Home Sales Are On Fire… And Being Done Like Never Before

Recently I ordered things online that I never thought that I would; however, these are unique times.

And, although I have surprised myself with my online shopping habits, I haven’t ordered a home. Yet. Many home builders are creating processes that are leading more and more to a complete online experience for the home buyer.

Linda Mamet is chief marketing officer at TRI Pointe Group, a California-based on-site home builder, and shares some of the company’s recent digital success. Almost half of the net orders in the second quarter were captured via virtual and one-on-one appointments with an online sales team, which is up more than 20% from the first quarter. Plus, that growth is during the company’s second largest historical sales month, with 624 net new home orders in June.

“The one-on-one appointment driven sales model across TRI Pointe Group over the last 12 months has produced sales conversion results two times that of walk-in traffic,” said Mamet. “We anticipate an ongoing shift in consumer home shopping behavior and believe we’re well positioned to continue to evolve.”

Matt Howland, president at Dvele, a California-based home manufacturer, says in recent months that Dvele sold three homes without ever seeing the buyers, by using only digital transactions.  

Steve Glenn, the CEO at PlantPrefab, a California-based custom home designer and builder, has a home configurator that buyers can use to design a home, plus add packages, furniture and work on interior design.

“We launched a new site in February and have seen substantial growth, dramatic increase in time used,” Glenn said. “It’s 3D and real time, which people use a lot and they love it. The old way of plans are often hard to read and understand. Now, they can move through in a 3D real time environment and the audience is technically literate. The online buyer is a more educated, more sophisticated buyer who has invested a fair amount of time doing research.”

Some of these solutions were motivated by the critical need to transition to digital processes created by the pandemic, however, some were strategically proactive to create a better customer experience and have been in the works for quite some time.

Building a Better Customer Experience

TRI Pointe Group was already invested in online sales solutions, but accelerated the pace when the pandemic hit and now offers a very comprehensive platform; including virtual tours, virtual home closings, quick move-in home reservations, smart locks for self-guided tours, online design studios, and interactive floorplans, site maps and sales galleries to view options in real time.

Last year at this time, on site builder Van Metre was already ahead of the digital curve.

The Virginia-based home builder hired a crew of video game developers two years ago to start what launched one month ago as the Build Your Own Home tool. In that short time, more than 500 people used the tool each week, ranging from millennials to tech-savvy active adults who want to avoid the danger of face-to-face interactions in a design center.

The tool offers a 3D experience to customize certain elements in the house. While at the moment it only focuses on the most design-heavy areas of a home like the kitchen and the master bathroom, plans are to move to exterior design features and even structural elements.

“Our tool came to fruition at a unique time with the pandemic and having already been developing it for two years entirely in house,” said Paul Jester, vice president of market intelligence at Van Metre. “We then had the tools for sales to get pricing without being in the same room.”

Right now, the tool is acting as a lead generation tool, but Jester and his colleague Glenn Forester, the vice president of marketing at Van Metre, have already started down a parallel path to manufacturing the home and anticipate that the whole process will start flowing seamlessly together in the next couple years.

Dvele also has built an online process, that can now connect to the home manufacturing process.

“The entire [home buying] process is very fragmented,” says Howland. “It’s very difficult to get a uniform experience. At Dvele, we have both sales and customer experience, with the goal to make a great experience for the customer. We look at a continuum of digital experiences, and we want consumers to come in and daydream—build it and revisit.”

Dvele rethought the typical builder approach, which focuses on the mechanics of the tasks that the builder needs to complete, rather than what the customer experience is like. In the onsite process, it takes between 9 and 12 months for someone to build a home and that experience includes chasing down subcontractors, getting overcharged, trying to manage timelines, rethinking product selections, and many other delays and stressors. Whereas, the Dvele process focuses heavily on media assets and constant interaction as the home is built online to eventually create a dream house that can be celebrated, shared and that the buyer is excited about.

Orla McGrath is the marketing director at Urban Splash, a UK-based builder and designer focusing on modular construction, and the firm took the same intense focus on customer experience using a digital process.  

“We started with the customer and how to deliver homes that people designed themselves to suit their way of life, along with the concept of space and not of rooms,” McGrath says. “There is such a focus on rooms – you could have four bedrooms but two are unused, but it raises the value of the house. We still have to market on the basis of rooms, but we are trying to reeducate the consumer. Your home should be able to grow and adapt with you.”

The way that Urban Splash gives customers that experience is by a very holistic online sales process combined with the right product. Urban Splash builds modular, prefabricated homes with exterior load bearing walls that can be reconfigured very easily without engineers, so the design team can actually help the buyer think about how the home will perform today and tomorrow, along with design considerations for both.

All of which hits on an interesting juxtaposition. While the sales and marketing process moves further away from human touch, popular home and community design trends are pointing to more human connection and interaction.

On a recent event conference call, David Miles, president and brand strategist at real estate marketing firm Milesbrand, and Mollie Carmichael, principal at real estate advisory group Meyers Research, discussed the built in conflict of trying to connect and create a personal experience for a home buyer and trying to do it through a virtual process, which is more and more prevalent as it is being catalyzed by the pandemic.

Results Are Clicking In

While the strategy is certainly there for these organizations, what does the process look like and how are customers responding? Urban Splash has an online configurator. During a recent week, 5,700 people visited the site. Ten percent used the configurator, and from that, 10% saved the design, or about 50 people.

They also launched a virtual viewings platform during the pandemic that allows customers to go through a 360-degree tour of the home and then use the configurator with a sales person. Margrath shares that when left on their own, customers only spent an average of four and a half minutes on the configurator, but with an online appointment with a sales person, it went up to an average of 25 minutes.

While the dream is to have the configurator send the design straight to the factory, Urban Splash is very happy with the results. The last two months have both resulted in record sales.

As a side note, Urban Splash is partnering with Sekisui, the largest home builder in the world. Sekisui has team members in the UK who consult with Urban Splash on a regular basis on every part of the business to focus on bringing the ethos of what people really want from their homes.

With Dvele, the customer gets on the site and starts the configurator, choosing basics like the floorplan and the finish colors. Then, the customer saves the design and it goes to a second digital asset that Dvele calls Owner, taking the initial footprint of ideation and passing it to the design team.

In the second stage, the design team works with the customer to work out any customizations that they might need, for instance, extending the bedroom two feet. The Dvele team captures all the data from these customizations, compiling them to inform future standard offerings.

All communications with the customer are done via the portal, which is a comfortable, social media-like interface, that hosts the 3D plans and other assets, such as a soils report. Not only do they see these less sexy assets, they also get to see pictures of the home as it is being built. Dvele takes daily photos during construction that are uploaded to the portal.  

“They see continual process,” Howland says. “Because our pace is so much faster than on site, we have movement and excitement. They see progress.”

The inspections are done in the factory, along with engineering approval and the site inspections, and the customer has total transparency to what is happening and when it is happening. The buyers are encouraged to come to the factory and walk the home, which about half do. Then, after any punch list items, the home is shrink wrapped and delivered to the site.

“We make it a fun event,” Howland says. “We move four huge modules with a crane and all of a sudden they have a house. We ship ours so that the appliances are in and it looks like an actual house. Then there is a month of stitch and seam and utilities, local hook ups. The customer sees all of these things happening—week long air quality checks, passive house test. Then, as soon as we get the certificate of occupancy, we have a concierge take them for a tour of the house.”

Another Indiana-based offsite builder, Baya Build, is launching an online tool and taking the experience to the next level.

“The entire process takes 31 clicks and as little as one minute to design the exterior, interior and all the features of your home,” said James Casper, founder of Baya Build. “There are over a trillion permutations (1.24 X 10⁴⁰) to choose from, but it’s intuitive, quick and easy. There is zero ambiguity. You see and get what you want.”

When customers are online doing their design, they see two numbers that are updating on demand, the time that it will take to build the home and a cost calculator that Casper says is accurate to the penny.

“Our goal is to democratize the industry, enabling the fairest value to the consumer,” Casper said. “The end result is offering affordable luxury, high performance structures to a wide range of people, which benefits the buyers, the environment and therefore the economy.”

This type of online home buying experience is something that I think I could definitely enjoy!

Landing on the Right Site

There are certainly some challenges to the process, including buying the land, surveying the land and preparing for the delivery of the home.

Clayton Homes, a national modular home builder based in Tennessee, recently introduced a new search engine tool, Find Land, that assists buyers to find lots available with the right zoning. This critical part of the process can be a major challenge.

Using Find Land, buyers can search by ZIP code for available lots on a map and filter by price range. The results include photos, real estate agent information, and zoning details for manufactured offsite built homes.

Plant Prefab also has a tool to analyze the specific property, including a zoning analysis for any address in LA County, that includes setbacks and height limits. Plant Prefab staff study Google Maps for obvious challenges, then perform a more formal feasibility study, paying a transportation vendor and crane operator to visit the site, ultimately to be 100% certain that there are no issues with transport or install before the project is started.

“We cannot totally be online because there has to be a feasibility study of the site to get modules there and to get cranes there, including the height of the home,” says Glenn. “There are issues with access to certain sites, roads are really narrow, tight turns up a hill, lots of trees or power lines; those aren’t things you want to find out when you deliver the module.”

Programming the Future

Howland also does not foresee a future with just “click to ship.” Right now, the Dvele sales process is predominantly education, which is currently not set up to happen online.

Plant Prefab is working on moving more and more of the process and building in some of the ancillary tasks online, such as the financing and the interior design.

Regardless of the building process, the technology continues at a fast pace. Innovations like MeetElise, an AI leasing assistant, are smart enough to not only respond instantly to customers, but answer about 90% of questions about a home, regardless of where the lead was generated.

This solution, popular for apartments, has been working for build for rent as well, saving leasing agents hours per day and avoiding face-to-face contact in the pandemic world.