With the rise of Amazon, Airbnb, and Carvana, today’s consumers expect to purchase products—large and small—on their own time, at their own pace, and with extreme convenience. Some home builders have struggled to keep up, concerned that home purchases are too large and complicated to complete online, but others have broken into the e-commerce market and are beginning to sell their homes directly from their websites.
Shortly before the COVID-19 crisis hit, Idaho-based builder CBH Homes launched its Tour Now and Buy Online features, which allow potential home buyers to tour a home on their own time with a specialized lock and code and then buy it from the comfort of wherever, whenever. Initially, the new tool additions were implemented to give consumers more control, but they have also helped the company adapt and move faster during this global pandemic.
BUILDER had the chance to speak with Ronda Conger, vice president at CBH, which ranks No. 38 on the latest Builder 100 list, to hear more about the programs and how they have affected the firm’s traffic and sales before COVID-19 hit the U.S. and after Americans were required to spend more time apart.
1. How does the Tour Now feature work? How did the idea come to be?
If you think about it, the old traditional way to get into a house is with a sales agent or a realtor. There’s this complete barrier to our homes because there are only two ways to get in. We realized people want to get into the homes, and they don’t always want to do it on a set schedule 8 to 5, Monday through Friday. We’ve turned into a society where we want control. We want to do everything ourselves, and we want it now. When you look at VRBO and Airbnb and all these ways you can get into homes, why aren’t we doing the same thing? That really kind of spurred this idea.
I asked some friends in the industry about different lock systems and how we could do this. We researched and found a company called Rently. We started with 10 locks. Basically, you take this keypad lock, you put it on your home, and the home buyer pulls up. They have to—for a security measure—provide their driver’s license. It’s really to prove it’s truly them and to keep out any vandalism. They pay the 99 cents to do a security check, they receive a code, and in they go on their time. They can stay as long as they want and then the door will lock behind them and the code expires.
In my opinion, we, as builders, have to keep evolving and changing, and we really haven’t. I’ve been in this industry for 30 years and it’s the exact same model trap that I started with 30 years ago. The only way that we sell homes is if we get people in our homes, so that’s got to be our motive. We started with 10 and realized we had a home run because people were popping those locks, getting codes, and coming in at a very high rate. Now, I think we have close to 150 locks out there.
2. Since its launch in August 2019, how have buyers responded to Tour Now?
It’s been crazy! As we started to launch it and shout it from the rooftops, we realized that people who normally would not talk with us or make contact with us were popping locks. They were going into the homes and buying. In six months’ time, 30% of our buyers are coming from people who have popped a lock, went into the home, and may or may not have ever made contact with us. They probably have been on their sofa surfing [the internet], but they didn’t register with us, they didn’t walk into a sales center and fill out a reg card, they’ve just been quietly stalking us. Now, with them having the ability to tour the house on their own, they went in, they loved it, and they are buying. It has absolutely increased sales and traffic.
As a result of the recent pandemic, Tour Now sales have jumped to nearly 70% of CBH home sales. Due to the success, CBH has invested in the purchase of 100 more Tour Now locks, giving access to over 200 available homes throughout Idaho’s Treasure Valley.
3. From there, what led to Buy Online? How will buyers be able to reserve a home online?
Tour Now proved to us that buyers want to be in control of this whole process, look at Carvana. There’s so many things out there where people are used to having control and being in the driver seat with what they are purchasing. We realized we can give them that same experience. We went from 10 locks to 150 locks and that was because the response was overwhelming, people coming into our homes. Now, they have the power to look at it on their own, and we realized we needed to give them the power to buy it when they want to as well. If they are home at 10 p.m. and decide they want it, they don’t need to text a realtor or wait for our office to open, they can just hit the ‘Buy Now’ button and know that the house is theirs.
[With Buy Online, once the customer provides a $500 deposit, which is applied toward the price of the home, the house will be reserved for one full business day. Buyers are then required to make an appointment with a CBH sales specialist and will continue the process from there.]
The other thing that happens is maybe they don’t know all the options and we want to say, ‘You want to buy this one, but do you know that we have this one that might be a better fit for you?’ We want to give the opportunity to acknowledge that this is still a very big purchase. So, let’s get you into our office, sit you down with one of our representatives, and ask if this the best thing for you. And if it is, let’s do it, or maybe there is this or this. It’s kind of protecting them, but also giving them the opportunity to take that house out of the running for a minute.
4. How have buyers responded to the Buy Online feature?
We launched it on a Friday to the public, and by the following Monday we sold our first one online. That’s record time to me. We are so happy and they loved it, too. They were at home, they had been looking at it and thinking about it, and that function came online. They said, ‘Let’s take it off the market.’ It kind of gives you peace of mind, in my opinion.
We are continually watching our numbers and like what we are seeing. People are clicking on the Buy Now button, adding to the cart, and we have about a 10% click through rate. We are happy with the initial sales and know that it will just keep growing in this environment.
5. Why $500 for the deposit? How did the team settle on that number?
We want buyers to be vested. You shouldn’t take a home off the market if you are not vested. I don’t need it to be $50 and all of a sudden, you are placing five orders on me. There’s some skin in the game with the $500 deposit, and you want this house. You also have to set an appointment. If you don’t set an appointment within 24 hours, it just goes away.
6. The home building industry has been slow to adopt this kind of technology. Why?
As an industry, we’ve always done it this way. I think also people think home building is such a big purchase and there’s no way you could buy it online. As we see everything evolve with e-commerce, you can buy anything online. We have to shift with the times and the market. I think VRBO and Airbnb are literally paving the way for us to show us that this possible. As a society, we want to buy when we want to buy. It can’t be guided to old banking-hour mentality, in my opinion.
7. What advice would you give to other home builders looking to adopt this technology?
Get to it! We are still working to find the best lock. We started with one lock and went to another system. I guarantee you we will go to another because we are always trying to find the best fit. We will constantly evolve and tweak that and make sure it’s the right system for us. I think you always have to be on the hunt. I want buyers to tell me what they want and what’s working. Jeff Bezos and Amazon say you have to meet the buyer where they are and do what’s best for them, not what’s best for you. With all this technology, we are literally meeting the buyer where they are with what they want, and they are telling us that.
8. What’s next for CBH Homes?
Our big thing is mastering our lock system. I have over 500 homes on the ground right now, so I would love to have all my homes on locks. We will get there. Because we’re new to this, the cost is higher than I’d like. I’m hoping as more people adopt it that my costs will come down, and I’ll keep purchasing more locks.
We already have a big online sales team and we will continue to build that. Every time you pop a lock, it goes to my online sales team and they make sure the buyer got in and will follow up: how was your tour, do you need anything, do you want an appointment? You kind of have to have both—you can’t set the lock and walk away. We will continue to build our online sales team with it, which will then keep building our Buy Online platform.