Currently Reading

Denver's Oakwood homes Consolidates Vendors


Denver's Oakwood homes Consolidates Vendors

When Denver's Oakwood Homes won the 1995 National Housing Quality Award, the company was cited for partnering relationships with manufacturers and suppliers as well as trade contractors.

By Bill Lurz, Senior Editor October 31, 1999
This article first appeared in the PB November 1999 issue of Pro Builder.
When Denver’s Oakwood Homes won the 1995 National Housing Quality award, the company was cited for partnering relationships with manufacturers and suppliers as well as trade contractors. In one sterling example, by reducing the number of trade partners and working closely with them, Oakwood cut hard costs dramatically, then passed the savings on to buyers by including concrete tile roofs as a standard item on a $120,000 house. Today, Oakwood is still pushing the envelope on value-added partnering relationships.

Oakwood president Pat Hamill recently told a Dallas meeting of building materials dealers to find ways to add value, rather than just selling materials as commodities, based solely on price.

"For example, we now have a sole supplier of lumber that was not doing any business with us three years ago. But they are not just selling us lumber. They produce fully panelized wall sections, from working drawings we produce on our Argos design software that counts and dimensions every stick. We’ve also got a trim supplier, who used to just sell us materials, who now does trim installation on everyhouse-everything from exterior doors to interior shelves, trim, and millwork," says Hamill.

In addition to concrete tile roofs, Oakwood now includes Corian countertops as a standard item in all houses. "Dupont will tell you how our use of Corian has vastly increased their market share here in Denver," says Hamill. "National manufacturers cannot do that on their own. They can only do it by partnering with a savvy and efficient builder who knows how to merchandise the value they can add to a home. We’re now expanding our use of Corian to include shower surrounds in bathrooms. Consumers see it as a much more durable and sustainable product than tile. That perceived value is what we’re looking for."

The revolution in e-commerce is something builders must watch closely over the coming months, says Hamill. "National purchasing and direct distribution may be the wave of the future, but I can always figure out how to compete with the big boys. We didn’t raise the price of our houses when we included Corian counters as standard, or rounded drywall corners, or downdraft cooktops."

Hamill believes the handwriting is on the wall for vendors in the home sale process as well as construction. "Everyone involved in producing and selling a house will have to add value commensurate with cost," he says. "And that includes Realtors."

"They’re going to take a hit on commission structure. When you look at the big public builders, who are making 2.5% to 3% profit margins, and they are still co-opping with Realtors at 3%, there’s something wrong with this picture." The risk/reward equation is out of balance. That amount of compensation might make sense if builders were making 12% margins, but they’re not.

"It’s the same as what the airlines are telling travel agents. They’re going to have to accept less or face being superceded by direct selling on the Internet," says Hamill.

Oakwood is breaking price barriers in Denver this fall with affordable detached houses at Green Valley Ranch priced from $105,000. He is cutting Realtor co-op rates as well. "That’s way below the Denver new home average price of $202,000," says Hamill. "We debated what to do about Realtor commissions, and finally put it out at 2%," he says.

"I’m getting blasted for it. But we’ve already sold 35 houses and our models are just at drywall stage. I think it’s fair."


Related Stories


University of Michigan Researchers Unveil Sustainable 3D Printing Material

Researchers from the Digital Architecture Research & Technology Laboratory at Michigan State University have developed an eco-friendly 3D printing material made from sawdust

Building Materials

Construction Materials Prices Stabilize as Supply Chains Improve

Construction input prices have posted no upward movement in five months, a relief for home builders facing increased demand for new construction


5th Annual Most Valuable Products Award Winners

The MVP Awards recognize the best in innovation, style, and efficiency across 16 building products categories


Top Articles


More in Category

COVID-19 may be easing its grip on the U.S. after a disastrous two years, but lingering supply chain disruptions have builders holding onto their pandemic business tactics

An archive of NHQA-winning companies that represent home building's best in Total Quality Management

Don’t let the current hype about single-family B2R communities obscure the need to create long-term sustainability and asset value


Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.

Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.