Would you design and buy a home entirely online – picking everything from the lot to the cabinets without ever seeing or touching them in person? Many people say they would, according to a company that’s leading builders in that direction.
And when it came time to sell, what if you could spruce up your place to today’s standards without spending a dime of your own money until the house sold?
These are two of the hottest trends in housing today. But in the case of purchasing a new house, buyers are light-years ahead of builders.
“We are playing catch-up,” said Jay McKenzie of BDX, a digital marketing company for homebuilders.
In a recent survey of 1,000 shoppers visiting NewHomeSource.com, a site where folks can search for newly built houses, 1 in 4 said they’d be happy to purchase their homes entirely online. Many would even pay their deposits, closing fees and design consultation charges online.
And why not? After all, today’s consumers buy everything else online. Even automobiles: Customers look at the available inventory and pick the model, color and options. They might only visit the dealership to take a test drive and validate the paperwork.
The Internet as Sales Frontier
To catch the trend, BDX is building an e-commerce program for homebuilders. In the initial phase, buyers can put down a deposit to reserve the lot of their choice. But eventually, according to McKenzie, the program will do much more.
Working with a group of builders who see the internet as the next great sales frontier, BDX has mapped out a consensus of what steps in the buying process it can bring online, and in what order.
One facet will allow visitors to a builder’s website to walk through an entire model home that does not exist, eliminating the need to erect and maintain an expensive sample house. Another would create an online design center where buyers could view the myriad choices available to customize their purchases.
The online center would feature hundreds of thousands of products, all with prices listed, so you can look at flooring, lighting, appliances, countertops, cabinets and more until you find exactly what you want at a price you can afford.
“Everything would be in the library,” said McKenzie.
Some builders might even add furniture to their offerings. After all, many new homebuyers purchase furnishings shortly after they move in, so why not make it easier?
This so-called “Dreamweaver” component will not only obviate the need for costly on-site design centers. It also puts an end to what some builders call “design center divorce court,” where spouses battle over selections, sometimes to the point where they throw up their hands in disgust and cancel the deal altogether.
Like they do in the auto sector, customers will make their selections through Dreamweaver from the comfort of their current residences and head to the sales office only to finalize things.
New Renovation Financing
But what about selling your house? Many owners value speed above all else. They believe the quicker the place sells, the better – less hassle, less intrusion, fewer headaches.
But in pursuing a speedy sale, they often leave money on the table. How much? That’s impossible to say, since each case is different. But one source says it could be as much as six figures.
Many sellers try to maximize their gains by doing minor repairs, adding a fresh coat of paint and staging the place in order to secure a higher price. Some folks even go so far as to make major renovations such as remodeling their kitchens or finishing their basements. Those who do often base their improvements on what their real estate agents suggest will catch a buyer’s eye. And many agents, in turn, seem to base their recommendations on the annual Cost vs. Value survey from Remodeling Magazine.
That study is a good first look at the localized cost of kitchen and bathroom remodels, new windows, doors and other upgrades, as well as how much they might add to a home’s value. But it sometimes raises the hackles of agents, who complain it is far too specific to be useful to most sellers.
Enter presale renovation firms that offer, among other advantages, to help sellers take the guesswork out of the equation and pay for the work so there is no out-of-pocket cost to the owner. They hire the contractors to do the job and wait to be paid when the house sells. They also take over the back-office functions that often cause otherwise qualified contractors to fail.
Such companies “provide the entire back office so the contractor can pick up a hammer and do the best job possible,” said Michael Alladawi, founder and CEO of Revive Real Estate.
The Compass real estate brokerage is often credited with starting this business model, now utilized by companies like Revive, Curbio and others. Revive just signed a deal with The Keyes Co., a major Florida brokerage, to help clients maximize their profits. And Curbio just signed on to a pilot program with Consumer Reports.
What kind of money are we talking about here? Revive says its clients obtain an additional $186,000 in profits when selling their upgraded homes. That’s not a typo – and it’s not chicken feed, either.
Lew Sichelman has been covering real estate for more than 50 years. He is a regular contributor to numerous shelter magazines and housing and housing-finance industry publications. Readers can contact him at firstname.lastname@example.org.