How is Echelon different than other Custom Builders?
When we started Echelon, we had several years of experience building homes in our Schell Brothers communities but we knew that to make Echelon a success, we had to gain a better understanding of the custom home business. The first thing we did is interview countless people who had built a custom home with other builders to find out what they liked and didn’t like about their experience. We conducted this research over a 6 month period and what we discovered was very surprising. We found that 68% of the people interviewed said that they did not enjoy the process and would not build with the builder again. In other words, the custom home industry has a 32% customer satisfaction rating . . . that has to be one of, if not the lowest of any industry. In fact, 23% said that the word “nightmare” most accurately describes their building experience. Our research helped us uncover the reasons behind the dissatisfaction of most custom home buyers and structure Echelon in a way that provides not only a well built, well designed home but also an extraordinary home buyer experience. Here are just a few of the things Echelon does differently:
- In-house design: While most custom builders require their customers to design their homes with an outside architect, we have in-house CAD and interior designers to take the house from concept to completion. In-house design allows us to review the plans from a construction efficiency standpoint and avoid designs or details that are unnecessarily expensive to build . . . this is a common problem with plans produced by architects who have no construction experience. In addition, our designers are exclusively focused on designing custom homes with great floor plans and awe-inspiring curb appeal. In most reputable architecture firms, custom home business falls relatively low on the priority list and often takes a back seat to large multi-family and commercial architecture projects. The quality of our designs is reflected in the numerous National and Regional Awards we have won for our homes.
- No allowances: At Echelon, we guide our customers through the entire design process prior to executing the construction contract. This allows our customers to choose all their finishes down to the last detail and get an exact to-the-penny price on their home prior to being obligated to build with Echelon. As explained later in the Q & A section, allowances are a major source of conflict between the builder and the buyer.
- Low Homes Under Construction to Superintendent Ratio: To build a home properly requires a certain amount of time and attention by the builder. Many builders take whatever business comes there way without considering the capacity of their current staff . . . the thinking is: “Let’s just get the job and figure out how we’re going to build it later.” I’ve seen custom home superintendents at other companies be responsible for building up to 15 homes at the same time. Echelon limits the ratio of homes under construction to superintendents to 3. This allows us to not only give each home we build the attention it deserves but also provide the customer with frequent communication about the progress being made on their home. Unfortunately, this also means that we sometimes have delayed starts on new Echelon builds as once we reach our limit of 3 homes to each Superintendent, we must wait for a home to finish before we can start a new one. The quality of our homes and the experience we provide our buyers is more than worth the wait.
- Customer Looking Glass: Each Echelon Customer is given a username and password for their Customer Looking Glass, a private section of our website dedicated exclusively to their home. The Customer Looking Glass contains all the documents relevant to the home including the home plans, contracts, selections, etc. In addition, our Echelon Project Managers will update the site every week with pictures and videos of the home along with a blog entry updating the homeowner on progress. The Customer Looking Glass allows our customers to not only closely follow the progress being made on their home but also share in the excitement of the build.
- Club Echelon: When you build a home with Echelon, you become part of the Echelon Family. The Echelon Process naturally creates long lasting friendships between the Echelon Staff and our customers. These relationships continue after the build through Club Echelon. Echelon hosts several social events throughout the year for our Club Echelon members. Through these events, our Club Echelon members have gotten to know each other and some strong friendships have formed.
- Customer Service: At Echelon, we pride ourselves on the service we provide to our customers after they move into their new home. We have an entire customer service department ready to respond to our customers’ needs at a moments notice. Large or small, no customer need is beyond the scope of our Customer Service Team. Our Echelon homeowners are very important to us and have come to expect a certain level of service from Echelon. Through our dedicated service department, we are able to provide unparalleled support for our homeowners.
Will Echelon Provide Customer References?
Yes, we do. In fact, we have a policy of providing a prospective customer with our entire client list. Every customer that Echelon has ever built a home for will be included on the Referral List. This policy keeps us motivated to make sure that every Echelon customer is ecstatic with their home and the Echelon Process. We encourage you to call anyone and everyone on the list. We are confident they will have nothing but great things to say about Echelon. We highly encourage you to do extensive research on your builder prior to signing a contract. A new custom home is likely to be one of the most expensive things you purchase in your lifetime. If you’re going to spend this much of your hard earned money on one item, it’s well worth the time and effort to make sure you choose the right builder for your home. The best way to find out the quality of the builder is to talk to the builder’s prior customers. Unfortunately, because it is relative easy to become a builder, there are hundreds of builders to choose from with a wide range of quality. Perhaps one of the best ways to discover the truth about a specific builder is to interview a prior customer that the builder did not include on their referral list.
What does Echelon charge per Square Foot for construction?
This is a question we are often asked and there really is no simple answer to this question. The real answer is “It depends”. The cost of a home depends on several factors including the complexity of the design, the quality/cost of the finishes, the number of stories in the home, and many other factors. Another factor that affects this answer is that there is no standard definition for “Square Footage.” Some builders include only conditioned space when calculating square footage while other builders include all “under roof” space which includes the garage, porches, storage, basement, and other space that is under roof. At Echelon, we use only the conditioned space when quoting square footage numbers. Using this definition, we’ve built homes as inexpensive as $125 per heated SF and homes as expensive as $500 per heated square foot. The typical Echelon home costs around $175 per heated SF but again, the cost varies dramatically depending upon the design and finishes in the home.
How can I be sure I’m getting a fair price from Echelon?
At Echelon, we shoot for a 10% profit margin on every home. While some builders cater the price of the home to the perceived wealth of the buyer, we have a firm policy at Echelon to treat all our customers fairly and equally. This has worked well for us and has allowed us to maintain a great relationship with all of our Echelon homeowners. While Echelon is not always the lowest bidder, our pricing is very competitive. The term “You get what you pay for” applies to custom homes as much, if not more, than it applies to anything else. When conducting our research, we found that there was a strong correlation between those people who “hired the lowest bidder” and those people who described their building experience as a “nightmare”. Unfortunately, it is relatively easy to be a Builder. There is no certification process to become a builder. For this reason, the level of quality and professionalism among builders varies dramatically. Many builders will use the cheapest materials and hire the cheapest subcontractors in order to get the lowest cost (and highest profits) on their homes. Unfortunately, the cheapest subcontractors are usually the lowest quality subcontractors with the least experienced work force. Hiring the lowest bidder will usually cost more $ in the end due to the costs of fixing all the mistakes and problems caused by inferior workmanship and cheap materials. Hiring the cheapest HVAC or insulation subcontractor can be particularly painful as the inferior quality will be reflected in a higher energy bill every month. At Echelon, we hire only experienced proven subcontractors and this is reflected in the quality of our homes and the happiness of our homeowners.
How can Echelon’s pricing be competitive with all the extra services Echelon provides?
The Echelon Team and Process is certainly more extensive than that of our competition. However, Echelon’s affiliation with its parent company, Schell Brothers (a large production builder), provides Echelon with many cost advantages not available to other Custom Builders. For example, we buy all of our cabinets directly from the manufacturer, resulting in significant savings for our customers. We also buy many of the other materials used in our homes directly from the manufacturer. This results in a significant cost advantage for Echelon that more than makes up for the added overhead associated with the top notch Echelon staff and the Echelon Process. In addition, Echelon benefits by sharing the back office and management staff with Schell Brothers. For example, the owner’s salary and the salary of all the accounting staff is paid by Schell Brothers and thus Echelon is not burdened with this cost.
Why doesn’t Echelon provide Allowances like most other Custom Builders?
During our custom homeowner interviews prior to starting Echelon, we discovered that one of the single greatest sources of conflict between a custom builder and the customer is the use of “Allowances”. An allowance is simply a dollar amount included in the contract that allows for a specified amount of money to be spent for a specified finish (i.e. flooring, cabinets, countertops, appliances, light fixtures, landscaping, etc). For example, a builder may provide a customer with a “Cabinet Allowance” of $30,000. There are several problems with allowances that create friction between the customer and the builder. First, it is very common for a customer to exceed the Allowance (and pay a change order) as builders tend to make these allowances low in order to make the contract price of the home appear low. Also, it is often unclear how money in the allowance is used. For example, does the cabinet allowance include paying for the labor cost associated with cabinet installation? Does the builder markup the cost of the cabinets and thus make additional profit off the allowances . . . and if they do mark up these costs, by how much? If you don’t spend all the allowance money, do you get it back? The point is, allowances are not only open to manipulation by the builder but the presence of allowances also makes it impossible for a customer to know the actual cost of the home prior to signing the contract and getting a construction loan. Once a customer signs a contract, all of their negotiating power is gone and the builder can use the allowances to make additional profit on the home. The other major problem associated with Allowances is the amount of time they require of the customer. Most custom builders provide allowances partly because they don’t have a design center or the in-house design staff necessary to help the customer choose the finishes in their home. So, customers are sent to Lowes, Home Depot, or other locations to choose and sometimes purchase their finish materials (flooring, cabinets, etc). This requires not only a lot of time but it also requires the customer to make their interior design decisions without the help of a professional, often resulting in less than ideal choices and color combinations. In addition, the allowance process ensures that customers are paying retail prices for materials that could be bought wholesale or direct by the builder (like Echelon does). At Echelon, we completely remove the problems created with allowances by guiding the customer through the entire home design process in our Design Center. This allows us to reduce the time and frustration often associated with the custom home design process. Most importantly, this allows the customer to design the exact home they want with the help of a professional and also get a “to-the-penny” guaranteed price on their home prior to signing the Construction Contract.
What should I look for when researching builders for my custom home?
As mentioned above, by far the most important factor when determining the quality of a builder is how happy the builder’s customers are with the builder. However, there are some other factors that a prospective homebuyer should explore before choosing a builder. They are:
- What is the builder’s financial situation? Many builders have been hurt by the housing downturn and are having trouble meeting their financial obligations. Financial stress has caused builders to cut back on their staff and operate their business with a skeleton crew, which means it will be difficult for these builders to build a quality home and provide adequate customer service. In addition, some of these builders are close to bankruptcy and may not be able to finish your home. To determine a builder’s financial situation, you can ask questions like: How much debt does your company have? How many unsold Spec homes do you have? Are you currently in any form of “workout” with any bank? Can I see a copy of your most recent company bank statement and accountant prepared financial statements? Good financially sound builders will gladly answer these questions and provide you with any documentation you request.
- Who specifically will be building my home? It is important that you meet the actual person or team of people that will be onsite as your home is being built. The quality of your home will be directly related to the skill and experience of the superintendent building your home. Many custom builders have owners who are experienced builders and good salesmen but these “owners” are usually not onsite as your home is being built. Make sure you interview the person who will actually be building your home before you contract with a builder.
- Does your company have a dedicated customer service department with separate staff and equipment? Most custom home builders do not have a customer service department and thus will provide minimal customer support after delivery of the home. In our research, this was a major source of frustration for custom home buyers. With custom homes, it is inevitable that issues will arise that need to be addressed by the builder. Without a customer service department, it will be very difficult for a builder to provide sufficient customer support. Unfortunately, most custom builders do not have much interest in allocating resources to customers who have already paid them in full.
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