Monday, July 21, 2014

A Site Builder Gives Out Misinformation About Modular Homes

OMG! Welbilt Homes in Leesport, PA, just north of Reading, has the following statement on their website. I can’t let this go without responding. My thoughts are in RED. Let me know if I missed a point or two.

Link to their web page:

Things to Know BeforeYou Buy a Modular Home. This is why you build Stick Built Homes!!! What do you folks think we build our homes with? Mud and straw!

By definition and for purposes of this article, a modular home is a house that has been built in sections in a manufacturing facility and then moved to the site where it’s put together on a foundation, crawl space, or concrete slab. Once completed, a modular home is virtually undetectable from a site or stick-built house. Great point!

Shopping for a modular home is a lot like shopping for a new car. There’s the base price that doesn’t sound all that bad and is certainly not over your budget. Then there’s the “real” price. That’s the price the car will cost if you want a steering wheel and tires. I jest, but you’re probably getting the idea. No, I really don’t get the idea. Are you saying that Welbilt Homes doesn’t have a base price for your homes?

Modular home buying is similar. You see the pictures and walk through a few models and you just know this will be the best way to go. And there definitely are advantages to buying a modular home. They’re built indoors, so there’s no weather delays or weather-damaged building materials. Once construction begins in the plant, it takes less than a week to build the sections and prepare them for transport. The cost per square foot is generally less than a site built house, and in most cases the construction itself is high quality. Another Great Point!

But here’s the catch. There’s a lot more expense to buying a modular home than selecting the model you like and waiting for its delivery and final construction. There are options you’ll need to choose from. Apparently Welbilt Homes doesn’t have options. There are contractors you’ll need to hire. Again, Welbilt must not use contractors for anything. There are many expenses and things to consider that are not included in the base price of the house. So, before you sit down with the friendly salesperson, investigate and think about the following:

Dimension. What size house can you afford? On average, a modular home will cost anywhere from $65 to $85 per square foot to build. But this is for the house itself and nothing more. Again, what’s your point?

Site. Do you already own the site, or do you have to buy that too? Is your site undeveloped, or are the utilities already nearby? Will you be installing a septic system? Where is your electricity, water, and natural gas or propane coming from? Who will dig your basement or crawl space or pour the cement slab? Estimates and costs from contractors and utility companies might surprise you. This applies to site building as well. The owners of the company will do a site visit with you to get a estimate of what you might need. After that we will send it out to our Septic Designer or Engineer and they will design the system you need. Then they figure the cost and we forward that onto you. Everything is up front and on paper. I don’t think that any builder, modular or site, can get a building permit without these things being completed.

Heating, air conditioning, plumbing. Remember that your house will not come from the factory with any duct work or wiring or water lines. This statement is total BS. You’ll need contractors for your sheet metal, electrical, and plumbing plans and installation. Have you thought about what kind of heating and air conditioning units you want? How about appliances? OMG, how could a modular home builder forget to ask if the buyer wants heat and appliances. We must be stupid not to think of this.

Garage, porches, and decks. Pictures of modular homes always display garages and pretty porches and decks. But those don’t come with the price of your modular home either. If you can’t do the work yourself, you’ll need to hire someone to pour the garage floor and a carpenter to build your porches, decks, and garage. The modular home builder is a contractor and can do this work….Duh!

Options. And then there are the options. Electrical outlets and phone jacks, priced by the number of each. Wall and floor coverings made to sound like great inclusions, when in reality the quality is fair and the selection poor. Basic lighting fixtures that are also included, but would be better left out with a discount so you can shop and buy what you really want from your favorite home building center. All of our outlets and switches are to code. You will have plenty and don’t have to worry about not having enough. The light fixture you pick out yourself. We give you a allowance and you buy whatever you want and we install them. This is about the most asinine statement I’ve ever read. There are electrical codes that determine these things and you can’t build a house with meeting them.

When all is said and done, expect to pay at least 20% more than the friendly salesperson’s figures. How would a modular home builder stay in business if they underquoted their homes and then tried to get a higher mortgage at the last minute? That’s not to say the salesperson won’t make you aware of the things I’ve written about, but the cost estimates and work involved will likely be downplayed and considerably less than reality. I can’t believe Welbilt Homes doesn’t give estimates when quoting excavation, well and septic. Your friendly salesperson will also encourage you to believe you are getting many wonderful inclusions, when in fact you would be better off to ask for the inclusions to become exclusions, with the house discounted accordingly. Then when your home arrives, go to your favorite department stores and home building centers and buy the best you can afford. Another stupid statement. The cost of deleting a special order faucet and the customer buying it a Lowe’s and having a plumber install it will probably be more than the modular home builder would have charged.

Our salesperson at Welbilt Homes are straight forward and upfront with everyone. Unlike modular home builders that are sneaky and deceitful? You pick out whatever options you want on your dream home. He prices it out for you and then you pick and choose what you want. Then that is added to your contract. Everything is up front and in writing. We never install anything you don’t want or pay for. And modular home builders do something different than that?

This statement seems to have written by a site builder that has been losing home sales to modular home builders and doesn’t know how else to compete except by making these statements. And you know what they say…”I saw it on the Internet, so it must be true.”


Builder Bob said...

This is an example of one stick builder trying to figure out why modular homes are becoming more mainstream and site building is becoming less so.

Anonymous said...

Stick Builder feeling the pinch taking all the myths, rumors and bad sales concepts concerning modular and using it for anti-marketing. Guess he can't sell on value unless he has a "straw man" to bad mouth.

Bob McCracken said...

Gary good solid straight work as usual. This builder has serious problems. If i am not mistaken I have seen ads he runs - picture of house - with price - the only thing is if you know what you are doing you call and ask and find out, land and site things, like water and sewer are not included. I am not sure if the foundation was even included. Thanks for being heads up and catching this article and taking your time to comment on it.

Anthony said...

Unbelievable statements-this article read by any person of intelligence would think worse of him after reading than before reading. He makes MANY false or ignorant statements throughout the article. Great job Gary-keep up the good work!

Marta said...

The builder is threatened by the modular home industry. Instead, he should embrace it! We aren't looking to do away with builders. We are looking to partner with them. We need builders! For the very reason he mentions. They bring expertise and knowledge of their local building market to the table where we as manufacturers can't. Or at least we can't do it very economically. He is right, anything that has to be done on site completely takes away from the modular concept. However, there is a place for both of us in the world of modular sales. The builder should be thinking "Gee, I can do twice as many houses a year if I use modular's instead of building from scratch". Just my opinion, but we as an industry need to find a way to educate builders that we are not here to replace them but to work with them.

Unknown said...

Honestly, I look at this as an example of how poorly we have defined ourselves over the years. The fact that he (the stick builder) can still use this rhetoric is a result of how we have presented ourselves in the past and many of us still today. We really need to step up our marketing to reflect what a lot of us are doing today and I'm not so sure that the word "Modular" is helping us tell the real story. Unfortunately there remain enough "dealers" "selling modulars" that it lends some credence to his argument. Sorry, but thats the way I see it.
Scott Stone, Oxford, Maine

Unknown said...

Well said, Marta.

Anonymous said...

As "Pogo" once said "we have met the enemy and he is us".

Marta you express an ideal but the following questions arise:

How many factories, sales managers, factory reps are willing to provide the necessary training and materials to builders for the education of clients?

How many factories, sales managers, service managers, factory reps take ownership of the builder relationship with timely quotes, and factory service before, during, and after the set?

How many factories, sales managers are focused on attracting talent or builder base from other factories instead of training their own staff and recruiting new builders?

Yes, I know the standard answer is "builders are not loyal" and they chase the cheapest option but how many factories, sales managers, and reps teach a builder, developer, or end user the "Value" of their product and nurture a relationship.

If modular factories are to be value suppliers to the builder market they need to focus on deliver of "Value" not price.

Unknown said...

This is an old post, but I have to say that I sat down with Welbilt and almost signed with them. They sent me to see an unfinished house (they said it was finished). They said they'd send my plans out to an engineer and I'd have to pay $1000 to get an estimate for that alone, although it would be deductible if I chose to go with them. I'd just have to eat it, if they gave me a high price. One person said I could build with my budget. Another looked at me like I had 2 heads when I told them that the owner said I could. They give you a set house price. Like what they claim modular builders do, they add $50,000 on to that base price for site work and don't give any sort of proof as to if it would go over. They have tons of options, at additional cost. Their base price things are exactly what they say a modulars is. Generic. They did have some better specs, some better quality, but modular did in other points. Modular, I sat down and was told $80,000 site work, which brought the homes to approximately the same price. I'm still searching for a builder. Is any builder completely upfront and honest. I'm not sure. But, I must say that the modulars have them worried, as they mentioned the modulars while I was leaving and put them down. Apparently to discourage me from looking at them, which did the opposite and made me look. A girls gotta keep her options open. lol. They wouldn't be putting them down, if they didn't think they were competition. They'd just not mention them at all. My experience with Welbilt was terrible and I didn't even go with them. After I got sent to look at a finished house, which was unfinished, the owner literally got angry at me. Apparently I was lying and the man told me to look at the outside.....he gave me the lockbox number!! Never an apology. I don't know which is better, stick or modular, but something was off with Welbilt. So glad I stopped that before it began!! Hope that helps....