THE 82% HOUSES -or- THE FIGHT TO CREATE THE PERFECT HOME

Over the past many years I have had the pleasure of working with some of the truly great residential architects from around the country, many of whom would be considered the legends of the industry. And these exceptionally talented men and women provided my clients and myself with some amazing single family homes, townhomes, condominiums and rental apartments. I am proud to have worked with these designers and to have participated in the process that created housing units that are as livable today as they were when they were designed up to 40 years ago.

In the past, it was typically understood and agreed that the “client”, the builder or the builder’s marketing director, would have done the market and competitive research and combined that with the builder’s capabilities and vision to create the strategy on which the new home designs would be based. The architect would then take that strategy and utilizing experience and talent, plus ongoing input and critique from the client, translate that into livable, exciting, salable home designs.

Most recently, I have been working with a client on a single family community and the client selected an architect with whom he and I have worked before with more than acceptable results. This time, however, it seems that the architect is willing to be satisfied with what I consider to be “82% houses”.

Specifically:
– the elevations are 82% of what they should be (the rooflines are neither impressive nor cost-optimized, the home entries create no exciting sense of arrival, the total feel is rather bland and unbalanced, etc.);
– the room sizes and orientation are 82% of great (some rooms are needlessly oversized, others are too small, there are three distinct dining areas directly adjoining each other, etc.);
– the features are 82% of what we want (the master bath lacks excitement, the kitchens are dated, dull designs with imperfect work areas, secondary bedrooms have undersized closets and lack direct access to bathrooms, etc.);
– the basic designs are 82% of fully usable (the homes lack the ability for optional variations within the basic structure – den into bedroom, game room into master study, bedroom into second master suite, etc.).

Now it may not appear that a new home that is only 82% of optimal would be a problem to sell for 82% was a solid “B” when I was in school but the elements are each, individually, 82% so that the total home is actually only 45% of optimal (.82 x .82 x .82 x .82) and that, by any scoring method, is a “D”. How many of my readers would wish to have to sell a home when the design is universally considered to have received a failing grade? Continue reading

BACK TO THE BASICS: ONE OF THE MOST IMPORTANT TRAITS OF A SUCCESSFUL NEW HOME SALESPERSON IS GREAT COMMUNICATION SKILLS.

communicateI am often asked what I look for in a new home salesperson and my answer is two specific qualities – first empathy, the ability to put yourself in the position of the customer and care about that individual and, second, great communication skills. I do not believe that you can teach or train someone to be empathetic – they either care or they do not.  So I would hope that whoever is doing the hiring of new home salespeople is screening for empathy.   

Proper communication skill is equally essential and can be learned.  It is apparently no longer taught in our school system, at home or elsewhere in society so it is the responsibility of whoever performs the sales management function in any homebuilding company to search for that quality in all new hires and, when necessary, become teachers and coaches to make certain that their salespeople, their sole representatives to their prospective customers, learn and practice the necessary forms of proper communication.  If our sales representatives cannot communicate effectively they cannot and will not make the sale!

After working around the house last week my wife and I took a break for dinner and, as we were dressed casually, ended up at the local Outback Steakhouse.  The food was decent, nothing special, but the evening will be forever etched in my memory because of our server.  He was young, mid 20’s, and very personable and enthusiastic, selling very hard to have us upgrade our entrees by adding a crab cake or lobster tail and later to have dessert and coffee. And as I am always appreciative of any decent attempt at a sale, and his presentation was pretty good, he was well on the road to earning an extra generous gratuity. 

When he returned with the bill having run my credit card his parting comment was “Thank you very much Dan, have a wonderful evening”.  Now “Mike F.” (name taken from my receipt) may be an excellent server, a wonderful person, a heck of a nice guy, perhaps even a true renaissance man.  But simply by serving our dinner once he had not become a personal friend, nor had he earned the right to call me by my first name, especially the familiar nickname (which he had taken the liberty of shortening from the “Daniel” that he apparently gleaned off my credit card receipt).  And as I am at least 30+ years his senior, I found the familiarity inappropriate, and it was reflected in his gratuity (which still was decent but no longer “extra generous”.)  A simple misstatement resulted in a net overall negative impact.  Mike lost a couple of dollars and we will still eat at Outback when we are in a hurry and not dressed for a more upscale venue.

communicationAt dinner a few nights later I overheard the server at the next table introduce himself and then add “I am going to be working with you this evening.”   My first thought was that if this had been said to me my immediate response would have been “Please start with cleaning our hurricane shutters as they are very dirty”.  Thereafter, as this poorly chosen “canned” introduction had set the tone of future interaction, it would have been difficult to take seriously anything this person later said, even a legitimate “thank you”.

In both cases these errors in proper communication can be attributed to lack of or improper training and/or lack of or improper sales management and supervision – perhaps tolerable in restaurants but, when trying selling a new home, the same does not hold true as any improper or incorrect communication can result in losing the sale, costing hundreds of thousands of dollars for the builder and thousands of dollars for the salesperson. Communication is the process of transferring information between a sender and a receiver through various methods which can include the more obvious – spoken words or written words and, just as important, nonverbal signals which include:

  • Facial Expressions
  • Attire
  • Eye Contact
  • Gestures
  • Touch
  • Body language
  • Posture

Continue reading

DR. DAN’S 12 STEP PROGRAM for SUCCESS in HOMEBUILDING and RESIDENTIAL DEVELOPMENT ©2015

Twelve Step programs are well known for their use in treating addictive and dysfunctional behaviors. The first 12 step program began with Alcoholics Anonymous (A.A.) in the 1930s and has since grown to be the most widely used approach of other programs in dealing not only with recovery from alcoholism, but also from drug abuse and various other addictive and dysfunctional behaviors.

12 steps #2I apologize in advance to any of my readers who may personally been or have family or friends in or in need of a 12-Step Program but I believe that the basics of these programs not only provide hope and a foundation for personal self-improvement but also for the structure of success in any business and, specifically, the homebuilding industry.  And please forgive me for this statement but I believe that much of what I see across the country in homebuilding and residential development is often dysfunctional.

So with what I hope will be a little latitude and tolerance on your part, here is “Dr. Dan’s 12-Step program for success in Homebuilding and Residential Development”:    

Step 1. – Admit Powerlessness – we must admit that we are powerless over the market as it is established and managed by forces beyond our control and acts solely of its own volition.  We, as builders and developers, cannot create a market nor the demand for housing, only work to satisfy the needs and desires of the market as it may exist from time to time while recognizing that demand is subject to continual evolution.   And while we may be powerless over the causal factors of the market, we are not powerless over the actions necessary to satisfy the market  

Step 2. – Find Hope – we must believe that a power greater then ourselves can be of assistance and that power is knowledge – knowledge of the market and all of its components.  Only by studying the housing market and all of the underlying factors thereof can we hope to understand the true demand, the competitive factors that exist and the real and viable opportunities that are presented for success.

Step 3. – Never Surrender – we must make a decision to accept reality and take action, not just give up and fall by the wayside.  That action is to create a strategy for success based upon thorough research and analysis of the demographics and psychographics of the market, the economic conditions and factors, the competitive marketplace including both new and resale housing, and area and site specifics.    Continue reading