Monday, February 6, 2012

ANOTHER MODULAR HOME BUILDER'S ADVANTAGE OVER A STICK BUILDER

Over the past 30 years I've been involved in all phases of home sales and construction.  I held a Real Estate License for almost 5 years before the interest rates climbed to near 20%.  That was followed by 4 years as the General Manager of one of the largest DIY/Contractor lumber yards in PA.

I thought that being a General Contractor was what I wanted to do so I left the glamorous world of retail sales and started my own new home construction company.

After 13 years I had enough dealing with subcontractors, building inspectors and "know it all" prospects and went to work as a Sales Rep selling modular homes for several of the largest modular home factories in the East. 

That's when I learned that modular home builders have a real advantage over their stick built kin. 

While I was stick building, I had to estimate every house myself.  I put together the lumber loads, every nail, kitchen cabinet, window and all the other costs that go into building a home.  Estimating was never easy.  A prospect would bring a dream drawn on a scrap of paper and I had to draw it out and create a materials and labor estimate only to have the prospect change their mind, sometimes even before I got back with their quote.  A quote usually took me a week.



But my eyes were opened when I became a modular home sales rep.  Not one modular home builder...EVER...did their own estimating.  

Every single house that walked through their front door was sent directly to me for pricing, even though they could have done it themselves using the price book we published.  Lord knows why we even give them to the builders, they never open them.

This created a huge advantage for the modular builder even though most of them didn't think it was.  Here you have a small independent home builder with no staff and maybe only one helper and he or she can turn out quote after quote in as little as one or two days.  Now how cool is that!

I remember one Sales Manager telling the reps to hold off giving back a quote to the builder for 3 days, even though we could usually turn it around in 3 hours, because the builders will just start sending over so many quotes that it will take away from our sales and closing ratios.  I agree and disagree with that.

So if you are a stick builder looking for one of the most overlooked reasons to become a modular home builder, just ask yourself how much your time is worth and then figure out how much having a complete drafting and design department, a costing staff and a purchasing department is worth to you.

Factory quotes, the other advantage!

5 comments:

Anonymous said...

Only took me five years to learn the value of the pricebook. It is amazing what one can learn when they actually read the book.

Coach you are a learnered man. Good post

Anonymous said...

Coach, I think you inadvertently ask a major, major question. If the 'mod builder' relies on the factory to do the heavy work, engages in mostly low and lid-level clerical and admin paperwork, (if you agree that high level paperwork require a lawyer/architet/engineer), doesnt make a lot of sawdust, what is the homeowner paying him/her for? A stick builder will actually be at the site, make lots of sawdust, accept/decline what the lumberyard sends over, etc.

I think a factory or homeowner could actually do what a 'mod builder' does at substantially less cost.

Anonymous said...

Coach:
Just read the article and am amazed at the statement made that the modular builder does not have to do any estimating for pricing out a home. The price from the factory is but a small portion of the total cost. What someone is forgetting is all of the associated site costs, sheet rock repair costs, framing repair costs, roof repair costs ( ever have a wracked roof come from the factory?)( also, did you ever have to fight with the factory to determine what really caused the damages during transit and who is responsible for the water damage on a home because the plastic had a tear in it?),cleaning costs, carpet installation costs and all of this is before we get into things like the HVAC, Plumbing , electrical, etc. I have built both ways and based on my past stick built homes sold and costs of individual items, I can give a very tight cost per square foot based on specific allowances for cabinets, special roofs etc. In stick building I do not have to worry about fuel surcharges, escort charges, carrier maintainence fees, lumber surcharges,crane charges, costs to pull a truck out of the mud on a lot, etc.
Also, when someone at the plant tells me that I cannot have a house until 2 to 2.5 months down the road, it takes away all incentive to purchase a modular because of the speed of construction aspect.

Coach said...

Anonymous 7:53
I agree with you 100%. Every part of a house, whether it's stick or modular must be costed accurately.

The major advantage I mentioned is that the "house" portion of the pricing is almost always calculated by the factory saving the builder a ton of time.

All the other things must be done by the builder including all those wonderful unforeseen things that can arise when using modular.

I never said being a new home builder was easy...but the great feeling you get when you give the keys to a new family are worth it.

Manufactured Housing said...

Thanks for presenting the advantage of a builder over a stick builder. We know time is a valuable thing, some contractors may waste it more than we think. It's important we know how the systems work out for us to know if what they are doing is right or just getting much of our money. Building houses takes much of our money, we just need to stick with a plan for us to save, and some how use materials not as expensive but must also be quality.