Like a Walk-Through in the Park

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A final walk-through is usually tense for two reasons. For the buyer, it is often a 'speak now or forever hold your peace' situation. For the builder, it becomes a quest to minimize last-minute closing fixes.

November 01, 2000
Rigid adherence to an 81-day production schedule requires daily site inspections by Fieldstone superintendents, top. This ensures that Fieldstone's homes, like the one above, are complete at closings.

 

A final walk-through is usually tense for two reasons. For the buyer, it is often a "speak now or forever hold your peace" situation. For the builder, it becomes a quest to minimize last-minute closing fixes. Typically lost in the process is the thrill a buyer should feel of owning a new home with updated features and amenities. Such positive feelings can help spur referrals down the road.

That is why Fieldstone Communities of Newport Beach, Calif., has instituted a program designed to make the final walk-through -- one of its last contacts with buyers -- as positive as possible. Through a detailed communication plan during all phases of the construction cycle, buyer expectations are carefully managed to remove the pressure that naturally builds near closings. The goal is looser, less uptight buyers as they tour their finished homes for the first time, says Michael Varron, director of operations for Fieldstone.

"This allows us to emphasize the functionality of their home, areas that will require personal maintenance, the operational aspects and how appliances work," says Varron. "That is the purpose of the walk-through -- not for the buyer to figure out what is wrong with their house."

After more than 200 closings with its Complete on Delivery program fully implemented in a number of its regions, the company sees signs that the program will be be very successful. The company is working to institute an accurate way to measure levels of customer satisfaction with COD, but anecdotal data suggests that even tough customers have come through the process glowing.

"Our early results are that the buyers see a dramatic difference. They are almost aghast," Varron explains. "They are not looking for all of the fit-and-finish issues that are typically on their list. They are just enjoying the process."

From contract signing to closing, COD’s success hinges on building a track record of meeting deadlines laid out for the buyer at the outset. At contract signing, Fieldstone presents buyers these target dates in the company’s New Home Buyer’s Guide. At the same time, a salesperson explains the precision with which it adheres to an 81-day construction period -- from trenching to close. Several dates within the cycle are then circled on the calendar.

DAY 36: Optional framing walk with the construction superintendent. About 95% of Fieldstone’s buyers opt to take this walk-through, which allows for important first contact between the buyer and the site superintendent. The location of mechanicals, light fixtures and options are checked closely at this stage.

DAY 68: Scheduling of builder’s quality checklist walk-through with buyer present. At this point, the builder checks the home and confirms that it is ready for its quality check and invites the buyer.

DAY 71: The quality checklist walk-through. This is an opportunity to demonstrate the depth and breath of the builder’s level of detail in checking quality. The superintendent’s list is usually much longer than the buyer’s -- a detail designed to give the buyer a sense of comfort. Importantly, there is still enough time within the process to take care of outstanding issues.

DAY 78: Final walk-through. If all goes according to plan, larger issues have already been taken care of, clearing the way for a meeting focusing on features of the home, how to operate and maintain mechanical systems, etc. According to Varron, this is a time for the buyer to be impressed with how well the home has come together.

DAY 81: Close of escrow. Fieldstone previously scheduled its closings for Day 78, the same day as the final walk-through, putting further pressure on the buyer. Three days were added to give the superintendent time to correct any cosmetic issues that may remain after the final walk-through. After closing, buyers are then asked to sign a Complete on Delivery form to bring closure to the initial purchase agreement.

The key feature of the program is to front-load any and all buyer concerns to a place in the process when they can be rectified without significant alteration to the schedule, says Varron. It also provides at least two additional points in the process for pressure to be released without overly raising buyer expectations.

And while Fieldstone rigidly sticks to its 81-day building cycle, it deliberately avoids giving the buyer a specific closing date. Sales associates communicate with buyers via a construction chart posted in the sales center that specifies what will be accomplished during each working day. If a job is rained out, the cycle is re-implemented the next day where work was left off.

"We are finding that as we teach the buyers how to read the construction chart for their home, which is updated daily, they can see the delays and if they are weather-related or if there is an issue with a subcontractor or supplier," explains Varron. "They see it, and they understand it. They are in tune with the process."

Varron is quick to caution that the COD is not something any builder could simply adopt and implement. It requires a high degree of organizational discipline before roll-out. In fact, the program really just puts the finishing touches on a larger quality program the company launched a few years ago to address a prevailing industry trend toward the goal of having zero defects in all homes at closing. According to Varron, the idea of being able to ensure no defects in a home with more than 109 man-made and natural products seemed somewhat unrealistic.

"We wanted to design a program that would deliver a complete home to the buyer at close of escrow, defect-free as it relates to walk-through items," explains Varron. "We found in our initial customer satisfaction surveys that buyers in some cases were still waiting to have items finished 30 days after closing."

With that in mind, tightly monitored operations were put in place at Fieldstone in advance of the introduction of COD. Site superintendents and assistant superintendents all carry hand-held computers for updating the daily tasks of each building site. When problems arise, action is quickly taken to avert continued delay. If, for example, the window guy does not show up with a needed delivery, the problem is usually noticed right away, not three or four days later.

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