When a crisis strikes, it can be hard to think straight, but some of the business decisions made at the start can be the difference between your business sinking or swimming. When states began shutting down in March, CFO of Meritage Homes Hilla Sferruzza halted future land and development spending and reached out to sellers with a near-term closing to negotiate a later date. Land acquisition costs were something she could control, so once those were squared away, it opened up the company to focus on meeting the buyer where they are at: online. Now, Sferruzza says Meritage Homes is well positioned to resume its aggressive growth again. Though it is off-track timewise to meet its goal of building 300 communities, she says they will still meet that goal eventually a few quarters later.
When states began ordering people to stay home in early March, Meritage Homes CFO Hilla Sferruzza called all the land owners her company had deals pending with and asked them to hold tight. Future land and development spend is the one cost the company had absolute control over, so it was the first lever she pulled when the economy turned downwards.
"I connected with every one of our sellers with a near-term expected closing, or a near-term development deadline, and said, hey, we're all in this together. You guys don't want this, and we don't want this. Let’s pull back," Sferruzza said last week in a CFO Thought Leader podcast.
Sferruzza, who joined Meritage in 2001 and has been CFO since 2014, said the majority of sellers agreed to put the deals on hold.