Put a price tag on potential by working with developers

For the past several years, real estate professionals have been hamstrung by interest rate fluctuations and low inventory, combining to produce a lock-in effect that kept the number of transactions at historically low levels. If you really want to take control of your business, then, it’s time to get out of the realm of “what is” and into the realm of “what could be.” That means working with developers.

Developer relationships start when you show up with something that saves time, reduces risk and promises significant ROI. The agent who can speak to build potential on a property becomes a useful connection.

I recently talked with Breezy’s James Harris about how he’s been using UnderBuilt, a proprietary data platform, to identify the possibility in properties and partner with developers to bring it to life.

How to connect with developers: The pizza play

Harris launched his real estate career by door-knocking teardowns for lead generation up to 10 hours a day. His pitch to the homeowner was that he had a client who was interested in the home’s location and to ask for permission to show it.

Then, he would buy a pizza, find a development site and ask the project manager for an intro to the developer (after handing over the pizza). “There was never a time that they said no, because developers, guess what? Are greedy,” he said. “They want to know if you either have a buyer for the property or, in this case, I’d be offering them a deal.”

Harris would then describe the development opportunity that he had door-knocked and offer to take them to see it. At that point, the developer would take over underwriting and due diligence if they decided to move forward with the property.

Now, however, new tech tools like UnderBuilt, which Harris has been incubating for the past two years in his own business, allow you to come to the developer with the opportunity and the specifications already dialed in.

The developer difference

While most agents operate in the realm of existing structures, developers are looking for the maximum allowable outcome. Being able to speak their language — buildable envelope, setbacks, height limits, slope and more — takes you from a random local agent to a valued partner.

Harris uses UnderBuilt to analyze city websites, code manuals and assessor maps, digging up the most relevant zoning data and providing insight on a given property. That allows you to go after underutilized lots and teardowns and come to a developer with a vision for the property, along with the relevant data to allow them to maximize the scope of their project.

Harris said that the difference between his early career and his current one is that, before, he was just bringing the developers a location. Now, however, he can create “the whole story for the developer on the spot.”

When you walk in with constraints, upside and a plausible build scenario, you cut weeks of friction and make yourself a valuable resource — and the first person that developer calls on their next project.

Highlighting development upside with traditional consumers: A case study

To show the power of this data with sell-side clients, Harris shared the recent experience of an agent who used UnderBuilt at a listing consultation.

“It was a small property; the family had lived there for over 30 years,” he said. “It was a 25,000 square foot lot. Only a 2,000 square foot property on that lot.”

The homeowners thought the home was worth $2 million based on price per square foot for comparable properties. Using the UnderBuilt report, the agent showed the seller that their property could support a 10,000-square-foot house, so the land itself held double the pricing potential indicated by the comps on the home alone.

The agent won the listing, not because of a flashy listing presentation, but because of a mastery of the data that created value for the consumer and opportunity for a developer. While most listing agents focus on comps, a development perspective allows visionary agents to focus on potential.

How to be a ‘developer-friendly’ agent

1. Offer insight, not just access: Developers don’t need a door-opener. They need a source for promising properties and communication about constraints.
2. Be consistent: Working with developers isn’t about winning the commission lottery. It’s about ongoing deal creation.
3. Become irreplaceable: This is less about charisma and more about being the person with the right information, time and time again.
4. Be efficient: Use tech like UnderBuilt to remove busywork, so you can spend more time communicating and relationship-building. “I don’t believe AI can ever replace that,” Harris said.
5. Develop a collaboration workflow: Identify lots with upside, bring a clean summary to the developer, present it like a partner and keep the relationship warm with meaningful follow-through.

Consumers are getting more savvy, and developers have always been focused on upside potential. Now, it’s time for agents to catch up.

Stop worrying about getting better at social media or content marketing. Get better at information sourcing, and create a whole new niche for yourself and a whole new value proposition.