We put together a Youtube playlist with videos from our modular home set in Carpinteria, California. See it the video here:
youtube.com link:
http://www.youtube.com/view_play_list?p=D71A85CA7909D3A0
Monday, June 13, 2011
Organizing plans by type and not factory
Over the last few years we have struggled like a lot of modular builders with unstable factories that frankly kept going out of business. To say the least, this is one of the worst things that could possibly happen mid-project. We were fortunate to complete all of our projects prior to any major corporate shake-ups at the factories, but I have several contacts in the modular building industry that were not so fortunate. We feel blessed that we were able to deliver on every contract as promised despite the stormy market conditions.
As the Great Recession grew longer and longer (on our 5th year now in California), we cleaned up our supplier list and stopped working with any factory that wasn't financially stable. If a factory is stable and have a great product, a service department that you can count on, and there is a strong will to exceed the client's expectations then we will offer their product. Without all of those conditions being met we decided we are not going to take any unnecessary risks with our client's project and money.
In serving our clients seeking custom designed projects, it became more clear that the clients do not care about the factory to start off with. Clients looking for a modular home are looking to find a plan first. Period. Once the client has identified a plan they like, they want to identify the company that they will be working with and later on who the manufacturing sub-contractor will be. Most modular home company's that build with several factories organize their websites by the manufacturer's brand name, which benefits no one. The client's don't know the difference between each factory and aren't going to learn it looking at the distributor's website.
So, being a company that has no problem changing directions when it makes sense, and also being a company that go their website hacked and had to redesign the site using newer high security design and management software (Joomla), we decided to make the change with our redesign. Since we launched the site in its current form about 6 months ago we have been retaining a much higher percentage of our client's because the site is intuitive. Its a simple thing but it has made a big difference in serving potential client's in the way that they think and then following up with more information and specifications about the factory that we plan to use to build their home with the specifications at the time of a formal proposal when that information becomes relevant.
Take a look at www.cuttingedgehomes.net/plan-collections.php
As the Great Recession grew longer and longer (on our 5th year now in California), we cleaned up our supplier list and stopped working with any factory that wasn't financially stable. If a factory is stable and have a great product, a service department that you can count on, and there is a strong will to exceed the client's expectations then we will offer their product. Without all of those conditions being met we decided we are not going to take any unnecessary risks with our client's project and money.
In serving our clients seeking custom designed projects, it became more clear that the clients do not care about the factory to start off with. Clients looking for a modular home are looking to find a plan first. Period. Once the client has identified a plan they like, they want to identify the company that they will be working with and later on who the manufacturing sub-contractor will be. Most modular home company's that build with several factories organize their websites by the manufacturer's brand name, which benefits no one. The client's don't know the difference between each factory and aren't going to learn it looking at the distributor's website.
So, being a company that has no problem changing directions when it makes sense, and also being a company that go their website hacked and had to redesign the site using newer high security design and management software (Joomla), we decided to make the change with our redesign. Since we launched the site in its current form about 6 months ago we have been retaining a much higher percentage of our client's because the site is intuitive. Its a simple thing but it has made a big difference in serving potential client's in the way that they think and then following up with more information and specifications about the factory that we plan to use to build their home with the specifications at the time of a formal proposal when that information becomes relevant.
Take a look at www.cuttingedgehomes.net/plan-collections.php
Tuesday, November 30, 2010
Working on our new website
Our website was hacked approximately two weeks ago, an experience I would recommend to no one. The vulnerability was a result of old database code that was exposed by sophisticated hackers running a script that overloaded our server and made defacing our site a fun thing to do for anyone on their hacker message board.
It was only our images, video, and content pages that were unsecured, as we keep all client and project information in secure off-line storage, but there was real damage done to our website presentation. We were forced to start again from scratch rather than try to de-bug a buggy old site, a reorganizing of all of the content we have worked since 2004 to build up.
I have been working 6-8 hours a day in addition to my normal work trying to get our new fancier and more secure site up. Like most re-dos of your work, we believe that this revision will result in a better website. Having our old site had meant continuing to do things in the old format we developed, whereas now we really could start fresh from nothing without roadblocks.
When we considered what website development technology to use, the most important criteria after our recent hacker-trauma was security so we don't have to go through this ever again. We chose the most sophisticated open-source website management tools that both have flexibility to do cool stuff, and also are continuously developed so that they are secure. We can thank the large open-source development community for the technology, and since my last attempt to develop an open-source website 6 years ago the technology has come a long way. While I have to admit to knowing more than I did in 2004, it is simply much more user friendly and easier because of all of the hard work that has gone into open-source content development. Most web users will never dig into the back-end of how sites are developed but I can assure you that there are lots of hard-working people out there developing sites and contributing to free content to make the web an easier place to work in and browse.
We have taken a two-track approach. First we started our coding team developing our new back-end features. Secondly, we have a temporary site we are actively assembling where the content for the new site goes first and then is integrated into the new site design once it is organized roughly the way we want it. This gives us a chance to ensure we have all relevant, updated content on the new site that is organized and presented the way we want it before we go live with our finished new site.
Based on the questions and comments of visitors to our site, we realized that the way our plans had to be navigated (like almost every one of our competitors) was confusing. Grouping plans by modular home manufacturer rather than style and size does not match how people think. Most visitors don't care about the manufacturer, they care about the plan they want and then they build it based on the budget they have which allows them a certain level of specifications. Picking a facility to manufacture the home comes later. So, we deleted our collections that presented our plans by manufacturer and are now presenting our plans by style and size groupings as appropriate. We believe that this will be more intuitive to our site visitors. Once we match up the right plan to our visitor, we can then work to match the appropriate manufacturer to our potential client, given consideration of factors include location, budget, architectural features that work with a particular factory, and lots of other criteria.
While cuttingedgehomes.net is not planned to be an social networking site, there are lots of social features that can be used to find out more about what our visitors want and give a better experience. Some are simple and unnoticeable, others like an "email this" feature or an automated "PDF" feature on every page just make things easier to take off-line for some people to share or study our plans and information. Others you see more obviously like the polls we now have on some pages, and we plan to have more polls soon targeted to different types of content. We have struggled with whether or not to include a ranking feature on our plans, and have settled on working to include it once we have gotten the rest of our site in order so we can make sure that it is used constructively. We are really at the tip of the iceberg but the tip of the iceberg is already very cool when compared to our old site and most of the competition we have.
Rather than farming out all of the development work, we have chosen to do the site development more methodically and to be intimately involved. The last thing I want is to have a developer put together a whole site and then come back and it not make sense for our clients and our business. Although Chris says I am spending maybe too much time on the new site, I feel in 2010 there is no more important place for management to focus energy than into how we communicate with our customers, and for a business like ours it is undoubtedly through our site.
Please let me know if there are any thoughts you have on our new modular homes and panelized homes website via our contact form on the site or through comments to this blog post.
Regards,
Isaac Lassiter
General Manager
Cutting Edge Homes Inc.
It was only our images, video, and content pages that were unsecured, as we keep all client and project information in secure off-line storage, but there was real damage done to our website presentation. We were forced to start again from scratch rather than try to de-bug a buggy old site, a reorganizing of all of the content we have worked since 2004 to build up.
I have been working 6-8 hours a day in addition to my normal work trying to get our new fancier and more secure site up. Like most re-dos of your work, we believe that this revision will result in a better website. Having our old site had meant continuing to do things in the old format we developed, whereas now we really could start fresh from nothing without roadblocks.
When we considered what website development technology to use, the most important criteria after our recent hacker-trauma was security so we don't have to go through this ever again. We chose the most sophisticated open-source website management tools that both have flexibility to do cool stuff, and also are continuously developed so that they are secure. We can thank the large open-source development community for the technology, and since my last attempt to develop an open-source website 6 years ago the technology has come a long way. While I have to admit to knowing more than I did in 2004, it is simply much more user friendly and easier because of all of the hard work that has gone into open-source content development. Most web users will never dig into the back-end of how sites are developed but I can assure you that there are lots of hard-working people out there developing sites and contributing to free content to make the web an easier place to work in and browse.
We have taken a two-track approach. First we started our coding team developing our new back-end features. Secondly, we have a temporary site we are actively assembling where the content for the new site goes first and then is integrated into the new site design once it is organized roughly the way we want it. This gives us a chance to ensure we have all relevant, updated content on the new site that is organized and presented the way we want it before we go live with our finished new site.
Based on the questions and comments of visitors to our site, we realized that the way our plans had to be navigated (like almost every one of our competitors) was confusing. Grouping plans by modular home manufacturer rather than style and size does not match how people think. Most visitors don't care about the manufacturer, they care about the plan they want and then they build it based on the budget they have which allows them a certain level of specifications. Picking a facility to manufacture the home comes later. So, we deleted our collections that presented our plans by manufacturer and are now presenting our plans by style and size groupings as appropriate. We believe that this will be more intuitive to our site visitors. Once we match up the right plan to our visitor, we can then work to match the appropriate manufacturer to our potential client, given consideration of factors include location, budget, architectural features that work with a particular factory, and lots of other criteria.
While cuttingedgehomes.net is not planned to be an social networking site, there are lots of social features that can be used to find out more about what our visitors want and give a better experience. Some are simple and unnoticeable, others like an "email this" feature or an automated "PDF" feature on every page just make things easier to take off-line for some people to share or study our plans and information. Others you see more obviously like the polls we now have on some pages, and we plan to have more polls soon targeted to different types of content. We have struggled with whether or not to include a ranking feature on our plans, and have settled on working to include it once we have gotten the rest of our site in order so we can make sure that it is used constructively. We are really at the tip of the iceberg but the tip of the iceberg is already very cool when compared to our old site and most of the competition we have.
Rather than farming out all of the development work, we have chosen to do the site development more methodically and to be intimately involved. The last thing I want is to have a developer put together a whole site and then come back and it not make sense for our clients and our business. Although Chris says I am spending maybe too much time on the new site, I feel in 2010 there is no more important place for management to focus energy than into how we communicate with our customers, and for a business like ours it is undoubtedly through our site.
Please let me know if there are any thoughts you have on our new modular homes and panelized homes website via our contact form on the site or through comments to this blog post.
Regards,
Isaac Lassiter
General Manager
Cutting Edge Homes Inc.
Tuesday, October 12, 2010
Interview with Park51 (NYC Muslim Comm. Center) Architect
This came across my desktop today from the "Engineering Dispatch" article digest that I read. While it has nothing to do with this blog's general line of discussion, it does speak to something critical that the American public misses when it considers development and construction projects: The actual background of the project versus the sound-bites that are for or against it. Judging projects by hearsay of not-involved parties (pundits and reporters) does not inform you as to the relevance and reason of a project. The more we seek out information from involved parties, the better informed we are and the more our mind is able to empathize or reject that party's view, depending on the merits.
http://www.dispatchmarketinginc.com/eReports/EngineeringDispatch/RECORDspeakswiththearchitecturefirmbehindth/tabid/3601/Default.aspx
Here are a few quotes that I felt were interesting:
"AP: Can you tell me about the materials? What is the motivation behind having them so ultra-modern?
MA: Glass reinforced concrete. The whole point is that it's as delicate as lace but structurally as sound as concrete. It's a natural material we use in actual Mashrabiya in any country that has those types of things. You can get extremely thin with that. We haven't done the actual engineering of the facade yet so we don’t know how thin these elements are going to be, because some of them are pretty bulky, but the idea is that some of them will become pretty thin. It's a double skin. You can see in terms of the interior program, you can see we tried to keep it as open as possible.
So if you go in terms of program, the only religious component is really the Muslim prayer space — and we’re not calling it a mosque, because it’s really not a mosque. A mosque has very clear typology, with an open plaza, a minaret, and you’re never going to see these things – probably ever – [in New York], but definitely not in this building. It’s called a prayer space, on two lower levels, below the ground floor, so basically the first two basements. Obviously they’re split between female and male. Everything above the ground floor will be secular architecture, for secular programming. You have restaurants, child care facilities, culinary school, sports center with basketball courts, a pool, a media tech library, auditorium, then you have the offices, administration, different types of workshops, even live-work spaces for artists, for guest artists, a little like Villa de Medici. Some sort of relation with what the culture is, the cultures we’re trying to join in this project."
-------------------------------------
"AP: 2,000 people – is that the capacity in the basements?
MA: Yes. It needed to be easily accessible from the street with different routes, different security check-ins than the rest of the building, so you don’t go through the main core of the building. Also, to better separate any type of religious program from the rest. You have to keep in mind - I’m saying this from an observer point of view, because I’m not a Muslim – I had to observe the way things worked out for Muslims in New York City who need to pray five times a day. How do you cut off your workday to go five times a day? So you need to be able to go in and out pretty fast, you can’t spend an hour to go in and another hour to go out."
-------------------------------------
"I'm 33. That's the whole point. Even the developer is young. The developer is 37. We have 50-year-old people, and we have 26-year-old people. It's like any other office, we just like to do our projects a little differently, and what better office structure to have to work on such a project? For example, I'm Catholic, so that shows that it's not an Islamic firm, that it's not all Muslims. For us, it's about joining cultural differences into one project. You’ve got a developer who's Egyptian, who's from a Polish Catholic mother, who goes to a Jewish community center, an architect who has citizenships from France, and Mexico—French and Mexican and Lebanese at the same time, so it's a mix of a cultures, isn't that the whole point of this project?"
-------------------------------------
"So we went back to really some of the most ancient traditional elements, internationally — even though we're so aware it's been done before, by other architects, namely by Jean Nouvel — taking the Islamic motif and converting it into some sort of facade. In our case it was a little more than that. It was going back to the very essence to what makes Islamic architecture recognizable, and if you go back to history there's a single motif, the Mashrabiya, the sun screen really, using abstract representations, very elaborate arabesques, and turn that motif into some sort of a map to create the facade. A map that would, through several manipulations and articulations, respond to the interior program."
http://www.dispatchmarketinginc.com/eReports/EngineeringDispatch/RECORDspeakswiththearchitecturefirmbehindth/tabid/3601/Default.aspx
Here are a few quotes that I felt were interesting:
"AP: Can you tell me about the materials? What is the motivation behind having them so ultra-modern?
MA: Glass reinforced concrete. The whole point is that it's as delicate as lace but structurally as sound as concrete. It's a natural material we use in actual Mashrabiya in any country that has those types of things. You can get extremely thin with that. We haven't done the actual engineering of the facade yet so we don’t know how thin these elements are going to be, because some of them are pretty bulky, but the idea is that some of them will become pretty thin. It's a double skin. You can see in terms of the interior program, you can see we tried to keep it as open as possible.
So if you go in terms of program, the only religious component is really the Muslim prayer space — and we’re not calling it a mosque, because it’s really not a mosque. A mosque has very clear typology, with an open plaza, a minaret, and you’re never going to see these things – probably ever – [in New York], but definitely not in this building. It’s called a prayer space, on two lower levels, below the ground floor, so basically the first two basements. Obviously they’re split between female and male. Everything above the ground floor will be secular architecture, for secular programming. You have restaurants, child care facilities, culinary school, sports center with basketball courts, a pool, a media tech library, auditorium, then you have the offices, administration, different types of workshops, even live-work spaces for artists, for guest artists, a little like Villa de Medici. Some sort of relation with what the culture is, the cultures we’re trying to join in this project."
-------------------------------------
"AP: 2,000 people – is that the capacity in the basements?
MA: Yes. It needed to be easily accessible from the street with different routes, different security check-ins than the rest of the building, so you don’t go through the main core of the building. Also, to better separate any type of religious program from the rest. You have to keep in mind - I’m saying this from an observer point of view, because I’m not a Muslim – I had to observe the way things worked out for Muslims in New York City who need to pray five times a day. How do you cut off your workday to go five times a day? So you need to be able to go in and out pretty fast, you can’t spend an hour to go in and another hour to go out."
-------------------------------------
"I'm 33. That's the whole point. Even the developer is young. The developer is 37. We have 50-year-old people, and we have 26-year-old people. It's like any other office, we just like to do our projects a little differently, and what better office structure to have to work on such a project? For example, I'm Catholic, so that shows that it's not an Islamic firm, that it's not all Muslims. For us, it's about joining cultural differences into one project. You’ve got a developer who's Egyptian, who's from a Polish Catholic mother, who goes to a Jewish community center, an architect who has citizenships from France, and Mexico—French and Mexican and Lebanese at the same time, so it's a mix of a cultures, isn't that the whole point of this project?"
-------------------------------------
"So we went back to really some of the most ancient traditional elements, internationally — even though we're so aware it's been done before, by other architects, namely by Jean Nouvel — taking the Islamic motif and converting it into some sort of facade. In our case it was a little more than that. It was going back to the very essence to what makes Islamic architecture recognizable, and if you go back to history there's a single motif, the Mashrabiya, the sun screen really, using abstract representations, very elaborate arabesques, and turn that motif into some sort of a map to create the facade. A map that would, through several manipulations and articulations, respond to the interior program."
Tuesday, September 28, 2010
California Green Building Code Mandatory as of 1/1/2011
We can say thank you to the Governator, Arnold Schwarzenegger, that starting on 1/1/2011 there will be a new mandatory green building code in California called "Cal Green". While the Cal Green code is not a revision of the entire building code, it affects the implementation of all areas of the code and is a new "book" for the stakeholders to learn, and for owners and contractors to perform to. Like most other California code revisions, it is expected to be copied and modeled after over the coming period in other parts of the country as we move from optional green building standards managed by non-governmental agencies and non-profits to mandatory standards in most states.
California is a fluid building environment and that fluidity is ironic considering the highly structured nature of the building code and local building regulations. This fluidity comes from the myriad or risks and responses created when you have almost 37 million people living in one state, overzealous health and safety officials and a myriad of other layers of state and local enforcement, and contractors and owners making conservative interpretations of the codes.
Commercial construction has widely adopted the USGBC's LEED standard when mandated by the cities or required by project developers who are staying competitive in their markets, but most residential construction is not completed to a green building standard.
It is not that there are not residential green building standards, it is because there are too many of them, and the market does not have a clear incentive to use one. Green building standards have multiplied to the point where it is too diluted for residential consumers to understand the differences between the prohibitively strict LEED for Homes program versus the more laissez faire home builder's association National Green Building Standard. For an recent and extensive comparison of green building standards and their implementation across the country, see Alicia J. Miller's thesis here.
When private industry self-regulates a market will form and that market will eventually become competitive. In the case of standards competing in the free market the consumer loses confidence that private groups are being fair intermediaries of the green building standards between consumers and the businesses that do the development work. Even the so-called "non-profit" companies that run green standards are funded by the memberships of private businesses, many of which are only members because of the presumed economic benefit to their firms.
Only government's prescriptive control of standards can flush out the consumer confusion of the diverging standards by getting rid the market for their product, an over-supply of standards. By its nature, that regulation will both get rid of the best and worst types of private label green building codes with standardization as the result.
If you want help learning more about the CalGreen code or building in California using one of our building systems, please contact us or visit our green building modular homes site.
California is a fluid building environment and that fluidity is ironic considering the highly structured nature of the building code and local building regulations. This fluidity comes from the myriad or risks and responses created when you have almost 37 million people living in one state, overzealous health and safety officials and a myriad of other layers of state and local enforcement, and contractors and owners making conservative interpretations of the codes.
Commercial construction has widely adopted the USGBC's LEED standard when mandated by the cities or required by project developers who are staying competitive in their markets, but most residential construction is not completed to a green building standard.
It is not that there are not residential green building standards, it is because there are too many of them, and the market does not have a clear incentive to use one. Green building standards have multiplied to the point where it is too diluted for residential consumers to understand the differences between the prohibitively strict LEED for Homes program versus the more laissez faire home builder's association National Green Building Standard. For an recent and extensive comparison of green building standards and their implementation across the country, see Alicia J. Miller's thesis here.
When private industry self-regulates a market will form and that market will eventually become competitive. In the case of standards competing in the free market the consumer loses confidence that private groups are being fair intermediaries of the green building standards between consumers and the businesses that do the development work. Even the so-called "non-profit" companies that run green standards are funded by the memberships of private businesses, many of which are only members because of the presumed economic benefit to their firms.
Only government's prescriptive control of standards can flush out the consumer confusion of the diverging standards by getting rid the market for their product, an over-supply of standards. By its nature, that regulation will both get rid of the best and worst types of private label green building codes with standardization as the result.
If you want help learning more about the CalGreen code or building in California using one of our building systems, please contact us or visit our green building modular homes site.
Tuesday, September 21, 2010
10 Strategies For Improving Your Chances of Getting a Fair Appraisal
The lack of motivated buyers makes getting an appraisal with a high enough valuation to match up with builder's expenses and a reasonable profit almost impossible to accomplish. This list of things to do when seeking a fair appraisal is critical reading if you want to get to the end goal of buyers, builders, lenders, and all of the other project stakeholders. We all want the same thing: TO ACTUALLY BUILD SOMETHING!
http://www.builderonline.com/business/10-strategies-for-improving-your-chances-of-getting-a-fair-appraisal.aspx?cid=BLDR100921002
"1. Don’t be afraid to talk to the appraiser. “Communicate, communicate, communicate,” Mitchell asserted. “Last year, at this time, we were 180 degrees from here. We were told not to communicate, not to have any contact” under the new rules, but that has changed as the guidelines have been implemented. Builders “can’t ask for certain numbers to be targeted [in the appraisal], but they can communicate in a lot of different ways” with an appraiser.
2. Supply all potentially relevant data. “Basically, you can provide almost anything that you can think of that is going to support the value of the house,” Mitchell said. This can include information on the market and absorptions as well as property specifications, home plans, and product details for the home or project in question. You may also want to give the appraiser copies of recent HUD-1 statements if they aren’t in the land records yet or examples of recently executed contracts. Allen W. Gardiner, who provided the appraiser perspective on the NAHB/Builder Partnerships webinar, agreed. “One of the biggest mistakes I find is that builders hide data,” said Gardiner, who is vice president of residential at Jackson Claborn, a Plano, Texas-based real estate consulting and appraisal firm. “I would encourage you to provide all relevant data. If it was a low sale, let [the appraiser] know and explain how it is different from the others.”
3. Make note of all communication (written or spoken) with an appraiser. “Contact the lender immediately” if you have concerns about an appraiser’s experience or expertise, according to Gardiner.
4. Be realistic about distressed sales being used as comps. “If an entire market is made up of short sales and foreclosures and all the listings out there are also short sales and foreclosures, that may be representative of what the market is today,” Gardiner said. “On the flip side, if you are in a market that is improving or stabilizing and there are still some short sales out there, that doesn’t necessarily mean [distressed sales are] what is driving the market.”
5. Warn buyers that extreme options may not appraise at their value and protect your interests accordingly. “If you’ve got someone stepping out of the norm, then you absolutely as a builders should have concerns about that,” said Mitchell, who advises warning a customer that such upgrades may result in a problematic appraisal. If the buyer insists, then Mitchell’s firm will do so—with a condition. “If you still want those items in the house, then we have to have an addendum to the contract that says you acknowledge that this house will likely not appraise for what the cost of this house is that we have contracted [to build for you] and that [a low appraisal] is not a valid reason for [the buyer] to void the contract or ask to have the price reduced.”
6. Request a copy of appraisal. You’ll need to request this from the lender, but “usually a good lender will release that appraisal for you,” Mitchell said. Once you receive it, review the document for errors and accuracy. Ask for the criteria and comps used in determining the value, which can vary from lender to lender. For example, a bank may want comps located within a certain distance of the property or comps from certain number of sales within the past 90 days, a competing builder, or even a listing or a pending sale, according to Gardiner.
7. If getting an appraisal on a green home, provide the appraiser with the net present value of the savings projected due to the energy-efficient features in the house. The NAHB says its members have been successful at getting those values incorporated into some new-home appraisals. But green builders—and their buyers--should probably brace themselves for some unpleasant surprises. “I think you’re really limited in today’s market to those things that create savings on the energy bill,” Mitchell said in response to a questioner. “Unfortunately, I don’t know of any way to value sustainability. That is a much more difficult process.” Gardiner agreed. Despite the growing interest in green building and energy efficiency among many consumers, “we don’t see much of a premium for those items” in the resale home market, he said.
8. Adjust your expectations for the appraisal based on the lender involved. “A national bank using an appraisal management company is going to be way more restrictive than a local bank in terms of its guideline for its appraisals,” Gardiner warns.
9. Be prepared to encounter worst-case scenarios. “We’ve heard about lenders requesting liquidation value [on appraisals]—not allowing for buildout value or ‘highest and best use’ value,” Mitchell warned. If you do, let NAHB know by emailing the organization at appraisals@nahb.org.
10. If you’re doing a workout, find out everything you can about the health of your lender and whether they have flexibility to work with you. Tell them your cost of capital. Find out how they plan to classify the loan so you can provide appropriate data to lenders and appraisers. Detail how you will handle the project so that the buildout value will be greater than the liquidation value. “All of these things will help you create a workout plan that works for the lender” and improve your chances of getting the deal done, Mitchell said."
http://www.builderonline.com/business/10-strategies-for-improving-your-chances-of-getting-a-fair-appraisal.aspx?cid=BLDR100921002
"1. Don’t be afraid to talk to the appraiser. “Communicate, communicate, communicate,” Mitchell asserted. “Last year, at this time, we were 180 degrees from here. We were told not to communicate, not to have any contact” under the new rules, but that has changed as the guidelines have been implemented. Builders “can’t ask for certain numbers to be targeted [in the appraisal], but they can communicate in a lot of different ways” with an appraiser.
2. Supply all potentially relevant data. “Basically, you can provide almost anything that you can think of that is going to support the value of the house,” Mitchell said. This can include information on the market and absorptions as well as property specifications, home plans, and product details for the home or project in question. You may also want to give the appraiser copies of recent HUD-1 statements if they aren’t in the land records yet or examples of recently executed contracts. Allen W. Gardiner, who provided the appraiser perspective on the NAHB/Builder Partnerships webinar, agreed. “One of the biggest mistakes I find is that builders hide data,” said Gardiner, who is vice president of residential at Jackson Claborn, a Plano, Texas-based real estate consulting and appraisal firm. “I would encourage you to provide all relevant data. If it was a low sale, let [the appraiser] know and explain how it is different from the others.”
3. Make note of all communication (written or spoken) with an appraiser. “Contact the lender immediately” if you have concerns about an appraiser’s experience or expertise, according to Gardiner.
4. Be realistic about distressed sales being used as comps. “If an entire market is made up of short sales and foreclosures and all the listings out there are also short sales and foreclosures, that may be representative of what the market is today,” Gardiner said. “On the flip side, if you are in a market that is improving or stabilizing and there are still some short sales out there, that doesn’t necessarily mean [distressed sales are] what is driving the market.”
5. Warn buyers that extreme options may not appraise at their value and protect your interests accordingly. “If you’ve got someone stepping out of the norm, then you absolutely as a builders should have concerns about that,” said Mitchell, who advises warning a customer that such upgrades may result in a problematic appraisal. If the buyer insists, then Mitchell’s firm will do so—with a condition. “If you still want those items in the house, then we have to have an addendum to the contract that says you acknowledge that this house will likely not appraise for what the cost of this house is that we have contracted [to build for you] and that [a low appraisal] is not a valid reason for [the buyer] to void the contract or ask to have the price reduced.”
6. Request a copy of appraisal. You’ll need to request this from the lender, but “usually a good lender will release that appraisal for you,” Mitchell said. Once you receive it, review the document for errors and accuracy. Ask for the criteria and comps used in determining the value, which can vary from lender to lender. For example, a bank may want comps located within a certain distance of the property or comps from certain number of sales within the past 90 days, a competing builder, or even a listing or a pending sale, according to Gardiner.
7. If getting an appraisal on a green home, provide the appraiser with the net present value of the savings projected due to the energy-efficient features in the house. The NAHB says its members have been successful at getting those values incorporated into some new-home appraisals. But green builders—and their buyers--should probably brace themselves for some unpleasant surprises. “I think you’re really limited in today’s market to those things that create savings on the energy bill,” Mitchell said in response to a questioner. “Unfortunately, I don’t know of any way to value sustainability. That is a much more difficult process.” Gardiner agreed. Despite the growing interest in green building and energy efficiency among many consumers, “we don’t see much of a premium for those items” in the resale home market, he said.
8. Adjust your expectations for the appraisal based on the lender involved. “A national bank using an appraisal management company is going to be way more restrictive than a local bank in terms of its guideline for its appraisals,” Gardiner warns.
9. Be prepared to encounter worst-case scenarios. “We’ve heard about lenders requesting liquidation value [on appraisals]—not allowing for buildout value or ‘highest and best use’ value,” Mitchell warned. If you do, let NAHB know by emailing the organization at appraisals@nahb.org.
10. If you’re doing a workout, find out everything you can about the health of your lender and whether they have flexibility to work with you. Tell them your cost of capital. Find out how they plan to classify the loan so you can provide appropriate data to lenders and appraisers. Detail how you will handle the project so that the buildout value will be greater than the liquidation value. “All of these things will help you create a workout plan that works for the lender” and improve your chances of getting the deal done, Mitchell said."
Thursday, August 26, 2010
Exporting Prefab Homes - Chile and Haiti
During the last several years the systems for transporting and installing panelized homes, prefab homes, and kit homes have developed to the point that there is a highly competitive international market for selling prefabricated building systems.
Companies from Russia, Europe, China, and the US vie for business for large social projects, as affordable housing for temporary workers at large hospitality and infrastructure construction projects, and as shelters for remote outposts of all kinds.
In addition to prefab housing and prefab building projects that are part of long-term government planning or long-term private business development, there have been many natural disasters that have wiped out a large swath of housing stock and quickly created a market for the international trade in export prefab packages. In 2010, Haiti and Chile's earthquakes have been the major international markets for new construction created by natural disaster.
Our company has been involved in the process of proposing our prefab systems to clients and government in both countries. It has been striking to see the difference in the two.
Haitian projects typically come with limited information and require a lot of creative assumptions to allow for a healthy and detailed proposal to be generated by our company. I do not believe that any of the projects we have bid have either been awarded or started yet, as of 8/27/10. To my knowledge, the only projects that have started in Haiti are small private jobs, typically funded by speculative prefab factories or church and community groups rebuilding the social and religious buildings in Haiti like schools, orphanages, and churches. I do not have any experience to report on the type of construction and development companies from Haiti, but I can tell you that the larger companies that we have met have all been non-Haitian companies hired by outside NGOs to manage work there. These companies must have Haitian sub-contractors, and workers, in Haiti, but these outside groups appear to be the ones managing the projects because of Haiti's limited construction and development experience.
Chile's process of providing RFPs (Request for Proposals) and obtaining detailed public comment has been surprising to me, and I have visited the country twice prior to this year and have spent a total of about three months in Chile. Their government and professional class is equal to the level of their US counterparts, without question.
The Chileans that are provided vouchers to pay for housing reconstruction are required to group up with a minimum of 50 other homes, set up through their local municipalities. This gives the people both buying power when they go to contract a job and also allow for efficient, and fast reconstruction. The voucher program will help rebuild the community quickly while providing a near-term economic benefit to the construction companies and materials suppliers and via wages to their employees that then generates economic benefit back into the community. There are projects of reconstructing an entire neighborhood that are almost completed now, with today being the 6 month anniversary of the earthquake.
Our meetings in Chile have been with large, professional construction companies that may see a boost from getting a large social housing reconstruction project, but they do not expect to have much of a difference in total revenue as they were already completing $100 million + projects every year. The plans and engineering we have received has been thorough, detailed, and our questions have been answered quickly. We were provided accurate information about the project types to be built, the design, style, and structure of these buildings, and it appears that our information was thoroughly reviewed.
The available market for future projects is markedly different.
Haiti is completely dependent on foreign donations to fund the reconstruction. They can't accomplish anything without donations, and donations breed a lot of unsavory characters waiting with their hands out for a piece of the action. If the foreign donors decide every house has to be made out of mud, then that is what will have to happen or nothing will be built with the donors money. Or they could force the Haitians to use stacked rocks, or the donors friends building system, or anything other than the best and most efficient modular or panelized building system for the specific project that is being built.
Chile has a sovereign wealth fund primarily from taxes on copper mining that can almost pay for the entire reconstruction, if they wanted to empty the account. This means that Chileans can confidently act to fix their situation in the best way they can come up with because they control their own destiny. If they want to borrow money, their Standard and Poor's Credit Rating of A+ allows them to borrow it at very low rates. If they want to pay cash, they pay cash. At no point can an outside government or entity force them to do anything that they do not want to do. This means that unless the contractor or developer of a project is not exposed to all of the available options, they will choose the most efficient and best system of construction for their project. Building systems like panels or prefab packages are the most efficient way to build construction projects, and the best supplier should be picked, not the one with the best connections.
Chile and Haiti are a study in contrasts, and they will continue to diverge on their paths to reconstruction as we get farther away from the time that each earthquake happened. Haiti still has an opportunity to come through and rebuild their country in a positive and sustainable way, as they have one major benefit that Chile does not have. There is a long way up to go. Many of the best minds in the construction, development, city planning, and social and government industries are focusing on Haiti and putting human and financial capital into the country in a way that has never happened before. It is like people woke up one day and realized there is actually an island off the coast of Florida where people are are starving and terribly suffering, even though it has been happening for a long time. That wake up call has created an extremely valuable opportunity for Haiti and benefits are being seen, although at a slower pace than everyone would like (especially the Haitians living in tent cities), and at a high cost in human lives.
In both Haiti and Chile, the competition for business is fierce. I have heard anecdotal stories from associates who visited Port-au-Prince that there are guys with their factory brochures on the streets trying to find anyone they can to buy their product. If true, it demonstrates the efforts people will go and the personal danger that they are willing to risk to sell product. I guess if you can get tens of thousands of entrepreneurs to go across the world to Iraq to help rebuild a country in a time of war, it isn't that much of a jump from the US to go to Haiti. In Chile, one of the government ministers of China and several European nations have visited with contingents of private businessmen, trying to secure business for their constituents. We are aware of plans and bids from companies in at least ten different countries for projects in Chile.
Companies can use the internet to provide information via the internet so that different parties can understand where the others are coming from, and what services they want to buy and provide. A big positive now is the prevalence of automated translation engines for websites, which while still imperfect, can translate in most cases the general intent of the website into almost any language. This has the effect of providing a data multiplier of many, many times on the available information in each individual language, and brings businesses closer together and closer to making deals.
When the market grows for construction materials in places that cannot build enough of their own with domestic sources, there is a great opportunity for prefabricated building suppliers. Haiti is a huge market if the cash donations ever arrive for this because they need strong structures built quickly and simply, and hopefully at a low cost, and their experience in large projects practically does not exist. Chile's is already thriving, with professional project managers, engineers, superintendents, and all of the people you need to accomplish large projects, but most importantly the money is already there. The challenge in Chile is that they may be able to complete many of the projects using their large domestic lumber reserves and locally sourced materials, rendering importers without as large of a market. The next six to nine months should flush things out, when Haiti gets past the wet (Hurricane) season and Chile starts reporting on the projects for housing, schools, and hospitals that have been bid out but not started yet.
Companies from Russia, Europe, China, and the US vie for business for large social projects, as affordable housing for temporary workers at large hospitality and infrastructure construction projects, and as shelters for remote outposts of all kinds.
In addition to prefab housing and prefab building projects that are part of long-term government planning or long-term private business development, there have been many natural disasters that have wiped out a large swath of housing stock and quickly created a market for the international trade in export prefab packages. In 2010, Haiti and Chile's earthquakes have been the major international markets for new construction created by natural disaster.
Our company has been involved in the process of proposing our prefab systems to clients and government in both countries. It has been striking to see the difference in the two.
Haitian projects typically come with limited information and require a lot of creative assumptions to allow for a healthy and detailed proposal to be generated by our company. I do not believe that any of the projects we have bid have either been awarded or started yet, as of 8/27/10. To my knowledge, the only projects that have started in Haiti are small private jobs, typically funded by speculative prefab factories or church and community groups rebuilding the social and religious buildings in Haiti like schools, orphanages, and churches. I do not have any experience to report on the type of construction and development companies from Haiti, but I can tell you that the larger companies that we have met have all been non-Haitian companies hired by outside NGOs to manage work there. These companies must have Haitian sub-contractors, and workers, in Haiti, but these outside groups appear to be the ones managing the projects because of Haiti's limited construction and development experience.
Chile's process of providing RFPs (Request for Proposals) and obtaining detailed public comment has been surprising to me, and I have visited the country twice prior to this year and have spent a total of about three months in Chile. Their government and professional class is equal to the level of their US counterparts, without question.
The Chileans that are provided vouchers to pay for housing reconstruction are required to group up with a minimum of 50 other homes, set up through their local municipalities. This gives the people both buying power when they go to contract a job and also allow for efficient, and fast reconstruction. The voucher program will help rebuild the community quickly while providing a near-term economic benefit to the construction companies and materials suppliers and via wages to their employees that then generates economic benefit back into the community. There are projects of reconstructing an entire neighborhood that are almost completed now, with today being the 6 month anniversary of the earthquake.
Our meetings in Chile have been with large, professional construction companies that may see a boost from getting a large social housing reconstruction project, but they do not expect to have much of a difference in total revenue as they were already completing $100 million + projects every year. The plans and engineering we have received has been thorough, detailed, and our questions have been answered quickly. We were provided accurate information about the project types to be built, the design, style, and structure of these buildings, and it appears that our information was thoroughly reviewed.
The available market for future projects is markedly different.
Haiti is completely dependent on foreign donations to fund the reconstruction. They can't accomplish anything without donations, and donations breed a lot of unsavory characters waiting with their hands out for a piece of the action. If the foreign donors decide every house has to be made out of mud, then that is what will have to happen or nothing will be built with the donors money. Or they could force the Haitians to use stacked rocks, or the donors friends building system, or anything other than the best and most efficient modular or panelized building system for the specific project that is being built.
Chile has a sovereign wealth fund primarily from taxes on copper mining that can almost pay for the entire reconstruction, if they wanted to empty the account. This means that Chileans can confidently act to fix their situation in the best way they can come up with because they control their own destiny. If they want to borrow money, their Standard and Poor's Credit Rating of A+ allows them to borrow it at very low rates. If they want to pay cash, they pay cash. At no point can an outside government or entity force them to do anything that they do not want to do. This means that unless the contractor or developer of a project is not exposed to all of the available options, they will choose the most efficient and best system of construction for their project. Building systems like panels or prefab packages are the most efficient way to build construction projects, and the best supplier should be picked, not the one with the best connections.
Chile and Haiti are a study in contrasts, and they will continue to diverge on their paths to reconstruction as we get farther away from the time that each earthquake happened. Haiti still has an opportunity to come through and rebuild their country in a positive and sustainable way, as they have one major benefit that Chile does not have. There is a long way up to go. Many of the best minds in the construction, development, city planning, and social and government industries are focusing on Haiti and putting human and financial capital into the country in a way that has never happened before. It is like people woke up one day and realized there is actually an island off the coast of Florida where people are are starving and terribly suffering, even though it has been happening for a long time. That wake up call has created an extremely valuable opportunity for Haiti and benefits are being seen, although at a slower pace than everyone would like (especially the Haitians living in tent cities), and at a high cost in human lives.
In both Haiti and Chile, the competition for business is fierce. I have heard anecdotal stories from associates who visited Port-au-Prince that there are guys with their factory brochures on the streets trying to find anyone they can to buy their product. If true, it demonstrates the efforts people will go and the personal danger that they are willing to risk to sell product. I guess if you can get tens of thousands of entrepreneurs to go across the world to Iraq to help rebuild a country in a time of war, it isn't that much of a jump from the US to go to Haiti. In Chile, one of the government ministers of China and several European nations have visited with contingents of private businessmen, trying to secure business for their constituents. We are aware of plans and bids from companies in at least ten different countries for projects in Chile.
Companies can use the internet to provide information via the internet so that different parties can understand where the others are coming from, and what services they want to buy and provide. A big positive now is the prevalence of automated translation engines for websites, which while still imperfect, can translate in most cases the general intent of the website into almost any language. This has the effect of providing a data multiplier of many, many times on the available information in each individual language, and brings businesses closer together and closer to making deals.
When the market grows for construction materials in places that cannot build enough of their own with domestic sources, there is a great opportunity for prefabricated building suppliers. Haiti is a huge market if the cash donations ever arrive for this because they need strong structures built quickly and simply, and hopefully at a low cost, and their experience in large projects practically does not exist. Chile's is already thriving, with professional project managers, engineers, superintendents, and all of the people you need to accomplish large projects, but most importantly the money is already there. The challenge in Chile is that they may be able to complete many of the projects using their large domestic lumber reserves and locally sourced materials, rendering importers without as large of a market. The next six to nine months should flush things out, when Haiti gets past the wet (Hurricane) season and Chile starts reporting on the projects for housing, schools, and hospitals that have been bid out but not started yet.
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