Builder- Broker Partnership

A longstanding, profitable partnership with a real estate firm helps solidify Barone’s reputation as the customer satisfaction leader in the Rochester, N.Y., area and now, nationally.

By Meghan Stromberg, Senior Editor | August 31, 2003
Barone Homes teams with a real estate firm to deliver superior customer satisfaction.


Brothers Barry and Joe Barone would say that awarding Barone Homes with the NRS Diamond Award for custom builders recognizes more than 20 years of hard work. They also would say they make up only half of the story. A longstanding, profitable partnership with a real estate firm helps solidify Barone's reputation as the customer satisfaction leader in the Rochester, N.Y., area and now, nationally.

While the Barone brothers manage the construction process, David Paine and Jeff Pastorella, owners of Century 21 Premier Properties, essentially manage the customers. "We've been together 15 years, so everybody knows what everybody is supposed to be doing, and we all know our weaknesses and strengths," Pastorella says.

With Premier's help, Barone Homes constructed more than 500 homes in the past 20 years, frequently building more than one home for the same buyer. "It's a total team effort, and it's advantageous to both parties," Barry Barone says. "Dave and Jeff have sold some of our homes three times."

Top Five Difference-Makers
  1. Time taken to correct walk-through items: 68.00 (average: 57.77)
  2. Projected closing date versus actual closing date: 100.00 (average: 91.02)
  3. Home was clean for review/walk-through: 94.00 (average: 85.43)
  4. Provided sufficient number of upgrades and colors: 93.00 (average: 87.60)
  5. Cabinets: 94.00 (average: 89.05)

The relationship works so well - and so seamlessly - for several reasons. Unlike other builder/broker relationships in the Rochester market, each company works with the other exclusively on new homes, eliminating conflict of interest. Barone Homes, which pays Premier Properties a commission based on the home's price, accounts for about 70% of Premier's volume. The remainder comes from resales of existing homes. Buyers frequently list their existing home with Premier as they work with it to plan their new Barone home.

More important, having Paine and Pastorella take care of sales and customer management frees the Barones to do what they do best: Build homes. One of the brothers is on site every day, with Barry heading the front end of construction, from start to rough, and Joe managing everything from drywall on.

In the typical custom home building operation at Barone's annual volume - 30-40 homes, ranging from $175,000 to $500,000 - customer selections, daily concerns and just plain hand holding often take up as much of the builder's time as managing subcontractors. Barry Barone says some customers call three or four times a day, and the brothers can't field all those calls. But their partners, can call back in a half-hour, keeping customers informed and easing anxiety.

Pastorella says a handful of buyers want to work directly with the builder, thinking they'll get a better deal and more attention, but most do the math and see that their dedicated sales agent spends much more time with them than their builder ever could. In the selections process alone, Premier might spend several hours a week visiting showrooms with buyers and picking from Barone's in-house samples. Paine or Pastorella attends every meeting with the buyer, partly to reinforce the commitment to personal attention and customer satisfaction but also to provide continuity.

NRS Award:
Barone Homes
Headquarters: Webster, N.Y.
Communities: 4
Product: Detached single-family homes priced from $175,000 to $500,000
2002 closings: 32
2002 revenue: $8 million
Employees: 7
Chief executive: Barry Barone

Award classification: Custom builder
NRS Index score: 186.74
Homeowner satisfaction: 87.74
Recommend scaled score: 99.00

100% of homeowners "would recommend."
89% had made at least 1 positive recommendation.
11% had made 1-3 referrals.
56% had made 4-6 referrals.
0% had made 7-9 referrals.
22% had made 10 or more referrals.
Average referrals per surveyed customer: 5.15
Expectation difference: 6.0 (current satisfaction minus expected satisfaction)

Barry and Joe Barone work with the buyers and the designer or architect in the design phase, plan review and on any structural changes. They also take buyers on three planned walks of the home - mechanical, drywall and finish. In the mechanical walk, which actually occurs before the mechanicals are in, Barone Homes wants buyers to get a feel for the spaces in the home and visualize themselves living in it. Only then do buyers decide where electrical outlets, light fixtures, fans and even the air-conditioning unit and furnace will go.


Quality Culture

Barry Barone says delivering quality has more to do with culture than any procedure. While Barone Homes' unique take on customer handling guarantees a quality experience, its owners recognize that quality construction reverberates just as strongly. The Barones have ultimate responsibility for a solid, well-built home, but like all but the smallest-volume builders, they rely on subs to do most of the work. They have crafted a culture that values and respects the trades. As a result, subcontractor tenure averages 15 years, and all subs seem to share the same fierce devotion to quality.

"Barry and Joe also don't cry wolf," Paine says. "They don't tell the sub they need to have something done on Friday or Saturday unless it really needs to be done. The subs appreciate that, and they realize that in a normal course of business, they have plenty of time to do their job Monday through Friday."

By sticking to schedules and closing on time, Barone earned a 100% customer rating in that department in the NRS survey. At production meetings every Monday morning, the team goes through the construction schedule, paying specific attention to anything that might affect a starting or closing date. The group takes closing dates seriously and rarely misses one, Paine says. "People make commitments to move their children, start kids in school, line up movers, take time off from work," says Paine. "If things don't happen like the customer planned, that doesn't work."

Punchlists are short and handled within days, but 75% of the homes close 100% complete, with most outstanding items - an unseeded lawn, exterior paint touch-ups or an unfinished driveway - caused by the upstate New York weather. For warranty issues, buyers go to Barone's Web site and submit an online form detailing the problem, so Barone often brings the tools or subs needed to fix the problem on the first visit.

Barone scored highly in the NRS survey when it comes to a clean home, probably because it insists on an immaculate job site, even if workers are just moving dirt. The reason is simple: Buyers associate neatness and cleanliness with quality. "If you keep the job site clean, the customer assumes you are very particular about how you do your work," Barry Barone says. "If they see trash and food wrappers all over the place, they make the assumption that you're not. Frankly, I'd have to agree with the customer."

The team concept that rules the Barone operation doesn't stop with the close ties to Premier Properties and the trades. The Barone brothers show a strong allegiance to their suppliers. They know that if trucks show up late, their schedule goes out the window. In return for excellent service and reliable delivery, the Barones don't supplier-hop. If a product isn't working out, the builder and supplier work together to find a solution and maintain the relationship.

The company also includes as standard what many in its market would consider upgrades: insulated steel garage doors, Andersen windows with low-E glass, 50-year-warranty siding and a 25-year-warranty roof, raised-panel cabinets and blacktop driveways. The company has considered lowering its standards to build more houses, but the discussion always ends the same way: Quality beats low price every time.

"We don't want to build all the houses in Rochester," Barry Barone says. "We want to build homes for some very discriminating, very particular people who like our communities and expect top quality. Our goal isn't to be the lowest-cost builder. We want to deliver a top-quality, trouble-free home that people have pride and confidence in. That's the market we choose to stay with."

Barone Homes
Wow Factor/Relationship Value - sales rep in contact with buyer two to four times daily; Barone often brings the tools and trades necessary to fix warranty issues on first visit; immaculate job sites; outstanding standard features (insulated steel garage doors, etc.)
Relationship Value - Premier Properties spends several hours a week with buyers during options selection process
Smooth Transition/Relationship Value - Barone brothers attend every meeting with buyers and conduct every walk-through


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