Are you looking to build a new home on your land? Maybe you’re considering working with a volume builder that deals with a set of stock plans that you can alter, or a home builder that doesn’t allow any changes to their stock plans. There are a few large, on your lot, volume builders in the area, such as Reality Homes Inc. (out of Fife, Washington with branches in Burlington, WA, Centralia, WA, Woodland, WA, and Woodburn OR), HiLine Homes (out of Puyallup with offices in Woodland, Centralia, Yakima, Grays Harbor County, and Jefferson County in Washington), Lexar Homes (with offices scattered about), and Adair Homes (out Oregon with offices in Aura, OR, Medford, OR, Bend, OR, Creswell, OR, Olympia, WA, Caldwell, ID, and Woodland, WA). In your search for a volume builder, you may have come across prices that sound too good to be true and asked yourself, “How can these contractors make a profit?”, “What ensures that I’ll get a quality home?”, “What type of products are they using?”, “Will I have resale value?”, “What are my final costs likely to be?” (that’s a big one), and of course, “What are the hidden costs?”
First, let me introduce myself. My name is Lewis D. Mann. I’m the owner of True Built Home (www.truebuilthome.com), and I previously worked with HiLine Homes (www.hilinehomes.com) for more than three years as an independent contractor, selling their homes and learning the business (1996-2000). I later went on to co-found Reality Homes (www.realityhomesinc.com) out of Fife, which lasted three years as well for me. I used to say that I have assisted hundreds, but I have later revised that to say thousands of families, builders, and contractors to understand clearly what is involved with an on your lot volume home builder, and what pitfalls might occur in the building process. I have seen builders of this nature up close. I have observed the entire scope of the process, first-hand. I have absolutely seen the great, the good, the bad, and the downright ugly side of this business. Since I originally wrote this article around 2007/2008 and it’s now getting closer to 2020, you can see that I have seen it all.
First, the client finds an advertisement in the paper, real estate magazine, radio, TV, or perhaps on the internet. Maybe you have searched using words like, “custom home builder”, “on your home builder”, “on your lot builder”, “volume builder”, etc. and came across their website. Next, you might make a phone call, or pay the local office a visit. You’ll hear the pitch – they’ll describe the process, and if they have a model home, you might just get lost daydreaming of owning your own home in your visit. You might have a million and one questions that you are going to ask. However, will that salesperson have your best interests in mind? When you visit any showroom or model home, you have screaming above your head, “I saw your ad,” or, “I saw a home built in my area, and I wanted to come and see more for myself”. In this scenario, you are at a complete disadvantage. You’ve traveled to them, and you are on their turf (so to speak), and they will be answering questions that they have heard hundreds of times before and they will have the perfect responses for you. Sometimes with a bit of humor to break the ice. What you need is clear direction and foresight. It’s almost like looking at a shiny new car. Oh, how pretty it looks! Did you stop to ask, “what’s it got under the hood, and what kind of tires are those?” I really believe most folks get lost in the initial visit and when questioned about the warranty of something like the siding package, they are clueless.
I have included these volume builders in this informative blog because I think that you deserve the opportunity to investigate them all in hope that after doing so, you will have easily discovered that True Built Home (owned by only one man), has the absolutely most beautiful homes, with hands-down the best standard features when compared to the others.
First a bit of history. Adair Homes, as we mentioned before, was essentially the inventor of the on-your-lot building program in the Pacific NW. Sometime around 1990, the Sundby family were farmers that moved out to Puyallup, Washington. Eventually, they began framing homes for Adair. About 1994/95 they decided to do the exact same thing as Adair and solicited a draftsman to draw up some plans that were very similar. The funny thing is, while they were selling their new homes to clients, they were still framing homes for Adair to fund the company. One day an Adair project manager saw a home being built by “Creative Builders.” After they did some research, they found out that the framers, were the Sundbys. They were let go and Creative Builder’s story began. They later started doing business as HiLine Homes. The family sold homes out of their basement in Puyallup, WA, but when they were confident enough, they opened their first model home in September of 1998. A few years later, they accumulated two partners to add to the father and son team, and eventually, they broke the company up. The son sold his stake, but the father kept his, and Lexar Homes was created with two additional owners: James Moen and Bob Hollis. Most, if not all of their branches, are franchises or licensees and that is a critical piece of information that you will need to remember, but back to my story.
I remember when I started with HiLine Homes, they were concerned that it would be six months before I would have a paycheck. That first month I sold five homes, and for three years I enjoyed seeing the company prosper and the homes being successfully built. HiLine Homes was on the map and has continued to beat Adair Homes for sales volume for many years now. They were a real thorn-in-the-side of Adair, but in many ways, the roles have reversed. Things were changing, and it all came to a head in October of 2000. I don’t want to go through all the sordid details, but suffice it to say, I left. I joined a company with three other “partners” as a 10% stakeholder in the very early days of their beginnings. My partners thought that they could do the same thing as HiLine Homes. However, they needed someone that understood all aspects of the business from banking, advertisements, sub-contractors, etc. They had a large pool of investment dollars to spend and were making progress with their branch, but they did not have a grasp on the concept. They “claimed” to have contracting experience on their website, but they were sealant and caulk company, a barricade and fence company (so if that is being a contractor, well perhaps they do, but that hardly made them home builders). Now, they too wanted to become an on your lot volume builder. When I caught wind of it in December of 2000, I made a phone call to one of the owners. I revealed my desire to come aboard as a principle owner and shareholder. The talks were on. I had left HiLine Homes in January of 2001 and started my new life as a 10% owner of Reality Homes Inc.
At Reality Homes, the first-year projection was 28 homes; I set that goal. The project manager said 56, we sold 128 homes that first year. WE WERE BLOWN AWAY. But storm winds were blowing. Let me explain.
One of the biggest things I learned from on your lot builder HiLine Homes was not to oversell. Building the homes is by far the most rewarding part of the volume building business. Daily, I was getting concerned with the timelines of construction at Reality Homes and voiced it over and over again. My concerns seemed to come across to some as one who did not want the company to succeed. That was the furthest from the truth! I wanted the company to be the most dominate on your lot volume builder in our industry. I continued to clash with one of the partners. What made matters worse, six months later when the shares were awarded to me, the partners suddenly could not remember the part about me being a principle. Was I shocked? That’s an understatement. The writing was on the wall. I saw it coming a mile away, and this had a detrimental effect on my morale and sales. What was happening to me was insignificant compared to what was happening to many of the customers that purchased a Reality Home. Let me explain.
Early on, the partners of Reality Homes and the project manager wanted to allow the clients to make changes to the stock plan homes we sold. Not only did I disagree with it, but it also made me sick to my stomach thinking of the repercussions that would come up six months or longer down the line. It sounded like a great idea, giving the client what they want. As a sales rep for HiLine Homes, this was one of the big things early on with the company that was a point of contention. Over the course of time with HiLine Homes, I began to see the wisdom of their business model, and I can say after three years with HiLine Homes, I could clearly see that sticking to non-changeable floor plans was not only healthy for the company, but was the best thing for the client. Granted, we all seem to make changes now, but it has finally evolved, with software and intelligent designers, so we can make changes possible. Back to the story.
At Reality Homes, a client would want to move a wall. Sounds easy right? But moving walls around required that we needed someone to run the CAD software to make the change. Reality Homes allowed one of the sales staff members do this. It failed miserably after two months, and the project manager had little time to do it with all the other things they were making him do. On top of that, he had limited ideas on how to do computer drafting work. Now remember, these changes to homes would not reveal their errors until the construction actually began. To me, it appeared like an iceberg on the horizon, and we were the Titanic. Let me just give you one scenario.
A client wants 42” cabinets in the master bath (standard are 36”). Salesperson orders them, adds it to the home change order. Salesperson (not a trained CAD designer), adds 42” cabinets on blueprints. Cabinet company sends out the cabinets, but no one had informed the electrician. The 110 outlets were too low (the ones you plug your hair dryer or electric toothbrush into). Trim carpenter shows up and starts to set the cabinets, has to end his day when he discovers that the outlets are too low. A delay occurs, and it might be several days before the electrician can make it back out. Imagine if your house is being built 2 hours away from the builder’s nearest branch. Delays occur, and the client is paying interest on the loan. Electrician makes the change. Trim carpenters fit it back into his schedule (which may take several days because he has several homes he is working on). Because the electrician has made a change, the electrical inspector may require a re-inspection. All of these mistakes cost additional money. Not much, but it adds up. Sometimes, the cost is passed along to the electrician, the homeowner, or Reality Homes would pick up the “tab”. Next, the mirror and wire shelving people show up. Nobody informed them of the taller cabinets and guess what? The mirror that was custom cut in the shop is too big now and won’t work in the master bath. The wire shelving contractor can’t finish his job and has to stop work, order new mirror, wait a few days and then get back out to the home which may take a few more days. All the while the interest on the home is ticking. All from one change to a home that may have had several changes made. Reality Homes had hundreds of these homes. Some under construction, others waiting to start.
In a lot of respects, Reality Homes may have wanted to give the client more. I strongly disagreed with them and knew it was going to get messy. If you have just a few homes to build, that’s manageable, but if you have several hundred homes going at once, you can almost see how chaotic it would become, and it did!
Two years with Reality Homes, and over 200 homes had been sold. Customer complaints were mounting. I aired my concerns with one of the “upper management” persons at the end of 2.5 years with Reality Homes, and I told him that if Reality Homes did not fix their construction problems, “it would become a newsworthy item and may even end up in a class action lawsuit.” Then a year and a half later, King 5 Investigating called. They said that they were doing a story on the multiple complaints that customers were having with Reality Homes and the Attorney General’s office of Washington State. I told them that I had hired many the sales staff there and that many of them were good people, but at this time, “I have no comment,” because I had left the company six months earlier. I took a buyout because I really felt I had no control of anything within the company. Jesse Jones thanked me and I left it at that. It was what I had warned. I was unhappy for their failure; I was sick to my stomach. If they had only listened.
When my usefulness with the company was coming to an end, I had made it known that I would not have a problem exiting the company. I also wanted to put distance between myself, Reality Homes, and their reputation. I was never made a principle as was agreed upon, they did not take my advice on the core business ideas and fundamentals, and they threw caution to the wind. Ultimately, the clients and the contractors were/are the ones paying for this serious flaw.
Our approach to building homes
Realistically, we want to build the best home for the money, compared to what our competitors construct. On this note, I emphasize that if you look at all the builders I mention in this article, and consider their “standard” features, you will notice that they don’t always inform you of the brand names or model numbers of the products that they use for their homes.
Builder’s Standard Features:
- True Built Home – Standard Home Features
- HiLine Homes – Features
- Reality Homes Inc. – Standards
- Lexar Homes – Features
- Adair Homes – Standards
My goal with this post is not to bash my competitors. In fact, we all know each other, and for the most part, I believe each company tries hard to do what they do best. However, as the customer, you need to know something. It is far more complicated to build a home with quality products than it is to have the best square foot cost. Just as an example, if you called your local automotive parts store, and said, “I need some new spark plugs for my car,” they may inform you that they have “several brands to choose from ranging in price.” If you said, “just give me the cheapest ones,” that would make the process so much easier than if you wanted the best value, and higher quality. There may in fact be several brands to choose from that are “middle of the road”. In a lot of ways, some of these builder companies employ this same method to building their homes. They may say to the plumber, “hey just give us the cheapest ones you install”, or door hardware, “just ship us the most inexpensive ones.” I know for a certainty, one company employed a purchasing agent whose entire job was to find the cheapest items and methods to increase their profits. Ideal for the owners of the company, bad for you. However, if you were to only look at the square foot price, you are going to think, WOW WHAT A DEAL! If you are serious about building a home, then ask, “what are the products you put in your homes?” If they hem and haw, well then, buyer beware.
The Nuts and Bolts
True Built Home was designed first with the purchaser in mind, then construction staff and contractors. After all, the greatest asset to any company is the clientele. We expect that putting the consumer first will ultimately translate into less frustration for all parties from bankers, realtors, sub-contractors’ counties, city officials, inspectors, and you. Don’t think for a moment that I am selling you a “pie in the sky” idea. Building a home, especially in certain counties, can be frustrating, discouraging, time-consuming and aggravating. I remember a client in Clark County. He has 217,600 square feet of land. He is building a 1,720 sq. ft. home, with about 9,000 sq. ft. of impervious soil. The county says he has to have an on-site storm drain! Don’t get me started. However, for what it’s worth, building a home is the only means I know of to jump-start a savings plan; or selling an item (a home in this case) and make yourself a splendid profit. Especially in a fast moving market.
We are hoping for two key things to differentiate us from other home builders. First, we want to empower you with more information on the home you might be looking at. That is why we have put lots of time and money into our website. It is, as they say, “chock-full” of content. One of the most frequently asked question from clients is, “can I see the home?” Most of our homes have 3D rendering that enables you to envision the layout of a home. Although not perfect, it allows most people to visualize the home and get a “feel” for the layout. Second, is our method of construction. Through my experience of thousands of former customers of both Reality Homes Inc. of Fife, Washington and HiLine Homes of Puyallup, Washington, there seems to be one inherent trend: A lack of clear communication and real education about the process of building. Now, don’t get me wrong. We are constantly working to improve this, after all, we are contractors! We attempt to solve this issue with our website’s real-time construction process so that clients can monitor their project daily and have up-to-date access and information. It is called the Co-Construct system. In this area, True Built Home has set the standard. In fact, till this day, 8/2/2016, I do not believe any of the other builders mentioned in this article allow the client to have access to a calendar of events like we do. We have created a step-by-step guide to ordering your home, what to expect after your purchase, and what you will see during construction process. Our website is stuffed full of informative articles and information to put your mind at ease for the construction of your new home.
Are you considering building a new home? If so, there are certain facts that you need to consider. First and foremost is to understand is that construction is like having a baby. It can be joyous from day one. Feeling overjoyed with the progress that you see happening to your home, to wanting to just get it done, all of the emotions in-between, and then finally, jubilation as the home is completed and you are moving in. Just like starting a family, we encourage you to think seriously about building a home. Planning is essential to success. Here are a few of the things to consider:
• What can I ultimately afford? This is best discussed with one of our approved lenders as they will ascertain your earning and debt ratios. Note: did you know that if your appraised value is high enough (and you have owned the land for over a year), and your construction cost is low enough, you may be able to “wrap” some of your existing debt into the loan. Eliminating a large payment of a credit card or car payment may give you a more significant amount of monthly payment you can use towards the purchase of a home.
• Is location more important to you than the size of the home? Often clients are happier buying a parcel of land that is in a better location and purchasing a smaller home to stay within their budget. Which type are you?
• What are your time frames? Four months, six months, one year?
• How developed is the land in question? Will it take a time to develop it for construction? Does it have power, sewer or septic installed, or do you have a septic design already? Is there water on the site, or will you have to drill a well, or will you have local water brought to your property?
• Which options will you order? Some options increase the value of your home while others are “lifestyle choices”. Remember that banks do a pre-construction appraisal before construction begins to determine the value of the proposed project. If the buyer puts too many “lifestyle choice” options in the home, this may have a detrimental effect on the appraisal of the home and may require that you put more money into the project or change either the home plan or options. This can cause frustration on the part of all parties. Our knowledgeable sells staff can assist you to determine if the options you want will help or hinder your appraisal. We have broken them into “Helps with value” or “Lifestyle Choices”.
• Is your lot level or sloped? Sloped lots cost more in construction for concrete, pony walls, glue lams and/or beam and post construction. Sometimes up to $50,000. I encourage people to solicit a knowledgeable realtor for land purchasing. Not all realtors understand property. It is best to call the agency, talk with the broker and ask them who is best suited to handle your land purchase. This is an area where you must set aside family contacts, or a friend in the business if they are not really qualified to help you.
• Do you have unreal expectations? If you expect to have a home built in 2 or 3 months, I can say with some certainty that this is an unrealistic expectation. Framers, plumbers, roofers, electricians, and other subcontractors typically have several homes that they are working on at any one time. As a result, your home will be put on a schedule that we hope will be constructed from the day the footings are placed until you are handed the keys, to be about 150 days. Although, be aware that “owner items” or things that you are going to be responsible for, must also be accomplished within specified time frames. However, if you get you items done sooner than we anticipate (say we give you 15 days to do your exterior painting, but you finish in 2 days), that may not mean that we can always shorten our side of the schedule. Your home is scheduled from the day we pour the foundation (based upon certain criteria that we feel the average homeowner can accomplish in a given time). If we can get to it sooner, we will. Be aware that we have other clients that are having their home constructed also and everyone must wait their turn. Remember also, bigger homes with lots of upgrades can take longer than 150 days (it is really better to plan around 9 months in this case).
• Will you be out of town/state during construction? If so, we would encourage you actively putting off the ordering of your home until you will be in the general area of the project. Why? The purchaser must perform certain items or have someone hired or assigned to do them. Some companies don’t mind telling you not to worry about it and order the home. However, it is our experience that this attitude puts the company ahead of the client and will ultimately harm you in the future.
If you have any other questions, please contact your local True Built Home branch and consult with a knowledgeable home consultant. I hope that this helps you to appreciate what may be involved with the planning stages.
Are you Spontaneous?
Do you need your home right NOW!? If you have done your due diligence, studied the floor plans, know your options, then please feel free to call one of our branches that serve your area. The process will likely take less than an hour. One word of caution, though; please have a lender chosen before you order your home.
Why does True Built Home have selected lenders?
That question is perhaps one of the other most asked question from potential purchasers. Here is the reason:
Lenders have a lengthy process of approving of a builder. Here are but a few of the things they may have us do. Someone has to take the time to fill it out all the forms, produce profit and loss statements, create bios of owner(s), and submit quarterly statements. They often will pull credit of the owners or corporation. All of this is an inefficient means to operate a volume building company. What we have done is narrowed down pre-approved banks or mortgage companies that we feel are best suited for our clients and program. Some may feel that banks are giving “kickbacks” to the builder. That’s just wrong and illegal. Sometimes, the bank or mortgage company may just pay for some co-op advertisements with the expectation of referring clients, but that is all. We strive to maintain a standard of integrity that we hope protects you the borrower, and us the builder.
My experience, and I have assisted thousands of purchasers through the lending process, is that if our approved lenders cannot do the project, it is highly unlikely that anybody else can. They are just as motivated as any other lender, with one big difference. They have to answer to True Built Home if the client is not treated in a fair and timely manner. We can just take them off our list. Here is what I have seen happen time and time again. Some other builders will charge you a fee to use your own lender. This, in essence, is paying for the aforementioned items that will have to be accomplished by the builder. The borrower gets the OK to purchase or order the home. The client puts $2,500-5,000 down to lock in the price, another $1,500-2,000 for the lender fee, bringing the total to several thousands of dollars. I have seen time and time again that the lender ultimately could not do the project and now the client is out all of that money because it is non-refundable. Our aim is to put you first. When a builder will allow you to use another lender and then charges you a fee, are you really being put first? How much money are some on your lot builders making off of a “lender fee”?
Finally, a word about prices. Most HiLine Homes offices are a franchise. They have to pay money for each home sold to the mother corporation. Reality Homes is owned by three people. Lexar Home is also another franchise. At True Built Home, it is only owned by one man. What that means is, when you compare square foot prices and you say, “Wow, they are all pretty close, they must all be the same.” Wrong! Because I own the company alone, you will get a better home. Hands down, if you are buying a home from my competitors, you are throwing money in the pockets of their owners. I consider this to be the most disheartening part about this whole thing. From the front door, to our true hardwood stained trim, heat pumps, 8 lb. carpet pad, garage door opener, fixtures, and other high quality standard features – Compare, compare, compare what we offer and what they offer. You’ll be shocked at the difference.
I wish you the best, and if you want to contact me directly, feel free. I’ll answer any of your questions to the best of my ability.
Lewis D. Mann
True Built Home
“A Great Way, To a Great Home”