Best Practices from Fulton Homes and Other Top Builders from the BDX-Led Panel Discussion at The International Builders’ Show

A recent Panel Discussion at The NAHB International Builders’ Show moderated by Jay McKenzie of Builders Digital Experience (BDX) provided builders with proven best practices to successfully sell new homes versus foreclosures.

Dennis Webb, VP Operations for Fulton Homes in Phoenix, shared with builders how his firm is selling hundreds of new homes annually — in a market where 46% of homes sold last year were foreclosures.

“Our main strategy to sell against foreclosures is to provide features and amenities in our homes and new home communities that foreclosures can’t–and don’t–offer,” Webb said.

“First, we build highly amenitized homes with many premium products and offerings included in our base price. Second, we’ve built to the latest EnergyStar standard—which took effect January 1, 2012—since October 1, 2010, which dramatically lowers energy costs.  Third, in our largest community, we leverage our $100 million investment in infrastructure. We’re building new homes a mile away from the most successful employer in the state, Intel.”

The Fulton Homes website also provides an innovative Foreclosure Calculator consumers and real estate professionals can use to see the true cost to buy and repair a foreclosed home. It provides typical costs to repair or replace expensive items often damaged or missing in foreclosed homes.

Once a home shopper calculates the total cost to buy and repair a foreclosed home, a link in the Foreclosure Calculator shows how much home they can get at the same price- in a brand-new Fulton home plan that they select and personalize, with many upgrades included standard, in a brand-new home that’s under warranty, and that’s built to the latest energy standard.

Fulton Homes’ Foreclosure Calculator was a big reason why real estate expert Kenneth Harney chose to cover this BDX Panel Discussion at IBS in his nationally-syndicated column in The Washington Post, The Los Angeles Times and many other leading newspapers.  To read Kenneth Harney’s column – and to see Fulton Homes Foreclosure Calculator – click here: http://wapo.st/yxBpZP

Other strategies that Fulton Homes is using to sell new homes versus foreclosures include:

  • Build larger homes (from 3,000 to 5,000 square feet) based on the latest energy standards for sizable savings on utilities
  • Build only single-story homes. No stairs to climb is a big benefit for many buyers
  • 4 car garages standard in all homes, 6 car garages available
  • Offer a huge selection of options for buyers to personalize their home. All 5 top executives of Fulton Homes came from retail prior to their years as home builders
  • Fulton uses the Envision Option Selection/Management System from BDX and a state of the art, 13,000 square foot Design Center to make it easy for homebuyers to select –and upgrade—appliances, countertops, flooring, cabinets and more

Prefacing these valuable strategies from Fulton Homes, Charlie Engle of RealtyTrac provided builders with the latest data on foreclosures.

RealtyTrac data covers the key stages in the pre-foreclosure and foreclosure process. Engle provided builders with just-calculated data for 2011 not published before. RealtyTrac’s data covers 92% of American counties and is relied upon by media, governmental agencies and academia.

Since 2007, more than 8.2 million homes have started the foreclosure process and more than 4 million homes have become bank-owned homes. At present absorption rates, RealtyTrac estimates that there is a 16-month supply of bank-owned homes and a 49-month supply of delinquent homes.

While the statistics on foreclosures are sobering, as BDX’s Jay McKenzie pointed out in his segment of the Panel Discussion, The NAHB Wells Fargo Housing Market Index (HMI) has shown five consecutive monthly gains in new home sales and model home traffic. Jobs are returning (although more slowly than desired) and many other builders are successfully competing with foreclosures.

Foreclosed homes are sold “as is,” often with no inspection.  Many foreclosures require major, often hidden repair costs. Financing a foreclosure can be more difficult than a new home. Some foreclosure buyers may also need to pay additional cash at close to catch up on past due taxes, HOA fees.

In sharp contrast, builders BDX spoke to are successfully citing many compelling benefits for buying a new home versus a foreclosure:

  • New homes and the products they contain are brand new and under warranty
  • Many new homes are far more energy-efficient than homes built just 5 years ago
  • New homes reflect the way we live today
    • Open floorplans, higher ceilings, multiple living spaces
    • Larger master bathrooms and closets, media rooms, extensive storage
    • New homes allow you to select the choices you want vs. inheriting someone else’s choices
      • Pick the floorplan, elevation and bonus rooms and spaces you want
      • Personalize your new home with appliances, cabinets, countertops and flooring
      • New home options can be financed at unprecedented low and tax-deductible interest rates
      • Advanced technologies insure year-round comfort and high indoor air quality
      • A new home means many years of enjoyment, with much lower chances of costly repairs

Given the many advantages of new homes, it’s clear that builders can successfully compete with foreclosures. To access the slides from this Panel Discussion, click here:  http://blog.thebdx.com/?p=551

 

When builders list their new homes and communities on BDX, they showcase their homes on the two largest new home websites — www.NewHomeSource.com and Move New Homes. As vital as these two leading portals are to marketing success, builders who use The BDX Listing Bundle also have their new homes and communities distributed to hundreds of other leading websites.

Why do over 300 leading websites display BDX new home listings?

BDX provides the world’s largest, richest and most complete feed of new home information to websites that want to offer a comprehensive New Home Channel as part of the real estate section of their website. The unequalled breadth and depth of BDX new home listings make NewHomeSource and Move New Homes the ideal partner for real estate, newspaper and other websites that seek a complete, turn-key source for new home listings to share with their site visitors.

So what does this mean for you, the builder?

It means that when you list your homes with BDX, you’re reaching over 40 million unique users each month. Trulia, Yahoo! Real Estate, Zillow and 140+ major newspapers are just a few of the over 300 websites that display BDX listings.

BDX Partner Websites Fall into Three Categories – Exclusive, Preferred and SmartFeed.™ Here’s How These Categories Compare:

Exclusive: More than 30 BDX Partner Sites receive new home listings exclusively from BDX. (Agents who sell both resale and new homes can also send listings to some of these partner sites, but no other aggregator of new home listings can.) Builders who want to ensure that all of their new homes and communities are displayed on our Exclusive Partner sites–which include Yahoo! Real Estate, AOL Real Estate, MSN, Move.com, Movoto and many other sites–do so via the BDX Listing Bundle.

Preferred: BDX invests in Preferred Listings on 15 sites including Trulia, CNNMoney, Oodle, Facebook, USA TODAY and more. BDX Listings rise to the top of search results on these sites. For example, BDX invests in Featured Listings on Trulia (and 14 other sites) at no additional cost to builders.  Your listing will display toward the top of search results, just by listing with BDX.

SmartFeed™: Every day, BDX sends a highly customized feed to many of our largest partner sites. First, we deeply analyze that partner site’s UI and navigation, to best display new home content within the overall structure of that site. Second, we lobby each partner site for greater prominence for new home listings and new home navigation in that site’s real estate section. Third, we extensively customize our feed to provide optimal display for your new home listings on these sites, thus maximizing your ROI.  Consumers will know it is your home, in your community.

 

The BDX List Once, Be Everywhere™ Listing Bundle Also Reaches More Than 1.1 Million Top Real Estate Agents Nationally.

Since the vast majority of home sales are assisted by a real estate agent, it’s also vital to provide these agents with the key information and encouragement they need to best share and promote new homes and communities with the homebuyers they assist—many of whom might otherwise buy a resale home.

As an integral part of The BDX Bundle, builders communicate vital information to top real estate professionals that includes: Spec and Quick Move-In Homes; Special Promotions/Incentives for Agents and the Buyers They Assist; Plans, Upgrades and Options; Community Amenities; Special Agent-Only Events, and much more.

With BDX, You’ve Got The Internet Covered.

Simply put, no one takes more care than BDX in distributing your vital new home info to millions of consumers and real estate agents.

  • Start with the two largest new home portals in the world.
  • Add more than 300 Partner websites that deliver more than 40 million unique users each month.
  • Maximize builder results and ROI via highly customized SmartFeeds™.
  • Provide 1.1 million top real estate agents with the vital info they need to best sell new homes.

That’s what the BDX Listing Bundle means to builders.

By Jay McKenzie, VP/General Manager, BDX

To identify the latest trends in cutting-edge custom homes–and the wish-lists of custom home buyers—the editors of Custom Builder Magazine survey their builder readers annually.

Their latest survey offers a fascinating look at the features and amenities that custom home buyers are asking for today in their new homes.

The most commonly-sought features of custom homes include: his and hers home offices, outdoor kitchens, and stand-alone guest casitas. More rarified amenities include: personal art galleries, auto showrooms, trophy rooms — and, especially in Texas, that oh-so-necessary saddle room!

At the same time, custom builders report their clients want smaller, but still luxurious homes. Energy efficiency and green building are also very much on the minds of custom home buyers. The “Not So Big House” movement–sparked by a series of New York Times best-selling books from noted architect and author Sarah Susanka–has clearly taken root in the minds of custom home buyers and builders alike.

According to Custom Builder Magazine’s December 2010 Survey, here’s what’s on the mind of custom home buyers and builders:

CUSTOM HOMES ARE GETTING SMALLER

  • Custom builders report the typical home they’re building is 3,000 to 3,500 square feet.
  • If there was any doubt the era of McMansions (homes with exorbitant square footage and corresponding utility bills) is kaput, this study should confirm the trend is toward smaller, but still highly-amenitized homes
  • Nearly 35% of custom builders are building somewhat smaller homes (up to 9% smaller in square footage) compared to three years ago
  • Nearly 15% of builders are building significantly smaller homes (more than 10% smaller) than in the past

HOWEVER, CUSTOM HOMES REMAIN LUXURIOUS and HIGHLY-PERSONALIZED:

TOP 12 FEATURES & AMENITIES CUSTOM BUILDERS SAY HOME BUYERS ARE ASKING FOR:

  1. Master Suite Retreat                                    67.3%
  2. His/Hers Home Offices                             47.1%
  3. Home Theatre                                               38.3%
  4. Outdoor Kitchen                                          35.9%
  5. In-Law Suite                                                 26.6%
  6. Craft/Hobby Room                                     21.3%
  7. Bar/Pub Space                                              15.5%
  8. Guest Casita                                                  10.8%
  9. Art Gallery                                                      2.3%
  10. Automobile Showroom                               2.0%
  11. Trophy Room                                                 1.5%
  12. Saddle Room                                                  1.0%

THE CHANGING FACE OF THE CUSTOM HOME BUYER: MOVING UP AND DOWN

Many members of the huge “age wave” of Baby Boom homebuyers are in their peak earning years, driving the largest segment of custom home demand from move-up buyers seeking larger, more opulent homes.

At the same time, older Boomers are starting to arrive on the threshold of retirement. Many of them are opting for smaller, move-down custom homes.

Whether moving up or down in size, both the younger and older age segments within the vast, overall  Baby Boom generation are key drivers in the custom home market. Their needs and desires are reflected in the varied types of homes that custom home builders are creating:

  • 79.5% of buyers are building their dream move-up home
  • 31.3% want a retirement home
  • 25.7% desire a vacation or weekend retreat
  • 23.1% are move-down buyers, who seek a smaller, easier to care for home

“HAVING IT ALL” IN YOUR CUSTOM HOME INCREASINGLY MEANS PLANNING TO AGE IN PLACE AND ACCOMODATE ELDERLY RELATIVES AND “BOOMERANG” KIDS

  • Custom builders report that a large and growing segment of their clients are buyers seeking a new home where they can age in place…while also providing living space for elderly relatives and/or boomerang kids
  • The increasing preference for guest casitas and in-law suites reflects this growing trend toward multiple-generation households sharing a single home
  • Burnette Builders of Austin, Texas has built three homes in the last 18 months with elevators. As Grady Burnette told Custom Builder Magazine, “The clients don’t need the elevator now, but they see it as something they’re going to need later, for themselves or some member of their family.”

HOW BIG IS THE IMPACT OF THE AGING BOOMER GENERATION ON THE CUSTOM HOME (AND OVERALL HOME) MARKET?

As the Stanford Center on Longevity notes, the number of Americans 65 years or older will double in the next 30 years. However, the youngest members of this age group will take with them their fierce individuality (this is the generation that invented rock and roll) and an inherently much “younger” attitude toward life, themselves, and their housing needs than any prior 65+ age group.

This trend will affect every aspect of American life and housing. The chart below from the Stanford Center captures what this age wave will look like: 

AMENITIES AND FEATURES VARY WIDELY DEPENDING UPON AGE, INCOME, LIFESTYLE AND NEEDS

Despite the pronounced age wave above, it’s important to note that the single largest group of custom home buyers is still comprised of consumers in their peak income-earning years, age 45-55.

These younger affluent buyers drive the move-up home market. Many are seeking the latest amenities, state of the art home theatres, elaborate outdoor kitchens, highly personalized spaces and more.

Conversely, buyers age 55-65 make up nearly a quarter of the custom home market. Many of these buyers prefer smaller, but still highly personalized and upscale homes.

Powering the wish lists of custom home buyers are demographics that include enviable household incomes and an eagerness to invest in quality homes, crafted for their needs. Builders surveyed by Custom Builder Magazine reported that:

  • 37% of their custom home buyers have a household income of $250,000 or more
  • Nearly 31% plan to spend $250,000 to $500,000 for their home
  • Nearly 25% are budgeting $500,000 to $750,000 for their new home
  • More than 19% plan to spend $1 million or more on their custom home.

ENERGY EFFICIENT AND GREEN FEATURES ARE IMPORTANT TO NEARLY 80% OF BUYERS—AND THE TYPES & MOTIVATIONS OF GREEN HOME BUYERS ARE SURPRISINGLY VARIED AND DIVERSE

Across all of these custom home price points, both move-up and move-down buyers share a common trait: a deep and growing interest in energy-efficiency and green building.

In presentations to leading Home Building Associations (HBA’s) across the country, our CEO Tim Costello describes the many faces of green building. There are many types of green buyers with surprisingly diverse motivations for “going green” in new homes.

Green buyer types include Concerned Mothers, Patriots, Conservationists, Penny Pinchers, Self Global Citizens and more. Motivations of green buyers include saving money on energy bills, building a healthier home for themselves and their family, and reducing their impact on the environment.

Regardless of the buyer type and motivation, green building and energy efficiency are clearly climbing the list of “must-have” features that more custom home buyers are incorporating into their new homes.

Not surprisingly, green and energy-efficiency are also top of mind with the best custom home builders. These building professionals are fanning the flames of buyer interest to lead the market towards better and more sustainable housing, via new homes that provide superior indoor air quality, energy and cost savings, and designs that reflect the way we live today.

Custom Builder Magazine’s Survey documents this trend: Nearly 80% of custom builders surveyed stated that energy efficient and green features are important to their clients.

CUSTOM HOME BUYERS: A SURPRISINGLY DIVERSE GROUP

  • Move-up buyers seeking the homes of their dreams
  • Move-down buyers seeking quality and stylish homes
  • Vacation and weekend homes
  • Retirement homes
  • Personalized spaces for individual lifestyles
  • Multiple generations under a single roof
  • Home theatres, outdoor kitchens, his and hers home offices
  • The many types of green buyers

Based on the trends and survey results above, one thing is clear: Today’s custom homes are limited only by the imagination and desires of homebuyers and the talents and vision of custom home builders.

To search the finest custom homes and builders in the nation, please visit www.CustomNewHomes.com.

To learn more about Builders Digital Experience (BDX) and our family of websites for consumers to select a new home, please visit www.TheBDX.com.