Competing with the Big Dogs

Competing with the Big Dogs

It’s an oft-repeated tune – a national home builder moves into the marketplace, with eyes on becoming the dominant builder, or fast tracks the process by simply acquiring an established local builder. Thoughts of big-box stores moving in and local merchants going out of business ring true. After all, the nationals have the advantages of buying power, huge marketing budgets, lots of working capital, and better access to credit.

But…national builders typically don’t choose to compete on better, only cheaper. They’re playing to their strengths. So, why would you choose to compete using their rules for playing the game? You’re not going to win, consistently, on price.

What if, instead, you could write the rules?

With such a large purchase, price is always important. People use price as a tool for comparison. It helps when trying to make sense of different homes’ different prices. But do you want prospective buyers looking for negatives (reasons why the home is cheaper) or positives (attributes and amenities that help justify the higher price)? And, “cost per square foot?” You probably have your answers for that issue, but a third-party resource will be perceived as less biased. Download the Her Home™ Magazine’s “10 Things You Need to Know Before Comparing Cost Per Square Foot” article here.

Choose Local

Local builders are joining buying co-ops and even joining forces to acquire building lots to be more competitive with national builders. But even nicer is focusing on why your customers get a better value buying their new home from you. Playing to your strengths:

  • You’re local. You know your local market; you may have grown up in your local market; you’ve put down roots there; and, you live there. You have existing relationships with others in your local market. From sponsoring local sports teams to being a co-presenter along with a local lender and Realtor®, you are engaged in the community, and that matters.
  • You’re human. What home buyer would ever meet with the president or owner? Buyers want to work with a builder they can trust, and it’s much easier to trust a person than a corporation.Couple with Blueprint
  • Your reputation. Review sites are full of disgruntled home buyers who bought “lowest price.” Your personal involvement with the buyers, use of quality materials and sub-contractors, and involvement in the community help people want to work with you rather than setting for working with you. Local builders won’t survive without high levels of customer satisfaction, which is the formula for referrals, the most profitable source of new customers.
  • Your focus. You can’t be all things to all buyers. But you can be the best at the niche or target market you choose. High-performance? Eco-friendly? Tech-savvy? Woman-Centric? Differentiation takes the focus off price, and places it on the emotional appeals of the home and how it will feel to enjoy it. Conversely, the less you differentiate, the more price-sensitive you can expect prospective buyers to be.
  • Bragging rights. Don’t limit your focus to mere rational appeals and attributes. Sure, people want lower utility bills, but they’ll love bragging about them – making sure others know they made a great purchase decision. Cutting dependence on maintenance and rescue medicines by building a healthy home speaks to caring, nurturing, making you feel good about your purchase. And, you’ll tell everyone about the difference breathing easier makes! Such attributes help people feel they got a great home and therefore a great deal; and, people are much more likely to brag about a great deal than about getting the cheapest price.
  • New home searches begin online, and digital space levels the playing field. While the big nationals buy billboards, you can win online with quality local content. Each time you post a new blog, you can add a link to it on your social media profiles. Short-staffed? This can be hired out.
  • It’s not just awareness, blogging helps position you as a local expert. Buyers want to make informed decisions, and they’re looking for answers. Developing a few downloadable tip sheets can further help overcome online anonymity, as prospects provide their contact information in exchange for your tips, and you can follow up with knowledge of a specific interest area that prospective buyer has.

Furthermore, national builders’ inherent weaknesses can be advantageous to you. They’re often interested only in larger tracts of land. Local builders may be in a better position to acquire smaller parcels, infill sites, or build on the owner’s land. Due to their structure, national builders can be low to respond, regimented, and bogged down in policies, procedures, and red tape. And, national builders face pressures on profitability, too. The difference is local builders are committed to their market, employing unbridled creativity and flexibility during down cycles. National builders can, and do, exit a market as quickly as they entered it – leaving vendors, sub-contractors, lenders, and yes, even their customers, to fend for themselves.  

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

Contact us today to learn more. 800.947.7526

Multiple Generations – One Fabulous Home!

Multiple Generations – One Fabulous Home!

Design Basics was recently featured in the Omaha World-Herald’s Timeless Living section, showcasing the Strasser Pointe (#42420FB) home plan. This plan was designed for a couple and the wife’s parents; the ability to share a home, yet have separate living quarters. Read about this home design by clicking on the image below.

  

Storage: The Overlooked Amenity in Modest-Size New Homes

Storage: The Overlooked Amenity in Modest-Size New Homes

With construction costs approaching all-time highs and buyers facing more volatile mortgage interest rates, new home affordability was a recurring theme at the 2019 NAHB International Builders’ Show. At Design Basics’ booth, homes 40-44 feet wide were the most popular (reflecting higher lot costs), and value-engineered plans with straightforward, cost-effective foundations in demand.

Just as companies’ advertising is typically the first thing to be trimmed to meet budget, storage is often the first area in a home to be cut when designing smaller homes. Home buyers may not recognize lack of storage during an initial model home visit, but according to Realtor Magazine, not having enough storage space leads to buyer’s remorse for 80 percent of home buyers. Buyer remorse is the surest way to shut down referrals, which should account for at least one-third of your new home sales.

Rather than minimizing, or having to apologize for lack of storage, making storage a priority in design renders your homes more marketable. In fact, it’s easy to sell against other builders’ similar-size homes that skimp on storage!  Design Basics’ new Natalie Park (plan #42416) proves that storage need not be sacrificed in modest-sized homes. Whether walking in the front door, or entering from the garage, there are coat closets to greet you. Speaking of the garage, there’s a 7-foot by 6-foot storage area at the back, ideal for a lawn mower and/or a snow blower. At 24-feet deep, there’s also room for shelves in front of the laundry area.

The rear foyer’s drop zone is the perfect repository to keep clutter out of the kitchen. Kitchen storage (and organization) is a priority in any size home, but particularly important in smaller square footages. There’s abundant cabinetry in the kitchen, a corner pantry, and importantly, with no cook top or sink in the island, there’s welcome storage there, too. Storage atop the washer and dryer testifies to the concern for this laundry room essential.

Rather than becoming “wasted space,” a recessed area behind the door into the owner’s bedroom showcases built-in shelves. The walk-in closet is nice-sized, and there’s a hall linen closet for extra sheets, blankets, and towels. Secondary bedroom closets were made as large as possible, and assuring you never run out of storage space in the Natalie Park, there’s over 300 square feet of storage available over the garage!

They may have stone counter tops and high-tech connectivity, but new homes lacking storage, especially smaller square footage homes, can turn buyers’ dreams into nightmares.

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.

Curb the #1 Energy Loss in Homes

By focusing on energy efficiency, you can reduce greenhouse gas emissions (carbon dioxide, sulfer dioxide, and nitrogen oxides) by thousands of pounds per year. Great strides have been made in insulating walls, window quality, and furnace efficiency. But, according to the U.S. Department of Energy, air duct leakage is the #1 home energy loss.

Aeroseal® manufactures an aerosol sealant that is sprayed into your ductwork to seal leaks from the inside. Safe and nontoxic, Aeroseal has actually been shown to enhance indoor air quality. Improved delivery of conditioned air means rooms that were hard to keep warm in the winter/cool in the summer are usually more comfortable while saving you money every month on your utility bills.

According to Aeroseal, “On average, 30 cents of every $1 you spend on heating and cooling your home or building disappears into thin air due to duct leaks.” With more of the air you paid to heat or cool reaching the registers, you may find yourself actually lowering the thermostat.

Another benefit can be noise reduction—with the furnace and/or air conditioner running less.

Learn more about Aeroseal products.

 

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