The Wells Fargo/NAHB Builder Confidence survey, for February, reported a historic drop in Builder Confidence.
Your Questions Answered: Value-Engineered Housing for Today's Buyer Market webcast
In Professional Builder’s latest webcast, “Valued-Engineered Housing for Today’s Buyer Market,” three home building industry experts discuss ways builders can value-engineer their businesses to maximize profit, beat the competition and improve their products.
In Professional Builder’s latest webcast, “Valued-Engineered Housing for Today’s Buyer Market,” three home building industry experts discuss ways builders can value-engineer their businesses to maximize profit, beat the competition and improve their products. The expert panel included Lolita Dirks, CEO of Lita Dirks & Co.; Victor Mirontschuk, AIA, Chairman/Principal of EDI Architecture; and Elise Platt, President of E.A.Platt & Co.
We asked the panelists to review the questions submitted by the webcast viewers. Here are their responses:
What’s the single biggest miscue or mistake you see builders make when applying VE tactics?
Elise Platt: The single biggest mistake builders make when they value engineer is viewing the process as a “paring down or cutting” of architectural features. It is important to view VE as a positive process that improves your product and presentation. Also, VE is a long-term solution, not a knee-jerk reaction to a bad market. It needs to be an integral part of the builder process from the earliest planning stages. It’s all about taking the time to do what is best for you neighborhood and your buyer from the outset — that is true value engineering.
What’s the single biggest missed opportunity for builders when it comes to VE?
Elise Platt: The biggest missed opportunity I see is to use VE as a positive evolutionary process for their overall development approach. As we mentioned in the webinar, the attitude needs to be “What can we do to make this neighborhood/house a better value?” … perceived by the buyer as more home for their money.
If a builder wanted to eliminate a room from his/her plan to save space, which would you recommend?
Lita Dirks: The living room. Today’s world is more casual and less formal. People want to “use” their rooms – all of their rooms. People are looking for an efficient use of space, convenient to their personal needs. If this room is opened to the rest of the house it can become valuable “flex” space. If it is eliminated, a great room can become the central gathering place for the family to eat, dine, work and socialize. The great room is then defined into zones for use with the placement of furnishings. People are looking for value in the spaces they use, and when the room is not being used it loses value in the eyes of the owner.
If a builder wanted to eliminate a major amenity from his/her plan, which would you recommend?
Lita Dirks: I have two thoughts: One would be to eliminate the fireplace. Sometimes in smaller floor plans the room furnishes better without a fireplace. Also, the fireplace is often seen as a “fuel waster.” In the green world we are all trying to create, it might be an easy amenity to eliminate, but know your buyer and your location.
Another amenity would be the grand entry. Grand entries use up a great deal of valuable floor space. That floor space equates to square footage which equates to dollars. A lovely entry can be successfully achieved using views, lighting and good design. Put the saved square footage to use elsewhere or simply eliminate it.
Elise Platt: VE is not about eliminating, it’s about balancing. Change things home owners can add later. Fireplaces, granite, flooring....if you are talking about neighborhood amenities...the big clubhouses cost a fortune to run...you can do a lot with less in most instances.
How detailed should the virtual walkthroughs be? Should they include all amenities?
Lita Dirks: The virtual presentation should include the rooms you see from the entry, plus other major selling spaces such as kitchens, family/great rooms, master bedrooms and master bathrooms – these rooms provide the biggest impact. If a real model is also available, then consider varying the amenities between the virtual and real models. Having both model types provides the builder with the opportunity to show several options, not just one.
Can you offer tips on enhancing pre-sales efforts with the virtual walk-throughs? How can you “wow” potential clients?
Lita Dirks: Virtual reality needs to be experiential. Make the viewing room or area simple and memorable. Keep the focus on the screen and make the screen as large as possible without distorting the image. Use music that reinforces the theme of community but not too loud to interfere with the moment. The idea is to capture the future of what will come.
Elise Platt: Lita’s answer is right on. I would add that we recommend builders train the salespeople how to sell using this great tool. They need to walk buyers through the virtual as they would walk them through a model...pointing out the "hot buttons" as the buyer sees the home and ASKING the buyer lifestyle questions as they would in the real model home. Builders should look at the Virtuals as a "live" walk-through not as a "movie" and salespeople should be trained to truly take advantage of the tool not use it as entertainment.
Comments on: "Your Questions Answered: Value-Engineered Housing for Today's Buyer Market webcast"
More like this
- Professional Builder's February 2010 Market Research Roundtable
- Great home plans: check out this 2,500-square-foot head turner
- Lean Design Blog: Presenting a Lean-designed, 3,300-square-foot home
- Value engineering’s role in Lean design – Lean Tuesday with Todd Hallett
- 2 hot design trends that will delight your customers