Wednesday, February 12, 2014

A not so perfect world


A not so perfect world

In a perfect world, a home will always be built on time and to a 100% quality standard.  Unfortunately, we do not live in a perfect world.  Forced to sometimes choose between a stated delivery schedule and meeting a defined quality standard, what would you do?

You may have a contract that states an anticipated delivery date.  While the date is written as a soft timeframe with more disclaimers than you care to remember, a buyer will look at that date as cast in stone.  That date, while still qualified, is then most likely reinforced by the builder during his conversations with the buyer.  Additionally, the buyer will probably be making arrangements based on that closing date, scheduling moving trucks, furniture delivery and family gatherings.  On a positive note, you can probably get away with changing the delivery date up to 30 - 45 days prior to the estimated closing without causing too much heartache.  After that, you may have a real problem on your hands and you may have to consider eating the cost of accommodations and storage expenses to reduce the inconvenience to your buyer.

On the quality side, you may find yourself in a bind if the home will be completed on time, but it does not meet the fit and finish standards that your buyer is expecting at the delivery of their home.  A buyer should always expect the same level of quality in their own home that they see in the model homes.  You also want to minimize quality issues to reduce the level of warranty work that needs to be done to a home right after closing.  No one wants to have to perform quality repairs after delivery with residents living in the home.

The question, though, was what will you do if you are forced to choose?  My choice would be to maintain quality over delivery.  You may be able to make up for the inconvenience of a delayed close by taking a monetary hit to resolve the timing inconvenience.  However, you can rarely, if ever, recover from a lapse in quality.  First, if there are issues at closing, I guarantee you that the buyer will subsequently find a dozen more perceived deficiencies with the home whether they truly exist or not.  You have already planted the seed for poor quality in their heads and they will be looking for reasons to reinforce their negative perceptions.  Second, they will absolutely tell all their friends about how disappointed they are in the quality of their home and how they have lost faith in you as a builder.  If you are late in delivery, you can go over the top to work to make it up to them.  If the quality is poor, they will always feel like they are living in a substandard home.

Neither option is good.  Life, though, is not always fair and there will be times when you have to make difficult decisions.  My decision is to always err on the side of quality.

Until next time…

Keep kicking the dirt!

Jeff Gersh is President of Gersh Consulting Services, a real estate advisory firm, headquartered in Orlando, FL.  He may be reached at jsgersh@gmail.com or 407-468-9328

 

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