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Risk Management Solutions – From Your Home Plan Designer?

Risk Management Solutions – From Your Home Plan Designer?

Yes! Just as you take out an insurance policy on the homes you build to minimize risk, here’s how working with Design Basics, LLC, for your home plan needs can help minimize your risks and uncertainty.

It is expensive and time consuming coming up with new home plans. Recruiting and retaining top-notch design staff is difficult, as is keeping up with seasonal demand for design services. Design Basics helps you minimize these costs and risks by providing great home design services, quickly, at a competitive price.

$1,000 or more is a lot of money for a house plan when I do not know if the home will come in at the cost I need. Design Basics offers Study Sets – the complete set of home plans for estimating purposes (not for construction) at a discounted price, and the price paid for Study Sets is applied to the cost of licensing the plan for construction. And, with our Builder-Centric℠ Preferred Builder Program, you can get up to five (5) different plans per year as Study Sets for just $100* each!

Low Price Guarantee RibbonI can probably get the plans cheaper elsewhere. Our LOW PRICE GUARANTEE means that if you find a better price elsewhere, we will match it. And working directly with Design Basics means the quickest response and most accurate answers to any questions you might have.

What if, for some reason, I cannot use the home plans I purchased from Design Basics? When you purchase home plans directly from Design Basics, you may exchange the home plan* you licensed to build for a different home plan* one time at no charge (other than any incremental increase in plan price of the second plan) at any time within six months of the original home plan purchase.

Any delay in receiving home plans means risking losing a potential client. You can receive most plans ordered the same business day via email, though certain upgrades such as an alternate foundation plan may take up to three (3) business days.

How do I know that I am getting a quality home plan? Design Basics has focused on serving home building professionals and designing homes since 1983. Hundreds of thousands of homes have been built from the plans we offer. And several of America’s “hottest” design trends were introduced by Design Basics! In addition, we are members of the American Institute of Building Designers and the National Association of Home Builders – further assurance of our expertise, professionalism, and commitment to the industry.

I found a home plan that might work…with changes. Your choice – our licensing allows you to modify the plan locally, or Design Basics can customize the plan for you. We have a proven customization process that is designed to please, and we provide no-cost estimates of both the fees and timeframe to complete the customization.

You have a nice design, but I need engineer-stamped (or architect-sealed) home plans in my area. Design Basics’ Dimensional Home Plans are the answer! Sent to you on CAD, these plans are drafted and dimensioned, but without the accompanying notes and structural information – ready for you, your engineer, or architect to finish per your specific needs.

Deciding what new plans to bring into our home portfolio is risky. Design Basics’ Concierge Service is designed to help you minimize such risks. We know what is selling in terms of home design. Based on your goals (e.g., affordability); restrictions (e.g., 40-foot maximum building widths); and target market (multi-generational households); we can specifically recommend designs that improve your odds of success. Upon request, we can even review your existing design portfolio to identify gaps and opportunities we feel could be better addressed through design to help you sell more homes.

The home plans I am using are fine. The cost of relying on the same old home designs may be more than you realize. Today’s new value-engineered plans may be less expensive to build while offering more of the amenities today’s buyers desire. Lost profits from missed sales and fewer resulting referrals can be very expensive.

What if I have questions or do not understand something regarding the home plans I purchased? Design Basics offers free technical support for all of our home plans. Just call with your questions and we will work through issues with you.

Sample Customized Promotional Handout

I want to see if a design gets traction in my market without paying $1,000 or more for the plan up front. Receive the rendered front elevation and black and white floor plan artwork in .jpg format, along with a Promotional License allowing you to use the artwork in your advertising and promotional efforts for just $25 for any of the home plans we offer. Importantly, the rendered presentation artwork is accurate to how the home was originally designed. Photographs can be beautiful and help bring the home to life, but may incorporate a degree of customization, potentially confusing buyers to expect their home will match the photo. Better yet, upgrade to a Customized Promotional Handout (sample shown at left) complete with your logo and contact information!

Reducing risk is Smart Business. Just as there are risks associated with introducing new home plans (time, expense, market reaction), there are parallel risks from doing nothing (higher construction costs, lost sales due to “dated” designs). Tap into our nationwide experience, creative problem solving, and design leadership while minimizing your risk. Contact Design Basics today!

*Applies to these designers only: Design Basics, Carmichael & Dame Designs, Plan Pros, Inc., and Scholz Design.

At Design Basics, we have the tools to help you stand out from other builders:

Contact us today to learn more: 800.947.7526

Surviving a Downturn

Surviving a Downturn

How Veteran Home Builders Survived the Great Recession

They've seen it all, 18% mortgage interest rates in the early 80s; a bottoming out of the market in 1993; the record prolonged upturn that lasted until 2007; the Great Recession of 2008-2013; and, the current "strong demand meets sticker shock" until the COVID-19 pandemic threw everything into confusion for the housing market. How did these veteran builders survive? We asked builders what advice they would give newer contractors who want to make home building their lifetime career:

Bill Kimberley
Kimberley Development, Des Moines, IA

Woman-Centric Matters! Certified LogoThe housing recession was really challenging. Kimberley owned a lot of ground that was purchased by putting 30% down with the balance financed through bank loans. When land values sank, those land loans became non-conforming and banks were being pressured for all real estate loans to be conforming. The banks could have foreclosed on those loans, but Kimberley was never leveraged to the max. Over the years he had built and managed some commercial property with a steady income, had stellar credit, and had never been late on a payment. Kimberley was straightforward with his banks and even had to negotiate a little more aggressively, eventually working everything out.

Mark Kiester
Unique Homes, Des Moines, IA

Kiester’s schooling centered around being a commercial artist, and he has the ability to “see” the finished product in his mind – a definite asset in home building. He spent 16 years in car dealerships prior to getting into home building (10 of those years as general manager of a dealership). That experience managing others really helped him in managing his team at Unique Homes, including his sub-contractors and vendors. One of the reasons for his company’s success – and survival – was participating in 13 of their local Parade of Homes events. The public exposure to his homes always led to additional sales.

Kiester's advice to young builders:

  • Do not leverage yourself too deep.
  • Find another builder willing to mentor you.
  • Remember, you are only as good as the people who work for you!

​Tyrone Leslie
Heritage Homes, Fargo, ND

Woman-Centric Matters! Certified Logo"We were steadfast. We didn’t pull back on our marketing or our standards. In fact, we opened three new model homes and staffed them 6 days a week. You can’t let fear lead you. We got everybody on board, focused on our values, and kept all of our staff."

Chris Jones
C.A. Jones, Inc., Columbia, IL

Jones had always worked with local banks; he knew the bankers and they knew him. They shopped the same stores and ate at the same restaurants. His bankers believed the housing recession wouldn’t last forever. The banks held the collateral, and whatever the collateral produced, they got, which was better for the bank than foreclosing on the lots at a loss. Some of the loans Jones would have to re-write every 3-6 months as opposed to 5-year loans. His personal reputation and dedication to the company’s financial obligations carried them through and they are reaping the benefit today. Still, he would lie in bed at night with thoughts of bankruptcy.

Jones sold off heavy equipment including excavators, bulldozers, and tractors. He borrowed from his personal 401K and had to pay a penalty for early withdrawal when he defaulted on that loan to himself. He had to let many very good employees go and went back to being one of his own construction staff. Jones even did his own marketing by personally hanging flyers in storefronts and on bulletin boards throughout his market. And, Jones placed a large sandwich-board sign in the back of his pickup truck advertising his two developments as he drove around.

Robert Foushee
Robert Foushee Homes, Inc., Independence, MO

Builder-Centric LogoFoushee’s bank was taking in homes being abandoned by other builders in the market and hired him to finish them up so the bank could put them up for sale. The bank also had repossessed some completed homes that needed work and hired Foushee to do the needed repairs. That business, along with 2 to 3 custom homes each year, got him through the downturn. At the onset of the downturn, Foushee was already nervous and early on sold his spec homes and the lots he owned, even taking losses, to get them off his books. Four years later, as the market began to recover, he was able to buy back some of those same lots he had sold, at a significant discount. About that same time, he purchased a 31-lot subdivision for about 25 cents on the dollar, on which he built affordable homes that sold quickly at a reasonable profit.

Frank Morin
Accent Homes, Inc., Gary, IN

"Keep debt low, even in the good times. Maintain a healthy balance sheet. Always be alert to changing conditions. And, don’t wait to cut expenses if the market weakens. Similarly, don’t be too cautious, or the recovery will leave you behind."

Morin brought sales in-house and at the same time, worked harder at reaching out to and personally cultivating relationships with real estate agents who were well-versed at selling new construction. Accent Homes also became more flexible with plan customization, which provided better customer service and led to more sales.

Alex de Parry
Ann Arbor Builders, Inc., Ann Arbor, MI

Michigan was severely hit by the housing recession. De Parry had to make some hard decisions. He sold off some assets, including a SkyTrak crane. His framers formed their own company, and he still uses that company today. De Parry had a subdivision loan that he had to re-negotiate. Fortunately, many of his clients (University of Michigan, doctors, and other professionals) were not as impacted by the economic downturn, and in fact, reasoned that they could (and did!) get a better deal building a custom home at that time. His company also rehabs older commercial buildings; combined with the custom homes, they made it through.

Thank you to these builders for sharing their stories and offering their advice!
Find more Builder Advice by Clicking Here.

Many seasoned builders advise not cutting your marketing during a downturn - how are customers going to know who you are and where to find you? At Design Basics, we have the tools to help you stand out from other builders:

Contact us today to learn more: 800.947.7526

Cover Image: <a href="https://www.freepik.com/free-photos-vectors/background">Background photo created by mindandi - www.freepik.com</a>
Worth a Second Look?

Worth a Second Look?

A report by the real estate website Zillow found 17% of prospective home buyers are willing to pay the 20% premium for a brand-new home compared to a resale property. But willing and able are different sides of the coin. The median (half lower, half higher) sales price of new houses sold in February 2018 was $326,800 (U.S. Census Bureau), requiring an $85,000+ annual household income to qualify for such a home’s 30-year mortgage with 10% down at a 4.5% interest rate.

Rising land and construction costs have forced many builders to shy away from the lower end of the market. After all, certain fixed costs such as regulatory and permits vary little, if at all, based on a home’s size, constituting a much higher percentage of a less expensive home’s selling price. Yet the limited supply of affordable homes (partly due to investors having gobbled up tens of thousands of lower priced homes during the recession for rentals) can mean wonderful opportunities for builders offering attractively-priced new homes.

Design Basics’ Kuebler plan (#31007) is a charming three-bedroom, two-story home focused on both affordability and livability. At just 35-feet wide, this home works on smaller, less expensive homesites.  The streamlined foundation is rectangular (cost-effective), requiring just two steel poles in the basement. Only three different-sized windows are used, simplifying ordering. A half-wall at the top of the stairs is less expensive than railings. A more price-focused exterior could include eliminating the second reverse gable and the covered porch, using single-wide windows with shutters in lieu of the double wide windows, and bringing the master bedroom windows together as opposed to the split windows.

Livability is evident throughout. Coming in from the garage there’s a handy bench and a drop zone helping keep clutter contained and out of the kitchen. The front flex room can be purposed as an eating area or home office, and the kitchen island has dual access. On the upper level, the storage is amazing, the five-foot walk-in shower rewarding, and the second-floor laundry is convenient. Plus, there’s 155 square feet over the garage for a kid’s play room or even more storage!

Take a look at other “affordable” home designs:

Plan #35084 the Dane Mills (featured above): a split entry home with main floor laundry or our signature Pocket Office™

Plan #8656 the Irvington: a 4-bedroom, 2-story home that maximizes square footage under roof

Plan #8530BL the Calverton: a top-selling 3-bedroom ranch less than 1,200 sq. ft.

Why Buy New, Now?

Why Buy New, Now?

The John Burns Real Estate Consulting Group recently reported that for 2016, median new home prices were 35% more than the median price for resale homes – much higher than the 10%-20% new home price premium of the 1990s and 2000s. So, how do you answer the question, “Why should I buy a new home, now?” More importantly, how would your sales representatives answer that question? Would each and every one of their answers be consistent, comprehensive, and position your home(s) in the best possible light?

Obviously, buyers purchase homes for varying reasons based on their own self-interests. But in addition to whatever their top motivations for buying a home, one of the tools your sales team needs is a thoughtfully worded handout of some of the most common and compelling reasons for buying one of your new homes. While you will want to tailor the information to your specific business strengths, the following are all items to highlight.

FINANCIAL CONSIDERATIONS

  • Interest rate risk of waiting: 30-year fixed rate mortgages are forecast to be a full 1% higher by the end of 2018 compared to the end of 2017 (longforecast.com). A $250,000, 30-year mortgage at a 4% interest rate (APR) is $148.51 less per month than at 5% APR.
  • Escalating construction costs: The average new construction home in the first eight months of 2017 sold for $313,250, compared to $302,300 for the first eight months of 2016, a one-year increase of $10,950 (U.S. Census Bureau data and FRED Economic Data, Federal Reserve Bank of St. Louis).
  • Stiffer building and energy codes combined with product advancements mean cheaper utility bills and lower homeowner insurance rates, further reducing your total monthly housing costs.

The financial implications are often the first aspect looked at, but there are lots of other reasons to look at new construction rather than an existing home, including:

  • Quality of construction. More stringent building codes are just one of the reasons today’s homes typically offer superior quality compared to older homes, making your new home more pleasurable to live in.
  • Design flexibility. Some things that just aren’t feasible to change with resale homes, like garage size, ceiling heights, wider doors, or open, entertaining floorplans.
  • Product choices, advancements. When building new, there’s a gamut of products to select from in making your home uniquely yours, based on what’s important to you—such as quieter and safer products...high technology…healthy alternatives...new construction is a hands-down winner!
  • Avoid maintenance hassles and cost. New homes are typically lower maintenance due to the products used. Composite decking, tilt-in clad windows, and laminate flooring, all give you back a little more time. Then there’s the risk of expensive repairs associated with older homes such as replacing worn-out appliances, roof shingles, carpet, and furnaces.
  • Energy efficiency and environmental responsibility. Homes built today are as much as 60% more energy efficient than homes built 20 years ago, contributing to a more comfortable home. Your energy efficient new home can help prevent the release of tons (yes, TONS!) of greenhouse gasses per year, while helping conserve our energy resources. Advanced building products such as engineered wood and recycled product choices such as carpet made from discarded plastic water bottles further help protect our environment.
  • Don’t settle for less. Finally, one of the most important reasons for buying new is getting exactly what you want in your new home.

While you're planning for your new home, take a look at our resources page for information about home building and design. Resources

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