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Over the past 18 months, Houzz collected data on thousands of kitchen renovations. Check out the highlights here:

$40k

the median price for a major kitchen remodel.

9 out of 10

homeowners replaced their countertops. Engineered quartz was the leading material, while granite came in second.

35%

of the appliances that were upgraded included high tech features such as wireless and smart phone controls.

89%

of homeowners hired a professional for their renovation project.

Three and a half decades ago, Tom, an old partner of mine, owned a sailboat, which he loved. Tom harbored his sailboat on the Chesapeake Bay about two and a half hours from our offices, and he used it for entertaining clients, taking his partners and staff on outings, fishing with friends, and sometimes just sailing for the pure joy of it. As he advanced through middle age, however, he found that his children were no longer kids, had developed interests of their own, and seldom wanted to sail on the bay. His wife, who was never much enamored of the boat, had grown to dislike it, and his friends had moved onto other hobbies. The boat was expensive to keep and always seemed to need repairs or maintenance. The physical exertion required to sail the boat had become harder for him to muster, which made his trips to Maryland less and less enjoyable as the years passed.

Eventually Tom concluded that it was time to sell the boat. He had located a buyer across the bay from where his boat was moored and planned to deliver the boat himself with one last sail across the Chesapeake. Tom stopped by my office early one week and asked me to clear my calendar for Friday to serve as his lone shipmate on that final trip. He told me it would be a long but exciting day and that a steak dinner would be waiting for us back at his house when we were finished. Tom was a mentor to me, a senior partner at our firm, and a genuinely good guy. I felt honored that he chose me to go on that last voyage, and I immediately accepted his invitation.

Friday came, and we left at dawn. By the time we usually started our workday, we were at the dock. It was cold for early October, and there was a strong wind blowing off the water and into our faces. I asked Tom which direction we would be heading, and he pointed right into the teeth of the wind to a spot of land across the bay that I could not see because of distance and the soupy conditions. In my imagination, this trip was to be a gentle ride with the wind at our back across calm waters under a sunny sky. Now it seemed impossible, and I muttered something to that effect. Tom untied a knot to loosen part of a sail and said, “It doesn’t matter which way the wind blows. What’s important is how you set your sails.” Tom could see I was puzzled, so he explained that we would have to tack across the water by positioning our sails so we could zig zag in the general direction of our destination without ever trying to move directly into the wind.

For the next six and a half hours I trimmed sail, kept shifting from one side of the boat to the other to help balance her, and tried to avoid the boom that would swing every time we changed direction. Eventually we sailed the “Lenore” into the marina that would be her new home and wearily returned to Harrisburg, Pennsylvania for cocktails and a steak dinner that was savored even more than usually because of our adventure at sea that day.

I have not done much sailing since then, and I certainly don’t remember enough about the trip to tack a boat for six and a half hours into a strong Chesapeake Bay wind. But I have never forgotten the way my friend described a principle that every sailor knows and that every business person ought to know: “It doesn’t matter which way the wind blows. What’s important is how you set your sails.”

Lately America’s builders have dealt with some challenging issues. Supply chain problems and labor shortages persist. Inflation and rising interest rates have decreased consumers’ appetites for new homes. Sometimes, running a business these days, and particularly a home building business, can feel like you’re sailing into the strongest gales of a wicked Nor’easter. But even if the wind is against us, we can still make progress if we trim our sails and take a different tack, and here are some strategies we can use to navigate the current tough economic climate.

Pay close attention to your margins. Rising supply and labor costs coupled with low pricing by desperate competitors put profit margins at risk. Avoid this trap and make sure you make money on every house you build.

Stay on top of billing and collect what is owed. Cash is the life blood of a company and leaving it with the bank or the customer longer than necessary can place undue pressure on your operations. A good approach in tough times is to bill early, bill often and be persistent.

Make customer satisfaction a priority.  Repeat customers and word of mouth advertising are worth their weight in gold. If you experience a slowdown, check in with old customers and double up on customer service. This investment of time and energy could lead to some immediate sales and plant seeds for future transactions when the economy loosens up.

Be creative. Some builders get too comfortable building the same product repeatedly. If you are in that rut, get out of it by learning what consumers want (or will soon want) and start building those products. Customer preferences for home size, lot size, floor plans, finishes, and a myriad of other variables change over time. Learn what your customers want, and creatively craft the homes of their dreams.

Protect your profit. Make sure that you are not overpaying for material, labor, or equipment, that you are not undercharging your buyers, and that you take reasonable steps to protect your bottom line. Well drafted sales agreements, appropriate liability insurance, and an insurance backed express warranty with a mandatory binding arbitration provision are essential elements of a well-run and profitable home building company.

RWC has four decades of home warranty experience, covering more than four million homes. We offer a wide variety of warranty options like our standard ten-year warranty, our Day 1 coverage warranty, our extended appliance and system warranties, and our specialty warranties for remodeling projects, detached garages, and commercial construction. Only RWC has developed and offers its members a customized state warranty that mirrors each state’s statute of repose and accommodates other state specific issues. All RWC warranties provide clear performance standards that help create realistic expectations in your homeowners and provide a road map to resolving even the stickiest customer complaints.

At RWC, every guarantee our warranties make is backed by Western Pacific Mutual Insurance Company, RRG. Western Pacific has an A- rating from A. M. Best and only insures home warranty and similar new home construction risks, like builders’ general liability, which can be offered through the RWC Insurance Advantage program to RWC members. No other warranty company has an insurer with this kind of strength solely dedicated to covering builders and their homes.

While the economic wind might be in our faces now, remember that it doesn’t matter which way the wind blows. What’s important is how you set your sails. Take RWC aboard with you, and let us help you successfully navigate these challenging times.

Have a great Fall & Winter!

If it is beginning to feel as though tuning into your favorite news outlet is akin to watching Chicken Little warn of impending doom, you are not alone.

When it comes to the economic reports tied to the real estate market the negative chatter appears magnified. It certainly seems as though there are a lot of Littles yelling “The market is crashing! The market is crashing!” All this rumbling correlates directly with rates going up and sellers losing, what they have perceived as, the power position.

Inflation, supply chain issues, staffing problems, rising interest rates, and noticeable increases in the cost of everyday necessities, are absolutely giving credence to these concerns. The pain of our current economic strain is evident throughout our day-to-day lives. Plus, for many, the impact of the Great Recession is still visible in the rearview mirror.

Based on these factors, it is logical to presume the Littles are correct. The evidence seems to align with the idea that the housing market is about to fail. Counter to this, there are data points which contradict the negative viewpoints. What we are seeing are pricing corrections in the market which will allow for the return of balance to our industry.

Prior to the pandemic the housing market was steady between buyers and sellers, however, it was acknowledged that a housing shortage was imminent. That existing shortage has remained relatively unchanged. In part due to the increased demand during the pandemic paired with the overall inability of builders to keep up. At present, the ratio of homes available to buyers in the market is still imbalanced in the favor of sellers.

Leading up to the Great Recession, there were more homes built than there were qualified buyers. Currently, the buyer’s market is much stronger and more economically sound than years prior. On one hand this proved astronomically advantageous to sellers during the pandemic buying spree. On the other hand, foreclosure risks have been significantly decreased because lenders held onto their stricter guidelines. Many homeowners are sitting on equity gains that will keep them in a healthy position.

Given this strength, positive equity will play a part in tempering the probability of a foreclosure boom. Additionally, the momentum of demand for homes is still in play. This is in opposition to the market stance in 2008 where significantly over mortgaged properties were common.

Comparing current buying rates to the pre-pandemic buying rates, it shows a less than 1% decrease. Yes, the market has cooled, however, and this is an opportunity for increased stabilization. Buyers will once again have a fair chance of getting the home they want and be able to do so without making risky decisions. Additionally, it is less likely that buyers will experience absurd bidding wars over homes leading to equity deficits.

Despite the negative economic challenges faced by families across the nation, the balance has not completely shifted. Holistically, buyers are fiscally healthy and unemployment rates remain low, which indicates sustainability is within reach. Achieving this does require leaning on lessons of our past while implementing new mindsets. Ultimately, to avoid a crash, course correction is necessary and merely indicates an acceptance that the tides are changing.

We’ve all experienced bad service at some point. Whether it’s slow or inept service at a restaurant, a business vendor that underdelivers, talking to an employee with a lackluster attitude about solving your problem, or my personal favorite, those automated attendants on the phone that create an endless loop of frustration. It’s no fun and it leaves a bad taste in your mouth for far longer than the original encounter lasted.

At RWC, we have been proud of our commitment to customer service over our 40 years in business – we think our service sets us apart from others in our industry – but… we also know that we aren’t perfect and that there is always room for improvement. So, we are thrilled to announce the creation of our brand new “Concierge Service” designed to help us step up our service to the next level.

This is not one of those trendy, yet frustrating “automated call centers” but an actual experienced human! Novel approach, huh? In charge of our Concierge Service will be none other than RWC’s Bryon Earhart. Bryon has been appointed RWC’s Customer Advocate, and he will use his 34 years of experience in the warranty industry to help your customer experience be as pleasant and fruitful as possible.

Many of you have talked with Bryon over the years and know that he is personable, knowledgeable and tenacious at resolving issues. He’s the man now tasked with spearheading our customer service improvement initiative and brings all his experience to help you, our valued member, get the most benefit possible out of your RWC membership.

Feel free to reach out to Bryon…

You can reach Bryon directly at 800-247-1812, Ext 2199 or bryon.earhart@rwcwarranty.com.

And of course, your Account Executive is still here to help, but with RWC, you now have a Customer Advocate anxious to provide you with Concierge Service.

Bryon may not be able to hook you up with tickets to the hottest Broadway show but he is your ticket to the best customer service around.

 

Reminder of What’s On Our Menu of Choices for RWC

More Options From Us Means a Better Fit for You

As a Member in our warranty program, you are probably familiar with our Warranty Express online enrollment system. You enroll the home online and, after closing occurs and payment/forms are sent to us for processing, your buyers are able to download their warranty documents from our website.

We use 60 days as the time frame after closing before documents are posted but often, those documents are available much sooner. Did you know if you provide your buyers' email address on the Application for Warranty form (#10 on the form - see example below), we will send them an email to notify them whenever their warranty documents are ready to download?

We know that everyone gets bombarded with emails and sometimes “system-generated” notices can look like spam. Let your buyers know that they will get the following notice from us.

Then that’s it. We don’t spam them or communicate with them further unless they reach out to us for assistance.

Once they have the email, they simply click the link provided to go directly to the login page so they can easily download their warranty book and warranty confirmation form. It’s simple and convenient.

But if they are suspicious or even just accidentally delete the email, no worries. They can call or email our Member Services Department for assistance. And even if they NEVER download these documents, as long as we have received the warranty form and payment after closing, their home is covered for the entire warranty term. Those documents will stay online for the duration of their warranty.

Warranty Express is chock full of features for you. In addition to enrolling homes, you can:

Have questions on this feature or on any feature in Warranty Express? Call us at 800-247-1812 and ask for the Member Services Department. We are happy to help!

warranty express screen step 5In addition to a variety of home warranty programs, RWC and HOME of Texas offers unique features to make your membership as effective and efficient for you as possible.

As you know, Warranty Express is our online system for everything from home enrollment to membership renewal to ordering marketing materials and enrollment reports.

We wanted to emphasize an important point about the system when you are enrolling homes online. When you get to the last screen on Warranty Express, it will tell you “You are not finished!”

Why? What do you mean I'm not finished? Well, because we still need the signed Application for Warranty form and payment, if not paid online. (Pay online and save the $6.95 processing fee.)

It’s very important that you submit the signed Application for Warranty form after closing.

The warranty is not valid (even if paid for) if RWC/HOME does not receive the signed Application in order to validate coverage.

If you pay online, the signed Application for Warranty form can be faxed to (717) 561-4494 or emailed to Sandra at Sandra.Sweigert@rwcwarranty.com.

If you are not familiar with Warranty Express, contact your Account Executive for more details.