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Meeting This Year's Top Business Challenges

While the National Association of Home Builders reports ômodest, positive economic signalsö for 2012, it will be far from smooth sailing. Here are some of the issues builders, remodelers and other industry pros expect to face this year, with suggestions on how you can address them.

New regulations and cutbacks

New regulations, along with delays in permitting and inspection because of government cutbacks, are the big challenges expected by Alicia Huey, President of AGH Homes in Birmingham, Ala. She also notes delivery delays of materials and supplies, as suppliers try to do more with fewer people. Keeping customers happy in this environment requires builders and remodelers to adapt. ôWe have to be more proactive and stay ahead of the process,ö says Huey.


From government regulations to accurate appraisals, 2012 will most likely increase the paperwork burden on builders, so getting organized has never been more essential.

Government paperwork

The ever-increasing burden placed on builders by government also frustrates Rhonda Burgin, Vice President of Burgin Construction in Santa Ana, Calif. ôAll of these rules and regulations, EPA, OSHA, AQMD (Air Quality Management District), workers comp, sales tax, HR, add up,ö said Burgin. ôUnfortunately, there's no easy answer.ö Burgin said she must create a department ôjust for handling the paperwork.ö

Accurate appraisals

Getting accurate appraisals could continue to be a hurdle. Steve Linville, Director of Single-Family Home Finance at the National Association of Home Builders, advises builders to request appraisers who have experience with new construction, understand green building values and are willing to meet with the builder and let the builder provide appropriate comps. He also tells builders to develop a checklist with the information appraisers need. If an appraisal seems flawed, nothing prohibits a lender from ordering a second appraisal.

Price sensitivity and foreclosures

Bob Schultz, President of Bob Schultz & the New Home Sales Specialists, works with homebuilders across the country. He sees the top challenge of 2012 as increasing sales revenue in a price-sensitive market with a glut of foreclosures. ôIn this climate, only the best salespeople will survive,ö he says. ôFor instance, every salesperson needs to know how to effectively demonstrate a model home and explain all of its features.ö He also recommends using and promoting well-known brands that buyers trust.

Lead generation

In a recent feature in Professional Remodeler magazine, 16 industry leaders talked about their top challenges and opportunities for this year. Several pointed to a need for cost-effective lead generation. As always, the most effective leads come from customersÆ referrals. DonÆt be afraid to ask for referrals in todayÆs market. If a customer wonÆt refer you to friends or family, itÆs best to know why -- and fix the problem.

The Professional Remodeler group of industry leaders also addressed increasing competition from people who are new to remodeling or donÆt play by the rules. They agreed that the best response is to set yourself apart from those kinds of contractors through specialization. The Certified Aging-in-Place Specialist (CAPS) and LEED credentials are prime examples of training that can help establish a niche in the market. Clients looking for those types of skills generally arenÆt swayed by a competitorÆs lowball bid.