When prospective buyers visit Werschay Homes looking for a new house this year, owner David Werschay wants them to be excited. “When people come out and see us, we want to be better than when they last saw us,” says the St. Cloud, Minn., builder.
That’s why Werschay, who typically builds six to 10 homes semi-custom and custom homes annually, joined Values That Matter, a new specialty builder program offered by longtime home building industry consultant Al Trellis’ Home Builder Network.
Launched several months ago, Values That Matter offers member builders access to a set of new, space- and energy-efficient home plans only available to Values That Matter builders; a professional marketing campaign; a chance to brand their company as a “Values That Matter” builder within their chosen markets; and the opportunity to collaborate with fellow builders in different markets across the country.
“It’s a way for the small builder to have a chance to compete with the big guys,” explains Trellis, who hopes to add a conference, estimating/materials information, and social media to the effort. “We’re trying to bring a level of professionalism to the marketing and design [to Values That Matter homes] that the average small builder could not afford on its own.”
It also offers these builders fresh ideas at a critical and unpredictable place in the housing recovery, as the tax credit nears expiration and the economy tries to find its footing. “We’re coming out of a time when none of us have any money for marketing, but we also realize how important that that is,” says Werschay. After a downturn, home buyers invariably want something different. Between economic and demographic shifts, their priorities and interests have shifted. “You don’t want to show them the same old thing,” he says.
With 12 plans completed and three more currently in the works, the Values That Matter collection includes ranch and two-story layouts with a variety of elevations and room configurations, with the intention of offering buyers and builders the flexibility to devise a personalized floor plan at range of price points.
“Business today is all about differentiation, economies of scale, and value to the consumer,” says Trellis, who partnered with Richard Elkman of Group Two Advertising in Philadelphia and Jerry Gloss of Knudson Gloss Architects in Boulder, Colo.
So far, approximately 20 builders have registered with the Values That Matter program, which currently costs $3,250 to join. “If you look at the numbers, you realize that we can’t get rich off this program,” Trellis says. “We want to find the right way to help small builders to succeed.”
It appears to be working. “We signed up with the program three weeks ago, and we already have two people interested in building these plans,” says Ron Bartsch of Sussex Construction in Helena, Mt.
Sussex, which is a design-build firm, typically does six to 15 higher-end homes ($350,000 to $750,000), but the Values That Matter program has allowed him to expand his offerings beyond his distinctive custom homes. “We have an in-house architectural staff, but we were missing a whole segment of the market: those folks who don’t have the time, money, or interest to invest in a custom home,” Bartsch says.
Builders interviewed for this story also see the Values That Matter program responding to the needs and wants of the very different, post-downturn home buyer. “There used to be this mentality of, ‘Oh, we’ll live in [a house] for two years and flip it,’” Werschay says. “Now, it’s a longer term investment, and people are more concerned about efficiencies in design.”
Bartsch agrees. “This program is really focused on the values that our buyers are concerned with,” from energy performance to well-conceived living spaces, he says. “It’s a very consumer-based program. In the ego-driven builder community, we are sometimes more focused on ourselves. People get complacent during a four- to five-year boom.”
What doesn’t the Values That Matter program cover in its philosophy or marketing materials? The federal home buyer tax credit, which has been a cornerstone for countless other home builders during the past year.
“The simple reality is that the opportunity for the tax credit is diminishing rapidly,” notes Bartsch.
For buyers to take the credit, they must have a signed contract by April 30 and close by June 30, which is putting pressure on builders and buyers alike.
“We’re not going to fall into that time frame,” Werschay says matter-of-factly.
So, these builders have chosen to focus on what they see as a more sustainable marketing message: value. “You’re not going to get the $6,500 credit because we won’t be done by the end of June, but you’re going to get more than $6,500 worth of value in efficient design and building,” Werschay says.
Alison Rice is senior editor, online, at BUILDER magazine.