ourselves. We get it on board, but we do quality control.

For builders, all they got to do is two things. Register, tell us where their inventory is, where their website is, and pay the bill, really. We have all these tools in terms of reports and leads that we can get to in real-time. And I would encourage, if an agent comes to your home on our site and they look at it two or three times, you need to be on the [00:12:00] phone or send them an email and say, Hey, why don't you come out to my site? Let's have a cup of coffee. Let's talk about it. Bond to that agent. And you got to do it in real-time because if you're not doing it, your competition is. I can guarantee you that. The trick is make relationships with these agents.

When you sell a home to a homebuyer, you sell one home, and that's where a lot of builders spend a lot of money trying to reach a consumer. With the help of an agent, you can sell ten homes because they have ten buyers. So, it makes a lot more sense in terms of your time. Going back to once again to Kevin's remark, they don't have a lot of time. They're small. They don't have time to go out there and court these people. We've courted them already and we're going to bring them to them.

Greg Bray: And Kevin, you've learned how to spell XML now, right?

Kevin Weitzel: E X E M E H L, X M L.

Bill Gaul: You know, you were a former Marine, so I'll give you that benefit.

Kevin Weitzel: Hey, Bill, I still write all my employee papers with crayon.

Bill Gaul: Ah. Purple crayon? What's your color?

Kevin Weitzel: Oh, it's gotta be a shade of green, for sure.

Bill Gaul: Oh, okay. Of [00:13:00] course. Fair enough, fair enough, fair enough.

Greg Bray: Yeah. So, for those who don't know how to spell XML, that's the file format, right? A way of formatting the data to be able to make it easy to import into another system and exporting out of your system. So, Bill, that's great that you guys make it easy to move that data around and get it in there. Because some builders have that already because they're working with some of the other providers out there, like Kevin over at Livabl and things like that, that take similar types of files. So, that's great.

Bill Gaul: I know you, Greg, provide that ability to create your XML from your site and syndicate it for them. So, that's another benefit. Any of your builders that you're working with, it's so easy. And we have a free version. You can give us your data for free. There's no cost and no obligation. Let me give you some visibility. Let me send you a weekly email showing you how many leads you missed out on because you won't get them back. That's it.

This is what I'll show you. We'll show you the actual inventory. You can't see the name, email, and phone number, but next week we'll do the same thing. We'll do it again. Until you wake up and realize, we're missing out on these leads. Let's sign up. [00:14:00] And it'd be so much easier to work with you too, Greg.

Greg Bray: We've talked a lot about the builders and kind of their view. Let's switch over to the realtor side a little bit. What is it about new construction that makes realtors maybe less comfortable than some others? Is it just the time it takes? Is it just they're not quite comfortable? What are you learning from the realtors about new construction?

Bill Gaul: When we started this, it looked like about 5% of the agent community was comfortable selling new construction, and we wonder why. It seems so easy. The nice thing about working with a builder versus a resale is you remove the emotional content. If I buy the house and I want that chandelier. Well, that chandelier has been in my family for 200 years. I'm not going to sell the chandelier. And then you get this very much of a disconnect when you're dealing with a resale.

With new homes, it's so easy. What color? You want the kitchen green? We got it for you. No problem. I'm sure that makes Kevin happy that it's green. But the opportunity is to facilitate the process. To answer your question, a lot of agents didn't understand the construction process. They don't [00:15:00] understand it goes from slab to framing to plumbing to HVAC, you know, the different stages and it can take a long time.

What builders have done in the past, I've seen, is instead of just paying at the closing, which could take nine months, 12 months later, they've been making progress payments throughout the process. But I tell the agent, that's like money in the bank. You've done your job, you stay in contact with your buyer. Onsite usually takes over at that point in time. They can work with them in terms of their color choices, knobs that they want in their kitchen, or whatever. But it's just so much easier. But I think that they just want to be done with it, whereas this is a more of a year long process.

And they also feel like sometimes builders have taken advantage of them in terms of, they brought the buyer in and they sold them on this home, but then they don't get the commission for some reason. They said, Well, you weren't here. That's where we developed our electronic buyer registration, so the agent doesn't have to be there. They notify the builder that this is my buyer, and when that buyer shows up, the builder is guaranteed that they're going to pay that agent commission. I call it the But For [00:16:00] Rule. If it wasn't but for that agent, that buyer would not have walked into that house. That's my, I'm going to get a trademark, But For.

Greg Bray: No, that sounds like it could be a very interesting logo that you could do with that.

Bill Gaul: Yeah. I don't know. I said that when I was doing a presentation at RISO. Melissa King, who is now a CEO of an MLS up in the Northeast. She looked at me and it's a panel discussion, so they all had the questions ahead of time. I had the slot right after lunch. Everybody's in there, but they're not really there. They're checking their emails or on their computer or whatever it is. But I turned my panel discussion into a game show, and I gave each panelist a button to press when they knew the answer.

And then when I mentioned talking about But For, Melissa went, What? What is But For? What? And I go, where's your mind? But I think But For makes a lot of sense. And once again, it came from the headhunter rule, is that if it wasn't but for that headhunter introducing that employee to the job that wouldn't have happened. So, they need to be compensated. Very simple concept in the real estate community as well.

Greg Bray: [00:17:00] So, if a realtor is saying, okay, I haven't done a lot with new construction. I'm going to give it a try, and they walk into a builder. What are some things that a realtor can do to help kind of grow that relationship with a builder? You mentioned the builder builds a relationship, they might get ten sales instead of one. Well, the same thing, it seems like could come from the realtor. It's like if I can build this relationship, then we can get something that fits better and faster for my buyer. How do they kind of grow the relationship from their side?

Bill Gaul: I think number one is the agent needs to do some investigation into that builder, their history, type of homes they build, where they build it, the quality of the construction. There's some builders who are much better than others. And then they will feel more knowledgeable with their buyer that they're an expert in the new construction field.

And by going out to the builder ahead of time, before they bring their buyer out there, introducing themselves, understanding, almost developing a questionnaire. How long is this home going to take? Am I going to be paid for the home or be paid for the options as well? If I'm going to get paid for the options, I'll help [00:18:00] you sell the options, but if I'm not going to pay for the options, I'm just going to sell the home and I'm out of here.

You want to know is during the nine months of construction, when do I need to be involved? When do you need me to be here with my buyer versus when the buyer can come by themselves? Understand the game, the rules of the game, and then you can play the game. The more you understand that builder and their process, because every builder is different, then you're able to bring your buyers and more comfort knowing how it's played out.

That's what I would suggest is get to know your builders, get to know their inventory, and stay abreast of that stuff. Because we release all the new communities when builders come on board ahead of time and the agent will know stuff before the buyer does, and that's what makes them valuable.

Greg Bray: I love the idea that you just mentioned though Bill about asking these questions. You said that builders can get frustrated because the agent's not around, but the agent may not know that they're supposed to be around, or when the right time is because nobody's explained the process to them. I mean, Kevin, have you run into some of that disconnect sometimes?

Kevin Weitzel: No. Yeah, yeah to all of the [00:19:00] above. I even want to expand on that, Greg. You know, Bill, and not to play devil's advocate here or to put any blame on certain realtors that are out there, but when you have people that go through realtor school, you have the top of the class, you have the bottom of the class. You have people that just barely make it through. You have people that are really, really, really bad at the job. You know, you've got that 90/10, 80/20 rule. Do you have the ability to filter, as a builder client, to say, you know what? We've worked with Billy and Susie and they're horrible. We can't have them part of our purchases anymore. Can you blacklist them?

Bill Gaul: No, not really. I think that would be discrimination is what I call that. But you can be more responsive to the ones that are selling your homes versus the ones that are not. It comes down to you're gonna support the people to support you. That would be on the top of my priority list versus ones that are pains.

Unfortunately, in the realtor community, there's about a 25 percent turnover every quarter, every quarter. They think all I got to do is buy a nice car [00:20:00] and drive people around. That's called an Uber driver. Okay. So, I always suggest they learn the business, learn the trade, and work hard. Find those leads, qualify them, and then sometimes nurturing them.

You know, you got people out there that got a champagne taste, but a beer budget. Maybe that person you got to put into an apartment for a year and let them get their credit score up so that they can afford a home, that sort of thing. And then, of course, that person, you put them in a starter home, and then they have kids, and you move them up to a bigger home. Before you know it, they make money, they get a millionaire mansion. So, you work for that person.

And the other thing about it, they all have referrals. They all have opportunities. If you treat somebody well, they have friends, and they're going to be recommending. They're out there as your silent salesman. So, just do it right. But, unfortunately, I agree with you, Kevin. There's some agents that they're in the wrong business. They think it's easy, and it's not easy.

Greg Bray: Well, Bill, this has been a really intriguing conversation because I think there always just seems to be this tension between realtors and builders. Do you have any kind of last thoughts of advice about [00:21:00] how we can help these folks come together better?

Bill Gaul: It's called an olive branch. And to be able to work together, understand everyone's different perspective on what their motivation is and what they need, and listen to people. Any good relationship is based upon honest, open, and timely communication. That's what it comes down to.

Recognize that if you're not talking to that agent, someone else is. So, use that opportunity to invite them out to your home, have the agent become educated about your product, and then they can go out there and become your salesman out there talking to people. Because if they don't know your product, they don't know your location, they don't know what distinguishes you as a builder, they can't sell you to their buyers. If you have flyers, you have opportunities, information you can share with them, then so much the better. It comes down to communication. That's what I would suggest.

Greg Bray: Well, Bill, if somebody wants to learn more about Builders Update or reach out and connect with you, what's the best way for them to get in touch?

Bill Gaul: You can either call us at 512-901-9899 or simply email us at [00:22:00] info@buildersupdate.com. if you're a builder. I tend to concentrate on the builders, you can always reach me at 512-850-8878 or my email address is easy, bill@buildersupdate.com, and I'll be happy to answer your questions.

We'd love to get your data. Once again, I mentioned before, it's free. Just give us your data. Let me show you it works. I'm not going to tell you it works and then a quarter later you got nothing for it. I'm going to show you it works. And if it does, then at that point in time, I hope that you'll end up being a premier member of us.

And then just go to our website at buildersupdate.com and click on the big blue box for builders. And then there's a page there with all sorts of demos and testimonials and videos. And at the very bottom, there's a matrix to show you what you can get for your 200 per month.

Greg Bray: Well, thanks Bill, for spending time with us today and sharing, and thank you everybody for listening to The Home Builder Digital Marketing Podcast. I'm Greg Bray with Blue Tangerine.

Kevin Weitzel: And I'm Kevin Weitzel with Zonda and Livabl. Thank you. [00:23:00]