Did you know the builder you choose to build your home could play a huge role in how satisfied you are with your completed home. In fact, 93% of custom home buyers believe that the builder selection impacts their satisfaction with the finished home. But do homeowners have that same confidence in their builder selection? On average most homeowners spend less than three weeks evaluating custom home builders. This is a relatively small window of time in which to make a very important decision.
Scale Dictates Service Model
National construction companies typically operate under a volume driven business model. Their focus is on delivering a consistent product efficiently on a large scale. While they can deliver a great product, meeting the individual needs of clients through customised solutions is not their main game. Typically, national builders re-use similar floor plans, repetitive details and standardised products across their geographic footprint. They also maintain typical construction completion timeframes based on a factory style approach to building repeat forms of construction.
Local builders function differently.
Because the smaller firms are less complex, each project can be tackled on an individual basis. The large firms, such as national builders, which are producing fifty or more houses per month, cannot accommodate as many individual project variations as the smaller firms. These deviations from standard procedures which can cause so many problems in a production mode, become manageable or even trivial when building only a few houses.
Market Knowledge Runs Deep
What national builders overlook is the knowledge that Builders local to you have about building codes, construction methods, and what types of foundations are required for your home based on the soil that your house will sit on. The Builders Local to you live in also have knowledge of the typical weather patterns and seasons for your area, which could affect the time it takes to complete your home building project. They can also choose materials that are relevant to your area of residence. Builders local to you have been dealing with these challenges for years, therefore they are better equipped to complete your home building project more efficiently and of better quality.
Unlike other designers who work with software to produce plans, home builders have unique insight into the building site and knowledge of what will look good in that specific neighborhood. In addition to computer aided design, home builders also consider other factors that will affect the resale value of the home such as features that home buyers are looking for and features that will add value. For example, Knox County OH home builders would consider characteristics of rural Ohio construction including challenges to building on clay soils, as well as homes that look as though they were born in the Ohio countryside and reflect the state’s and country’s agricultural past.
Large national companies lack awareness of local issues. To compensate for this, they hire local subcontractors, consultants, etc. But as a result, there are many layers of intermediaries between decision makers and local knowledge, and slow responses to local issues.
Customization Versus Standardization
The extent to which local builders offer customisation on standard display home plans differs depending on the culture or philosophy of the builder. For this National Display Home Comparison the local builder is from an Amalgamated Group of Homes who seem to offer more customisation than the national builder eg. they can use stone, change plans mid project and obtain items outside of the standard inclusions of the display home.
National builders are well suited to delivering a high quality building from a proven process within established parameters on a budget and to time. However they are less able to deal with variations to the building specification. This can make a self build project more challenging.
Implementing changes may require approval from the corporate office, vendor negotiations, and changes to systems. Depending on the circumstances, implementing these changes can take weeks. A three call process to implement a change at a small builder might take three weeks to implement the change at a national builder due to the process required to coordinate with employees in other locations.
Material Sourcing Patterns
When building a home locally, builders are able to source materials and products from local suppliers allowing them to use preferred products at competitive prices. In addition, they are able to find local suppliers who carry specialty products and builders who meet delivery schedules on time.
National chains have bulk purchasing power on standard goods, but their procurement systems can become cumbersome when dealing with out-of-the-ordinary products or rapidly respond to local supply chain issues as a project slips schedule.
Communication and Decision-making Speed
Small builders in local areas tend to operate a more fluid system of communication in contrast to their national house building counterparts.
We have the local Builders involved in the decision making process in order to respond to any questions or changes the owners may wish to make in a timely manner. On average the Project Manager has sufficient authority to make decisions on a project’s progress while on site and is able to act upon these decisions without having to clear them through the corporate office. This is different than the designers and contractors we work with on the West Coast.
Local companies generally are more disorganized, which means the project manager reports directly to the CEO/President. Decisions can be made much quicker but lack the quality control and oversight that a larger organization affords.
Although we have built in a number of checks and balances in our processes to try and catch mistakes earlier, there are times when things still do not go as planned and it takes longer to complete a Red Hills Home. Local builders can react quicker than our national process. For example, we had a home-owner who wanted to make a change to the floor plan during construction. A local builder was able to work with the home-owner and have the modification completed within days. In contrast, the national builder’s process would have taken weeks to receive approval, and then even longer for the production teams in different departments to update the plans, spec sheets and price lists.
Financial Stability and Warranty Backing
We partner with national construction companies that have the finances, experience and corporate warranties and guarantee’s that far exceed what smaller builders can offer. But most importantly we can guarantee that the biggest national companies will still be around to honour a 20 year warranty in 20 years.
Being visible to all the neighbours can encourage a local builder to ensure that he provides a good quality experience in order to ensure future repeat business. However their ability to pay and fund any necessary repairs for latent defects will be impacted by the current success of their business and one unhappy customer can impact sales for 3 years or more. Local builders generally have lower reserves than the larger national companies.
Cost Structure Reality
When considering a new build, it is often difficult to compare pricing between local builders and the larger national brands. Typically, local builders will start from a lower base price due to the lower overheads, but the ability to customise the home as it is built can add significant cost as owners make changes to the design as they progress through the build.
As national builders, our systemised building process provides owners with cost certainty as we can provide fixed price contracts due to our bulk purchasing power with no scope for cost overruns. However, this benefit comes with a catch – you have limited options to vary the scope of the building project and any changes are dealt with through change orders.
All our approaches offer a trade-off between predictability and adaptability and the resulting costs. This however will depend on the client’s priorities as well as the specific characteristics of the project.
