Print-All Page: November 9, 2009

In a major victory for NAHB that will boost the fledgling housing recovery and help struggling business owners nationwide, Congress last week approved legislation that will extend the first-time home buyer tax credit beyond its Nov. 30 deadline and expand it to a wider group of home buyers. The bill also provides relief to cash-strapped home builders by providing broader tax benefits for businesses with net operating losses (NOLs).

The legislation, which was signed into law by President Obama on Nov. 6, will extend the $8,000 credit for first-time home buyers for sales contracts entered into by April 30, 2010 and closed on by June 30. It has been expanded to include a new $6,500 credit for owners of existing homes who are purchasing a new principal residence. Existing home owners can claim the $6,500 tax credit if they have been residing in their principal residence for five consecutive years out of the last eight.

In more good news, the income eligibility limits to claim the full credit amount for both groups of home buyers have been raised from $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return to $125,000 for individuals and $225,000 for married couples.

NAHB’s consumer-oriented Web site, www.FederalHousingTaxCredit.com, provides complete details on the enhanced home buyer tax credit.

NAHB has launched a set of resources at www.nahb.org/taxcreditresources to help association members understand and promote the new tax credit.

For NOLs, the new law will allow all businesses — regardless of size — with operating losses in 2008 or 2009, not both, to claim refunds on taxes paid up to five years ago. Businesses can offset 100% of taxable income with NOLs carried back in years one through four and offset 50% of income in year five. Small businesses with less than $15 million in gross receipts would be able to claim a five-year carryback for 2008 losses under the American Recovery and Reinvestment Act and for 2009 losses under the new law. The new net operating loss rules will throw a lifeline to struggling businesses, allowing them to continue making payrolls, paying business loans and otherwise keep their doors open until the economic recovery takes hold.

Even as Congress neared completion last week on legislation to extend and enhance the home buyer tax credit, proponents of the tax credit made it perfectly clear that the extension would have a limited shelf life and not be extended again when it expires next year.

Sen. Johnny Isakson (R-Ga.), a long-time champion of the home buyer tax credit, said: "This is the last extension of the home buyer tax credit. Tax credits like this only work by creating the sense of urgency to take advantage of it, and to bring the market back."

On the floor of the Senate, Finance Committee Chairman Max Baucus (D-Mont.) said that, “It’s important that this tax credit does not become a permanent fixture in the tax code. Our amendment would end the credit on April 30 of next year. This extension would get us through the winter — traditionally the worst season for real estate. Our amendment would jump-start the housing market as it enters the summer months of 2010.” Baucus added that the seven-month extension of the tax credit would be “long enough to encourage home buyers to buy homes, but it’s short enough to remain fiscally responsible.”

On Nov. 5, the House approved the legislation by a vote of 403 to 12, less than 24 hours after it sailed through the Senate by a unanimous 98 to 0 vote. Prior to the congressional votes, NAHB sent letters to leaders in each chamber designating passage as a “key vote” due to its importance to the housing industry. In addition, NAHB issued a Legislative Alert earlier last week urging association members to call their senators and representatives immediately and tell them to support the tax credit and NOL carryback because they will preserve and create jobs, stabilize the housing market and provide critical stimulus to the nation’s economy.

Immediately following congressional passage, NAHB Chairman Joe Robson sent a memo to the entire federation citing the importance of this legislation to the housing industry and how NAHB was instrumental in helping to get the bill passed. The communiqué was also delivered to the Executive Officers via the PRx Exchange. Additionally, NAHB issued a press release applauding Congress on extending and enhancing the home buyer tax credit.

“This legislation is the result of months of determined effort by the entire NAHB federation,” said Robson, who noted that the association’s grassroots membership first banded together this summer in a “Revive Housing, Restore America” campaign calling on Congress to focus on housing in order to create jobs and provide the impetus for a full-scaled economic recovery.

The home buyer tax credit and NOL provisions were the two legislative priorities in that campaign. The NAHB leadership continues to work with Congress and various organizations in Washington to urge regulators to adopt policies that will restore the flow of credit builders need to finish projects in the pipeline and begin new ones and end faulty appraisals.

Robson said that NAHB has been “working tirelessly” to build upon the small gains the industry has seen in the marketplace in recent months and has been in continuous contact with the House and Senate.

“During key stages of the campaign, we activated our grassroots network to meet with their lawmakers when they were in their home districts and to visit them on Capitol Hill,” he said. “We have inundated congressional offices with e-mails and phone calls urging senators and representatives from both parties to extend and expand the home buyer tax credit to create jobs, spur home sales, reduce foreclosures, stabilize home values and push housing and the economy to higher ground.”

For more information on the legislation, e-mail Greg Brown at NAHB, or call him at 800-368-5242 x8421.

For Remodelers, Recovery Won’t Mean Business as Usual

With a recovery in the residential remodeling industry slowly moving into view, speakers at the Remodeling Show in Indianapolis on Oct. 27-30 warned that those who expect a return to business as usual are likely to miss out on the opportunities afforded by a marketplace that has been transformed by one of the most bruising U.S. recessions in generations — advice that is also applicable to many small home builders.

“The idea is that we don’t have to think about just surviving,” said columnist and remodeler Shawn McCadden, owner of Custom Contracting Inc. in Arlington, Mass. “There’s a lot of opportunity out there, but things won’t come back to normal.”

Marketing is paramount, speakers advised, not just to get telephones ringing again but to establish a customer base that will provide jobs as conditions improve. Remodelers will be battling for clients, and those who succeed will be running their operations according to standard business practices, they said.

“You don’t need to reinvent the remodeling business,” McCadden said. “Instead, you should adopt the standard way of doing things. How long am I going to continue doing things as I always have before I realize it’s not working?”

In an educational session on getting rid of callers who aren’t likely to become customers and on how to avoid free job estimates, Paul Winans, who ran a successful remodeling business, Winans Construction Inc., in the San Francisco Bay Area for 29 years before selling it in 2007, said that remodelers need to establish systems for running their businesses “that will work even when times are tough.” (For a related story in this issue of NBN, click here.)

“A system-oriented process is something that can operate independently of your day-to-day involvement,” Winans said.

A key challenge for remodelers, the speakers added, will be differentiating themselves from the competition. Emphasizing the quality and value of workmanship isn’t good enough, but marketing experts provided plenty of information on how remodelers can take simple steps to stand out from the pack.

“Why are you different?” Winans asked. “Why should somebody want to buy from your remodeling company? Work on refining your message. If you don’t know it, you can’t expect your customers to know it.”

Presentations at the show also stressed the importance of finding ways to increase profits at a time when consumers are reluctant to spend. In a general session at the conference, speaker Robert Langdon showed how remodelers can increase their profits five-fold by increasing their sales, reducing their expenses and increasing their gross margins. (For a related story, click here.)

With the remodeling market expected to remain fairly quiet into the first half of next year as it turns the corner on the current downturn, remodelers should be focusing their time and energy on preparing their businesses for what lies further ahead, speakers said.

According to the latest findings of the Leading Indicator of Remodeling Activity, which was released late last month by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University, spending on home improvements should begin rising early next year. Spending will, however, still have ample ground to recover, remaining 8.9% below its year-over-year level in the second quarter of 2010.

“Remodeling spending by home owners shows early signs of stabilization,” said Nicolas P. Retsinas, director of the Joint Center for Housing Studies. “While the housing recovery has been erratic, a strengthening economy could produce spending increases on home improvement projects by the second quarter of next year.”

“Favorable financing costs — for those households with access to credit — and a pickup in home sales are producing more opportunities for home improvement projects,” said Kermit Baker, director of the Remodeling Futures Program.

“A generally weak housing market with unstable prices, near record levels of foreclosures and other distressed sales are discouraging households from undertaking nonessential remodeling projects,”
Baker said.

Attendees at the Remodeling Show had the opportunity to hear from several representatives from Case Design/Remodeling on how to change various business practices in order to get the most mileage from the new marketplace emerging from the downturn and target their efforts to the altered mindset of potential clients.

Among them was Mark Richardson, co-chairman of the Washington, D.C. area-based company, who observed that remodelers are up against difficult odds even in good times and prone to failure, largely because of the shortcomings inherent in small businesses that haven’t properly positioned themselves to survive.

Sixty percent of remodeling businesses never make a profit, said Richardson; 81% of them don’t track their profits by market and 64% don’t track profit by product. Most businesses don’t have a written business plan. Sixty-two percent of remodelers don’t track client retention and 64% don’t know their sales conversion rates.

Consequently, roughly two-thirds of remodeling companies fail in their first five years, he said, roughly the same as the 60% failure rate experienced by small businesses overall. However, about 90% of remodelers perish before celebrating their 10th anniversary.

Leveraging the company’s historic data, as Case has done, is a tool that can boost a company’s sales, he said. “Make history an integral part of your business decisions,” he said. “It doesn’t lie, it happened.”

For example, a Harvard study tracing the steady rise of the bathroom from just after World War II, when only half of U.S. homes had an indoor bathroom, to an average of two bathrooms per home in the 1980s, suggested a remodeling opportunity for Case. In the mid 1990s, the company’s gross profits from bathrooms were lagging behind those for other projects, Richardson said.

A group of Case employees was assembled to reinvent its approach to bathrooms, and within 10 years the company's bathroom division was ringing up $10 million in annual sales. Client satisfaction rates were higher for bathrooms than other projects and profits on bathrooms climbed 8%.

Today, American homes have an average of three bathrooms, and the 20-to-30-year lifecycle of the bathroom has declined to 10-to-20 years “because they have become fashion remodeling, not functional remodeling,” he said.

Three years ago, Case was able to devise a significant new sales strategy based on an examination of its repeat business. The company found that after contracting an initial job, largely a smaller project coming in through its handyman division, 18% of its clients went on to a second job within 18 months. Of that 18%, 72% went on to a third project.

The value of inducing its customers to retain Case for a second remodeling job became apparent as a result of this study. “Figure out a way to get clients to do project #2,” said Richardson, “even if you have to start giving away some of your services.”

Richardson added that historical data can be indispensable in setting sales goals. Looking at the actual historical sales data of specific sales persons can help put projections for the coming year on a sounder footing and yield more realistic expectations for revenue.

“By analyzing this historical data, it tells you where to put your spotlight,” he said.

“You have to know where your profit comes from in order to know the right client for your business,” Richardson added, “and you have to know the right size of projects. You can target that client and say no to people who don’t meet the criteria.”

Historical data are also needed to gauge changes in the market. “You have to have the data to know how things have changed,” he said.

Five years ago, for instance, Case was seeing a 1.5% to 2% return rate on direct marketing; today, that figure has dwindled to 0.4%. Looking at the sources of closings, 70% have come from previous clients versus 5% from radio advertising. “Drill more deeply,” he said. “Look at the close rate for different kinds of clients. You might want to look at the sales process a little differently, keeping more in touch with previous clients.”

It would be a mistake, he added, to presume that clients will remember a remodeler for a job well done. “They forget about you,” he said. “You assume they’re your client because they paid you something, but they have no problem hiring someone else” the next time they need some work done in their home. “Let’s keep in touch with clients; it’s probably what works today.”

Another significant statistic for Case derived from historical data: its average sized project this year will be $100,000, down from $200,000 in 2007. “Considering the new world order we’re in, are you looking at strategies differently now?” Richardson asked.

“Marketing and sales approaches are cyclical,” he said. For instance, solar and energy, popular items in the 1980s, are making a comeback. “Some things look like they don’t work at certain times,” he said, “but they can come back to life.”

To determine what sales and marketing strategies will work currently and in the healthier market that is shaping up, Richardson compared remodeling conditions three to five years ago with those of today:

Richardson noted that applying these sales and marketing strategies is “all about getting one out of 10, not 10 out of 10.”

“History does not lie,” he concluded. “In the times we’re in, it’s not the judge and jury. But if you don’t use it, you’re flying blind.”

For information on remodeling resources available from NAHB, e-mail Kelly Mack at NAHB, or call her at 800-368-5242 x8451.

NAHB Looks at Steps to Ensure Appraisers Aren’t in the Dark

In round two of NAHB’s appraisal summit in the National Housing Center in Washington, D.C. on Nov. 3, participants honed in on what can be done to enable builders, lenders and real estate agents to provide appraisers with information they should know in determining the value of a home.

Following up on the meeting — which assembled leaders from major appraisal, lending and housing agencies and federal housing and banking regulators — NAHB will be moving ahead to clarify how builders and others can communicate with appraisers under the Home Valuation Code of Conduct (HVCC) that went into effect last spring.

“At the end of the day, a fair appraisal is what all of us want,” NAHB Chairman Joe Robson told the summit.

The appraisal issue has emerged as one of the top priorities for NAHB leaders as the housing industry struggles to gain momentum and gather sufficient strength to create jobs and support a strong rebound in the nation’s economy.

At the center of the problem, some appraisers have been using foreclosure and other distressed sales as comparables for appraisals without making proper value adjustments for differences in the quality and condition of the new homes they are assessing. Properties involved in distressed sales often are in poor condition due to neglect or deliberate damage.

Real estate agents, among others, can serve as excellent sources of information on distressed sales comps, but have been hindered in their communication with appraisers.

In the first meeting of the appraisal summit on Sept. 21, participants noted that there have been “unintended consequences” from the HVCC, including a perception that interested parties are not permitted to communicate with the appraiser.

Robson said that NAHB was looking for something that its members can used “to dispel some of the myths about who can be involved in the process.”

A good answer to this particular issue, summit participants heard, can be found in sets of Frequently Asked Questions individually issued by Fannie Mae and Freddie Mac to clarify what the code of conduct requires and allows. Both of their FAQs state that interested parties are permitted to communicate with the appraiser to provide information relevant to the appraiser.

The intent of the HVCC is to come to an accurate result, participants were told. As long as the result is not to improperly influence the appraiser, then providing information is appropriate if it helps achieve an accurate valuation.

Another concern for NAHB members, said Sandy Dunn, the association’s immediate past chairman, is appraisers who have been coming from outside the area to appraise properties in local markets they don’t adequately know.

The bottom line, she said, is that it “doesn’t matter where they come from if they know the area in which they are working. They need to know the market.”

The concern over out-of-town appraisers is part of a larger concern over ensuring that appraisers are qualified and experienced, a matter of major importance that took up much of the discussion at the summit.

Education will become increasingly important to enable appraisers to recognize the value of green products as they become a fixture of the new homes that are being produced, Robson noted.

Dunn also cited concerns over the need for creating a process that would enable builders and others to receive a second appraisal when the initial appraisal is wrong. There is currently no consistent process for appealing or questioning the results of an appraisal.

At their first meeting, summit participants discussed the possibility of following the example of the Veterans Affairs (VA) Loan Guaranty Program, which has established a process that requires an appraiser to contact the lender for additional information if it appears the appraised value of a home will not be sufficient.

Unfortunately, broader application of the VA reconsideration process is limited because of the unique structure of that program and the direct relationship between the VA and the appraisers assigned to handle valuations on VA transactions.

The HVCC does not prohibit lenders from requesting a reconsideration of an appraisal in order to correct errors, such as miscalculated square footage or the wrong number of bedrooms. But “many lenders apparently don’t understand this,” said Dunn. “Lenders frequently won’t take on any additional information, and people around the country feel there is no appeals process.”

For more information, e-mail Bill Renner at NAHB, or call him at 800-368-5242 x8597.

Investors See Mortgage Rates Rising as Fed Wraps Up Buys

Some bond investors are expecting mortgage rates to rise as the Federal Reserve finishes its planned purchases of nearly $1.5 trillion in mortgage-related bonds sold by Fannie Mae, Freddie Mac and Ginnie Mae, yet another risk to the fragile U.S. economy. Since the central bank said nearly a year ago it planned to buy up privately held mortgage-related bonds, eventually becoming the largest buyer of mortgage-backed securities, mortgage rates have tumbled to just over 5% from more than 6%. The Fed has already finished the bulk of the purchases, which are expected to end in March. The Federal Open Market Committee last month said it will slow the pace of its mortgage-bond purchases “to promote a smooth transition in markets and anticipates that they will be executed by the end of the first quarter of 2010.” Some investors say other buyers will replace the Fed in the mortgage markets, keeping rates low. “The mortgage rate may drift higher but not markedly so,” said Robert Tipp, chief investment strategist at Prudential Fixed Income Management, which oversees more than $200 billion of bonds. “The Fed is hoping it will be able to slink away from the mortgage-buying program without creating any major waves in the market,” said Tipp. “I think they will generally succeed.” Also, the Fed will continue to be vested in keeping borrowing accessible. If mortgage rates increase significantly — by three-quarters of a percent to 1.25% from current levels — “the Fed would be looking at ways of bringing rates down,” he said. “They won’t stand idly by.” (www.marketwatch.com)
MarketWatch (11/3/09); Deborah Levine

Fed Signals a Rate Rise Is Far Away

The Federal Reserve signaled on Nov. 4 that it was not close to raising interest rates, saying that the economy remained weak even though the recession appeared to be over. The central bank said it would keep its benchmark interest rate at virtually zero, and it made no change to its longstanding mantra that economic conditions were likely to warrant “exceptionally low” rates for “an extended period.” For practical purposes, analysts said, policy makers are still at least six months from tightening monetary policy. The central bank did make a tiny reduction in its effort to prop up the mortgage market. It said it would buy slightly fewer bonds issued by agencies that guarantee home loans — $175 billion, rather than $200 billion it originally expected. But it said the change stemmed from a shortage of such securities. The Fed made no change to its much bigger program to buy $1.25 trillion worth of mortgage-backed securities by the end of next March. (www.nytimes.com)
New York Times (11/5/09); Edmund L. Andrews

From Home Owner to Tenant; Fannie Mae Program Allows Those Facing Foreclosure to Rent Their Home

Under Fannie Mae’s newly announced Deed for Lease Program, qualifying home owners facing foreclosure and not eligible for a work-out solution will be able to stay in their homes as renters. Participating borrowers voluntarily transfer their property deed back to the lender; the lender then leases the house back to the borrower at a market rate for up to a year. After the period is up, there’s a possibility of a term renewal or a month-to-month lease arrangement. To qualify, the home must be the borrower’s primary residence, and they need to be released from any subordinate liens on the property. The borrower also has to document that the new market rental rate doesn’t exceed 31% of their gross income.(www.marketwatch.com)

MarketWatch (11/5/09); Amy Hoak

Report: 11 States Emerging From Recession

Alaska, Idaho, Indiana, Iowa, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, South Dakota and Washington, D.C., are in recovery, according to Moody’s Economy.com. It determines where a state is in the recession based on employment rates, home prices, residential construction and manufacturing production figures. The firm also reported that, as of September 2009, Nevada remained firmly gripped by the worst recession because these indicators were still dropping significantly due to the plunging tourism, gambling and construction industries. The rest of the states, while still in recession, have seen the pace of their decline slow down, or moderate. Many of the 11 states identified as recovering were spared the worst of the downturn because their housing prices stayed relatively stable, said Steven Cochrane, managing director of Moody’s Economy.com. None saw the spike in foreclosures that ravaged Nevada, Arizona, California and Florida. Also, their unemployment rates, while high, have mostly stayed below the national average and have started to stabilize. By contrast, the states slammed by the housing crisis likely have another six to nine months of recession to go, Cochrane said. Industrial states, such as Michigan and Ohio, could also lag in the recovery as the auto industry upon which they rely heavily struggles to reinvent itself. (www.stateline.org)
Stateline.org (11/5/09); David Harrison

Bathroom Work Tops Senior Home Makeover Needs

Making bathrooms friendlier to older home owners tops the list of important projects to help people remain in their homes as they age. Angie’s List has more than a million consumers in its local networks providing their experiences and recommendations of favored contractors and service providers. It polled participating contractors and found that the four most requested bathroom improvement projects were the installation of grab bars in the shower-bath area, replacement of a bathtub with a walk-in shower-tub, installation of bathroom vanities with space underneath to accommodate a wheelchair, and the lowering of electrical switches to make them easier to reach. While cost is always important, the first priority for bathroom safety is that the modifications perform as advertised. NAHB and AARP helped develop a three-day training program that conveys a CAPS (Certified Aging in Place Specialist) designation. They’ve also developed a CAPS locator tool. “Handicap-accessible shower stalls, when converted from tub installations, can range anywhere from $1,8000 to $5,500,” says Dan McClure, from Mansfield, Texas, “again depending on a wide range of materials selections as well as the degree of difficulty in making the renovation to existing structures.” He says toilet change-outs generally range from $285 to $485, and grab-bar installations range from $65 to $95. The total cost of a complete “aging-in-place” bathroom can begin at $10,000 and move up from there. However, like all home projects, the sky’s the limit, depending on personal tastes. Angie’s List heard of one set of grab bars that cost $7,000 just for the bars. (www.usnews.com)
U.S. News & World Report (11/3/09); Philip Moeller

For $490,000 You Get Four Bedrooms and Three Baths in Queens

With so many well-groomed apartments for sale, fixer-uppers are not the darlings of the New York City real estate market right now. But when there is a lot of inventory on the market, the price gap between the renovated and unrenovated often grows. “What you see now,” said Jonathan J. Miller, the president of the appraisal firm Miller Samuel, “is more of a premium placed on renovated space because you have more supply, more choices.” But some buyers look at a wrecked apartment and see an opportunity. Brokers say those buyers are digging through listings and searching for places that, in exchange for “tender loving care,” provide an incentive to buy — a good price, a great location, a spot in a renowned building or an extra bedroom. A classic example of a fixer-upper is now on the market in Queens. The apartment, in a 1922 Jackson Heights co-op building called the Chateau, has four bedrooms and three bathrooms and is listed for $490,000. The apartment has high ceilings, lots of light, a working fireplace and nice original detail. But the floors need to be sanded and polished, the electrical wiring updated and the bathrooms and kitchen gutted. The walls, covered in a variety of elaborate wallpaper, also needed work. The apartment is on the second floor of the six-story building. The same size apartment in better condition on the floor below sold in May for $645,000. According to the broker, Michael P. Carfagna of MPC Properties, the higher-priced unit was renovated with high-end finishes about 10 years ago and has been well maintained since. The people who bought that place, he says, saw the cheaper one upstairs but decided against the hassle of a big project. Rick Wohlfarth, the president of the real estate brokerage Wohlfarth & Associates in Manhattan, says most of his clients aren’t interested in renovating. (www.nytimes.com)
New York Times (11/1/09); Elizabeth A. Harris

Letters to the Editor: Costly Fire Sprinklers Aren't Needed

This is absolutely unfounded and should not be part of any requirement or mandate. It’s just a bureaucratic, political effort to add yet another code that might be more appropriate for hotels and larger apartment buildings. Sprinklers are not needed at all in single-family homes and they impose an additional expense that is just not necessary.

Requirements for fire sprinklers in townhouses and condominiums are understandable because these are multifamily homes. They are not, however, understandable in single-family dwellings.

Not only are sprinkler requirements making it harder for families to afford housing, they are trampling property rights guaranteed under the U.S. Constitution. Now if a home owner elects to put in a sprinkler system, it should certainly meet code requirements.

At a time when the nation is trying to put health care and financial stability within reach of all Americans, it should also be promoting fair housing at a reasonable cost.

Senate Panel Moves Bill to Curb Greenhouse Emissions

Protesting that EPW Chair Barbara Boxer (D-Calif.) would not allow the Environmental Protection Agency to conduct a full economic analysis of the measure, committee Republicans refused to attend the mark-up of the bill.

Of note to home builders, the bill has energy efficiency standards for buildings that are completely different from those in its House counterpart (see June 29 NBN story). The Senate bill would require the EPA, or other agency designated by the President, to set efficiency targets for a national energy code, but it does not specify percentage increases or dates of compliance.

The Senate Energy and Natural Resources Committee also moved separate legislation in July (S. 1462) that takes a different approach to energy efficiency by proposing specific targets: a 30% increase over the 2006 International Energy Conservation Code by 2012 and a 50% increase over 2006 code by 2018. The Department of Energy, however, would be granted flexibility to adjust the 50% target if it determines reaching it would be infeasible.

NAHB expects S. 1462 to be merged with S. 1733 before being considered by the full Senate. It remains unclear what approach, if any, the final Senate legislation will take on residential energy efficiency. NAHB continues to work with Senate staff to address builder concerns with mandatory energy efficiency targets.

Meanwhile, Sens. John Kerry (D-Mass.), Joe Lieberman (I-Conn.) and Lindsey Graham (R-S.C.) are working to craft a separate bipartisan measure that would seek to expand the number of nuclear reactors and oil drilling off U.S. coasts. Many senators are taking a wait-and-see approach to determine whether to support this effort or the bill approved by the Senate committee as the main vehicle for any legislative action on the Senate floor.

Significant barriers remain to reaching the 60 votes needed to pass any cap-and-trade bill through the Senate, and several other Senate committees are expected to take up portions of this bill. NAHB does not expect the full Senate to turn to climate legislation until next year.

To read legislation, click here and enter the bill number in the box at the upper center of the page.

NAHB continues to monitor developments closely. For more information, e-mail Elizabeth Odina, or call her at 800-368-5242 x8570.

NAHB Opposes House Health Care Plan

While members of the House of Representatives last week were embroiled in last-minute deliberations over H.R. 3962, the Affordable Healthcare for America Act, NAHB sent a letter to the legislators supporting their efforts to improve access to quality and affordable health care, but stating strong concerns over the impact this legislation would have on home builders and their employees.

The massive bill to overhaul the health care industry was passed on Saturday, Nov. 7, by a narrow vote of 220 to 215.

NAHB said it was specifically opposed to the broad employer mandate imposed by the bill as the vehicle to provide health insurance or universal coverage to all employees. The letter stated that the employer mandate and minimum benefit requirements stipulated in the legislation would remove “the flexibility for employers to provide health plans that best fit the needs of their workforce."

NAHB also has significant concerns with the surtax on taxpayers with adjusted gross incomes of $500,000 for single taxpayers and $1 million for joint filers as well as the change in treatment of S Corporations and other pass-through entities.

Many small businesses, such as home builders, are structured as pass-through entities and pay for their business taxes at the individual level. “The surtax and pass-through provisions will have significant impacts on these small businesses,” the letter said. “Furthermore, by not indexing the surtax to the inflation rate, the number of home building firms subject to this tax will continue to increase in years to come.”

Noting that NAHB is a strong advocate of universal access to health coverage and encourages a market-based approach over a guaranteed mandate, the letter said that H.R. 3962 fails to include meaningful medical malpractice reforms, preservation of association-sponsored health programs and tax-deferred individual medical savings accounts — methods that NAHB supports to improve the nation's current health care system.

"Unfortunately, as currently drafted, H.R. 3962 does not meet these goals and therefore NAHB must oppose the legislation,” the letter concluded.

To read the legislation, click here and enter H.R. 3962 in the box at the upper center of the page.

For more information, e-mail Carlos Gutierrez at NAHB, or call him at 800-368-5242 x8242.

Spokane Voters Defeat Drastic Changes to City Laws

Voters in Spokane, Wash., on Nov. 3 rejected a ballot initiative that would have radically altered the city charter, would have been bad for local businesses and would have led to higher housing prices.

Proposition 4, the Envision Spokane Community Bill of Rights, was voted down by a margin of 75% to 25%.

“These election results make clear that the people of Spokane don’t want to have a small group of citizens tell them what is best when it comes to the role of government and the way our city should grow,” Streicher said.

Of highly dubious constitutionality, The Community Bill of Rights was comprised of 10 sweeping changes that would have, among other things, demanded that the city administer health care, allowed 15% of voters in a neighborhood to block any growth or changes and eliminated the ability of corporations to defend themselves in a court of law.

“Spokane was chosen for this test, and Spokane has earned an ‘A’ on the test by coming together and saying no to a laundry list of high-risk and high-cost ideas,” said Streicher.

Envision Spokane has indicated that it may attempt to put the proposal back on the ballot, but Save Our Spokane said that it would be a waste of taxpayer dollars to place the initiative before the voters again considering the large outpouring of opposition against it.

“This is it. People are now more aware of what they are signing to get on the ballot,” said Streicher, “and this election proves the overwhelming majority opposes Envision Spokane — or whatever name may be used to try and pass such an effort.”

Useful Links to Monitor Economic and Housing Trends

The following are links to useful information from government agencies and NAHB that will enable you to monitor the housing market.

An on-demand webcast of the 2009 Fall Construction Forecast Conference held at the National Housing Center in Washington, D.C., on Oct. 21 is now available for purchase.

The webcast fee includes access to the webcast archive and electronic copies of the conference handout and presentation materials. Multiple viewers in one office can purchase the webcast for one fee.

The on-demand webcast also gives viewers complete flexibility in their viewing experience — pause, skip forward and backward, or jump directly to your topics of interest. The webcast is available for $250.

To view the webcast schedule, topics of discussion and a list of the presenters, click here.

Subscribe and get downloadable Excel tables that feature the housing starts forecast, gross domestic product (GDP), demographics and more.

Builders' Tip: A More Stable and Handy Step Stool



	Click for larger image.

I’ve been a remodeler and a handyman for more than 20 years, and in that time I’ve really come to appreciate the simple perfection of the little step stool I built.

I made it out of scrap lumber, but the thing I like best about it is its stability.

Because the sides are tapered, the stool is a lot harder to tip over than one with straight sides.

The stool also doubles as a small workbench — providing me with a stable platform for sawing, cutting, painting and hammering.

And at the end of the day, I can flip the stool over and use it as an open box to carry my tools and supplies back to my truck.

Join the ranks of the nation’s top building industry professionals with the Certified Graduate Builder (CGB) designation. The “Builder Assessment Review” (BAR) is your first step towards obtaining the CGB.

This comprehensive assessment measures your expertise in the four key areas of the building industry: building technology, business and finance, project management and sales and marketing.

Your results will show the areas where your knowledge is strongest and weakest and will help determine the courses required for you to obtain your CGB.

To learn where the next BAR will be held, visit NAHB’s education listings, or call the Professional Designation Help Line at 800-368-5242 x8154.

BuilderBooks.com Offers More Than 250 Books That Help You Build Your Business

BuilderBooks.com is your source for training and education products for the building industry. The official bookstore for NAHB, BuilderBooks.com offers award-winning publications, software, brochures and more available in both English and Spanish.

Web Site Content: The Good, The Bad and The Viral

When it comes to upgrading Web sites or creating new ones, many builders concentrate their efforts on graphics, design and programming, what they believe are the most arduous aspects of the process — and overlook the value of content.

Regarding content, they often take the easiest path and simply repurpose the text, images and photos on their existing brochures for their Web site — but that approach will limit your online marketing’s effectiveness.

Nowadays, there are myriad ways that content can be displayed, making content presentation one of the sexiest elements of Web or interactive marketing.

Content today comes in a variety of forms. While well-written text and copy is still an integral ingredient of a successful Web presence, it’s essential for builders to consider using photos, video, motion graphics and the interactive features that are now available online to encourage consumer participation.

First, determine the primary and secondary strategic business objectives of your site. What do you want to accomplish with your site? For example, do you want to pre-qualify leads, generate phone calls or conduct e-commerce using a shopping cart?

Then determine what you want your consumers to experience when they’re visiting your site. A printed brochure, with its pictures and copy, is very straightforward. Putting it online doesn’t change its dynamics.

But with interactive Web marketing, you can create an entirely different experience for your consumers — just like you do every time you build, merchandise and demonstrate a model home.

Copy is a great foundation for your Web site content, but it is important to keep in mind that the Web is a different medium than print publications and therefore requires a different style of writing.

First, don’t write your site yourself. Work with a copywriter who has experience writing for the Web. That way, while your copy will inform consumers about your product, it also will contain important keywords and key phrases so that your site will rank higher in search engine listings — and consumers will find it easier.

As a builder or remodeler, make sure your site includes a great selection of photos of your products or work. Because many consumers have difficulty reading and visualizing floor plans, don’t rely solely on floor plans to show your product. Show them photos of what they are buying, or their expectations will be out of line with the reality of your product.

Hire a professional photographer with experience in interior design photography. He’ll know how to light a room and set up and produce your photos for maximum effect.

You will also be able to use the photos in other marketing mediums such as brochures, direct mail, direct e-mail, even billboards.

Online video is a marketing tool that is growing in popularity, but many businesses haven’t quite grasped its full potential yet. To create your online video presence, don’t just post a recycled 30-second TV spot on your Web site. Just like copywriting, your videos should be crafted especially for your audience.

If, according to your brand and market research, your consumers expect polished and professional images, for instance, produce videos that incorporate voice-overs, use fancy fly-ins and feature a new home consultant speaking to your audience.

If, however, your consumers prefer something a little more down-to-earth, consider producing video testimonials of your existing customers, or better yet, invite customers to enter a contest to create their own video testimonials. Their entries may be unpolished and a bit gritty, but they may be just what your customers want.

Many builders also use online videos to explain the construction process to their customers. When using video this way, keep in mind that your customers will be viewing it — and showing it to friends and family — not only on computers, but also on their handheld devices such as iPhones, so don’t create hour-long videos.

Instead, break the videos up in into segments with each segment recording a particular milestone in the home’s construction process.

Video, by nature, is a viral medium so it’s important — again depending on your customer demographic — to create a video that can be shared. Produce them so they can easily be displayed on a social network like Facebook or simply e-mailed to family and friends.

In summary, don’t create a Web site that is merely a digital version of your brochure. People expect more from online marketing.

To capture their attention, put as much thought, research and effort into the content of your Web site and online marketing as you would to create the words and images for your print, television or radio advertising.

The book covers everything from the home buying process and new home financing to strategies for making better sales presentations and sizing up the competition. It teaches readers how to overcome customers’ concerns and provides specific examples of how to explain the benefits of new home features in customer-friendly language.

“Think Sold” provides insights on how to approach sales and life from a position of optimism that will create successful outcomes; how to improve upon potential customer prospecting and follow-up skills; and how to communicate effectively with various types of buyers and learn how to adjust communication strategies to increase rapport and alignment with buyers’ motives.

“ValueMatch Selling for Home Builders,” available through BuilderBooks.com, presents a selling process that focuses on selling feelings and appealing to prospective buyers’ emotional need to buy a new home in today’s market rather than product.

Learn how to build rapport with prospective home buyers, meet their needs, make powerful presentations that are focused on their values and go for the close.

For additional cutting-edge sales and marketing information, subscribe to NAHB’s Sales + Marketing Ideas magazine (www.smimagazine.com).

Click here to learn about membership benefits of the National Sales and Marketing Council and the Institute of Residential Marketing.

Webinar to Discuss Marketing Tools to Help Prepare for Recovery

Participants in the upcoming webinar, “50+ Housing: Are You Prepared for the Recovery?” will learn about marketing tools that will help them position their company to take advantage of the 50+ market’s eventual recovery.

Sponsored by the NAHB 50+ Housing Council, the hour-long webinar begins at 2:00 p.m. EST on Thursday, Nov. 12.

The webinar is free to NAHB 50+ Housing Council members. The fee is $69 for other NAHB members and $100 for non-members.

In today's increasingly competitive marketplace for active adult home buyers, the integration of online and onsite marketing will be more important than ever. During the webinar, industry marketing experts will share practical ideas and information to help participants achieve greater success through integrated marketing.

For a list of upcoming 50+ Housing Council webinars and to view past webinars, visit www.nahb.org/50pluswebinar.

For more information, e-mail Jeff Jenkins at NAHB, or call him at 800-368-5242 x8292.

Author Margaret A. Wylde guides readers through the latest survey results on this important consumer group and explains what their responses mean for today’s and tomorrow’s home building industry.

“Browsers to Buyers,”available through BuilderBooks.com, delivers the proven methods necessary to develop or improve your online new home sales program.

This essential guide provides an easy-to-follow roadmap leading to a successful online sales program that will help builders attract and capture more qualified buyers.

Remodelers See Encouraging Signs in Third Quarter

Although residential remodelers reported that conditions remained relatively weak during this year’s third quarter, they also saw signs that their market was stabilizing, according to NAHB’s Remodeling Market Index, which was released on Nov. 5.

The current market condition component of the index registered 39.8 for the third quarter, up slightly from 38.1 in the second quarter. Future indicators jumped from 34.2 to 38.7 over the same period. Although this marked the third straight quarterly improvement, both indices remained well below the break-even level of 50 on the index.

The RMI measures remodeler perceptions of market demand for current and future residential remodeling projects. Any number below 50 indicates that more remodelers say market conditions are getting worse than report improving conditions. The index has been running below 50 since the final quarter of 2005.

“Some remodelers are receiving more calls for bids, but it is still extremely difficult to close a sale,” said NAHB Remodelers Chairman Greg Miedema, CGR, CGB, CAPS, CGP, a remodeler from Tucson, Ariz. “Financing continues to be an impediment, with many home owners not able to secure home equity loans or other lines of credit.”

The index for current remodeling market conditions rose in the Midwest to 43.2, up from 38.3 in the second quarter, and in the West from 40.5 to 47.3. They declined in the Northeast from 36.9 to 33.7 and in the South from 39.7 to 38.6.

Remodeler assessments of demand for major additions climbed from 38.2 to 41.9 in the third quarter. Minor additions rose from 41.5 to 43.2, while maintenance and repair remained fairly flat, dropping from 33.6 to 33.1.

The summary index of future market indicators showed greater improvement. Among the components of future indicators, calls for bids jumped from 38.8 to 46.5, appointments for proposals grew from 40.3 to 43.5, the amount of work committed for the next three months climbed from 23.3 to 27.5, and the backlog of remodeling jobs rose from 34.4 to 37.2.

“Remodelers are no longer reporting markets deteriorating to the same degree as earlier in the year, but credit and financing of remodeling jobs remains a huge hurdle to overcome in closing sales,” said NAHB Chief Economist David Crowe. “Inaccurately low home appraisals also hurt remodelers, because they hamper both home equity loans and sales of existing homes that often stimulate remodeling.”

For more information on remodeling resources available from NAHB, e-mail Kelly Mack, or call her at 800-368-5242 x8451.

The publication includes a CD containing 160 essential forms and documents — culled from successful remodelers across the country — that you can customize to suit your business needs.

'How to Find a Professional Remodeler' Brochures Available at BuilderBooks.com

"How to Find a Professional Remodeler," available at BuilderBooks.com, promotes the professionalism of your remodeling business by offering a wealth of valuable advice to customers on the process of selecting a remodeler.

The newly updated brochure highlights the before and after photos of the most frequently remodeled rooms in the house.

Remodelers Need to Focus Harder on Boosting Profits

In a rapid-fire presentation lasting well under an hour, Robert Langdon, a certified public accountant and author of “Managing Your Business for Profit,” provided attendees at the Oct. 27-30 Remodeling Show in Indianapolis with a few specific pointers they can use to give a sizable boost to their bottom line.

One of the top priorities for remodelers and other small businesses, Langdon said, should be devising ways to differentiate themselves from the competition and appeal to the emotions of their customers so they can sell their goods and services at a healthy price.

In today’s harsh economy, price has become a central concern for consumers, and too many remodelers are willing to bid low for jobs, often failing to consider the toll these projects can take on their business. Remodelers can extricate themselves from this situation, he suggested, by adopting a new approach to their customers that will pay even bigger dividends as the industry recovers.

“We don’t want to be the lowest bid when we get the job,” he said. “We want to be profitable.”

Customers will pay more for something they want than for something they need, he said, and the whole point of the sales process is to turn need buyers into want buyers and move price down as a factor on the decision ladder. “The stronger the emotion, the less price is a factor,” he said.

Langdon recounted how one remodeler was able to sell him on emotion and not price when he was in the market for steel security doors for his home. Like consumers in general, he started off shopping for price and was in the process of lining up the recommended three bids, when he encountered a remodeler who provided him with the two most important factors in making his buying decision: these doors would protect his family and the doors would protect the investment he had in his home.

He ended up choosing the contractor who had tapped into his emotional concerns and paid $4,200 for a job that he could have had done for $4,000 from another bidder. “I bought from him because he appealed to me emotionally,” said Langdon, “and he increased his profit by 5%.”

This approach “won’t work all the time, you have to figure out what are the things that will move this person beyond price, but just a 2% increase in margin has the same impact as increasing your sales by 15%.”

“Sales is about telling people about what’s more important than price,” he said. And he cautioned remodelers never to quote a price to an unsold buyer. At that point, “you’re done selling and you’re now negotiating.”

Contractors who haven’t figured out their marketing advantages, he said, need to sit down with their staff members and list five ways their company is different from the competition. Like other speakers at the show, Langdon said that superior quality and excellent service, while highly desirable in any remodeling job, are worthless in distinguishing one contractor from another. “You must be specific about how you are different,” he added.

Remodelers need to take charge of the sales discussion, he said, and that means they should be the ones asking the questions, not answering them. “Take control of the conversation by following up with your own question,” he advised. “Is it important to you that this happens?”

Direct the purchase decision toward your contracting services, he said. “Ask the right questions” and let them know that you’re the solution. “If they say this and this isn’t important, they’re saying price is important. If you get the wrong answers, you don’t need us because what’s important to us is not important to you.”

Using the example of a hypothetical company starting out with $600,000 in annual net sales, $400,000 in construction costs, a $200,000 gross margin, $75,200 in variable expenses, $112,800 in fixed expenses and $12,000 in net income before taxes, Langdon next demonstrated how remodelers can increase their profits five-fold by increasing their sales, reducing their expenses and increasing their gross margins.

Increasing sales by 15% the next year to $690,000 results in $30,720 in net pre-tax income. Increasing the margin just over 2% by selling the same amount of work for a slightly higher price, with sales totaling $618,720, results in the same profitability. And reducing variable expenses by 3% produces the same net income.

Of the these three alternatives for increasing profits, the 2% margin increase is the best, but truly superior results can be had by achieving all three simultaneously, he said.

Remodelers will be pretty much locked in on their fixed expenses, which can be defined as costs that don’t vary with volume within a relevant range of activity, such as rent and equipment depreciation. They need to be watched, because once they go higher, it’s difficult to make them drop lower.

On the expense side, when the market turns soft, the first thing remodelers should do is stop adding to their infrastructure, he said. Once market conditions begin to improve, as they generally appear to be doing now, “raise your prices when demand gets stronger. If that works, raise them again.”

Remodelers should have their eye on reducing their labor costs, which are likely to be their largest controllable expense. The aim should be to boost worker productivity, which can be accomplished by restructuring to more efficiently utilize employees, by observing and training and by better managing.

When examining their profit and loss statements, most businesses, Langdon added, will find that 20% of their expense categories account for 80% of their business, and their efforts to cut costs should be trained on these major expense categories.’

Remodelers should set their sights on working “for the discriminating home owner who understands why your product is worth more,” Langdon said, and their message to prospective customers should be, “‘I’m doing this project at a fair price, but I’m expecting to make a reasonable profit.’ Search for customers who understand that for relations to work, both parties must get something.”

For information on remodeling resources available from NAHB, e-mail Kelly Mack, or call her at 800-368-5242 x8451.

The publication includes a CD containing 160 essential forms and documents — culled from successful remodelers across the country — that you can customize to suit your business needs.

'How to Find a Professional Remodeler' Brochures Available at BuilderBooks.com

The newly updated brochure highlights the before and after photos of the most frequently remodeled rooms in the house.

Screening Out ‘Tire Kickers’ Builds Profitable Relationships

Remodelers who know how to screen prospective customers over the telephone can get rid of “tire kickers” who are unlikely to sign up for a job, Paul Winans, a remodeler in the San Francisco Bay Area for 29 years before he sold his business in 2007, said at an educational seminar during the Remodeling Show in Indianapolis on Oct. 27-30.

In the brief 20 minutes or so it takes to interview the prospect over the phone, remodelers can not only ensure that they are talking to the type of person who is good for their business but they can take a major first step in establishing the trust that is vital in seeing the job successfully through to completion and adding to the base of previous customers who are a major source of future sales, according to Winans.

“You don’t want to walk into somebody’s house and feel like you’re the floor show — the seventh remodeler who’s been there,” Winans said. “You don’t need to be entertaining these people. They definitely don’t care about what you’re selling.”

With a lead sheet in hand, the remodeler should start with a series of questions that will eventually determine if the person on the other end of the phone is a suitable customer.

“The more clarification questions you ask, the more likely you are to know if you should go visit the lead and that they are someone interested in the services your company performs,” said Winans. Ask “whatever you need to know to determine if they will be a potential client. If they don’t like to answer questions, refer them to the competition.”

On the phone, the remodeler can expect the prospective client to be scared they don’t know the correct questions they should be asking. The remodeler’s or intake person’s job during the interview process is to make them feel warm and comfortable.

Asking where they live is a good place to start to determine whether their home is located in the area where you want to work, he said. Remodelers should know what areas are best and where they can find their best customers.

What kind of work they are looking for is also important, he said, to see how it matches up with your capabilities, followed by what is their ideal date for completing the job and what they are looking for in a contractor.

As the interview continues, the lead intake person should be delving further to gain some insight into the deep emotional reasons — or “pain” — that are at the root of the desire to get the job done. “What’s wrong with your home? Why are you thinking about doing this project? Ask over and over,” said Winans, because the closer the remodeler gets to establishing the emotional reason for the job, the less the home owner will be focused on price.

“Everybody likes to be asked clarification questions,” he said. The person on the phone will measure “the yahoo” who already visited their home “against all of the questions you ask.”

“You also need to know about their budget even if the person is uncomfortable talking about it,” he said. Ask them for their “investment amount” or for the amount they have set aside to improve their home, which is their biggest investment. Find out what they need and their point of reference for what the job should be.

“You are breaking down barriers, becoming a consultant, not a sales person,” Winans said.

“Make sure the ‘pain’ problem is understood,” he added. “Otherwise, price is everything.” The remodeler should become part of the process of easing the pain. If a kitchen is being discussed, ask what the floor plan is now and what they want it to be. “How about the cabinets? What do you want them to be? Why? And price goes to the bottom of the list.”

At this point the remodeler can throw out a ballpark figure of what they think the cost of the job will be, higher than the likely final cost but still close to it. “You will find their budget out even if they don’t tell you initially. When you work the pains, you build a relationship by using the information” they have provided to help you determine if their project is feasible or not.

“When you’re on this call, show up and be present,” Winans advised, “and don’t be thinking about the next thing you’ll be doing.” If it looks like it’s worth moving forward, ask when you can get started and work together on a timetable. “The intake person has to have a clear idea about goals,” he said.

Winan reminded his audience that “people buy relationships. They don’t buy remodeling. They want to feel good about who they’re doing business with. Trust is how you make the sale,” and in a telephone interview that has gone well the customer will have gone from being scared at the start to being trusting by the finish.

“You are not selling fine joinery,” he said. “Everybody sells quality.” The remodeler’s goal in this conversation is to convince the person on the phone that they understand their needs more than anybody else.

“Our goal is to be regarded as a resource,” he said, “and we’re not meant to serve everyone’s needs.”

Consumers will probably want to get three different bids because that is what they have learned is the smart way to proceed, but Winans described a different approach that is both more effective and avoids having to provide a “free” estimate.

He suggested asking the client, “Would you be interested in hearing about an alternative way of selecting your contractor than just focusing on price?” Provide them with specific questions they should ask other contractors they will be interviewing. Tell them to check references on the contractors they might consider hiring, and ask for references over a period of time. “You are positioning yourself as an adviser,” he said, and pulling back, which motivates people to move toward you.

“Ask them their idea of a preliminary ballpark number,” he said. “Ask them to prepare a proposal that won’t be a free bid” but set the stage for some problem solving and advice before the contract. “If they say yes, you sold the job. Now you have a partner, opposed to an adversary.”

Give the potential client time to check three references, and then get back to them and ask how things have been going.

“Times are tough, but try something different,” Winans said. “People don’t know what they need to know in order to make an intelligent buying decision,” he said, citing an observation by Harry Beckwith in his book, “Selling the Invisible.” “You need to help them.”

“Find out what your clients are really buying,” he said. “Clients are experts at knowing if they’re valued. They’re buying a relationship.”

Information that is collected in the sales and marketing process needs to be managed and tracked,” Winans said. “To know what works, you need to track where the leads and sales come from.” And tracking your leads shows where you should be making your marketing investment and where you should concentrate your visits. “Mine the data and find the trends.”

Sixty percent of a remodeler’s business typically comes from repeat business or client referrals, so it’s a good idea to call five of your best customers each week, checking up on them and surveying their needs, he said.

Remodelers should also be focusing on their brand, which is “what people think about when they hear your company’s name.”

“You have a brand whether you are working on formulating it or not,” Winans said. “Your reputation is created whether you worked on it or not, so take control of the process.” Sell yourself as the remodeler who can help home owners who don’t know what to do and who leaves them feeling “glad I hired your company.”

If you can find a good trainer, Winans recommended providing Sandler Sales training for everyone in the company.

He also recommended putting “The E-Myth Contractor” by Michael Gerber on your reading list and investigating the resources of remodelersadvantage.com.

The publication includes a CD containing 160 essential forms and documents — culled from successful remodelers across the country — that you can customize to suit your business needs.

'How to Find a Professional Remodeler' Brochures Available at BuilderBooks.com

The newly updated brochure highlights the before and after photos of the most frequently remodeled rooms in the house.

Webcast Course on Dec. 10 to Teach Customer Service Skills

For the first time, The NAHB University of Housing is offering a webcast of its Customer Service course on Thursday, Dec. 10. The course will be held from 10:00 a.m. to 6:00 p.m. EST, at the National Housing Center in Washington, D.C.

Participants can attend the course in person or watch it during the live webcast by registering on the NAHB Web site at www.nahb.org/Customer.

Several local home builders associations also will be showing the live webcast, and particpants can contact the particpating HBA to register, as well. A complete list of participating HBAs will be available soon.

The Customer Service course teaches participants how to manage every phase of customer interaction — from initial contact through construction, the warranty period and beyond.

Designation credit is available for CGA, CGB, CGR and Master CSP. Continuing education credit is available for CAPS, CGA, CGB, CGR, GMB, CSP, Master CSP, CMP and MIRM.

Beverly Koehn, CAPS, CGA, CGB, CSP, GMB, MIRM, of Beverly Koehn and Associates, based in San Antonio, a sought-after consultant and speaker with more than 20 years of experience in sales and customer care in the real estate industry, is the instructor.

For more information, e-mail Maria Nande at NAHB, or call her at 800-368-5242 x8435.

Comments Sought on Proposed Changes to EPA Lead Paint Rule

NAHB remodelers are urged to comment on a recent proposal by the U.S. Environmental Protection Agency that would add more requirements and costs — and subject the remodeling and renovation of an estimated 40 million additional homes — to the lead paint regulations that will go into effect in April 2010.

The proposal, a result of the EPA’s recent settlement with environmental advocates, would remove the “opt-out” provision in the Lead: Renovation, Repair and Painting rule governing remodeling activities in homes and child-occupied facilities built before 1978 that are more likely to contain lead.

Members who wish to send comments to the EPA can download and complete a letter template created by NAHB. The link is available to NAHB members only.

Members who have noticed an impact on their business from the new lead paint regulation and wish to submit information for the NAHB comment letter are urged to e-mail Matt Watkins at NAHB with details; or call him at 800-368-5242 x8327

By April 2010, remodelers and other contractors doing work in homes affected by the new rule must pay a $300 fee to certify their firms, have a trained and certified lead renovator on staff, educate home owners, contain and clean up dust, conduct a final dust wipe to confirm cleaning, and maintain records of all the work done.

The rule also currently allows an “opt-out” provision for homes without children under six and pregnant women as residents. If the proposal to remove the provision is accepted, all pre-1978 homes will be subject to the rule.

The EPA is seeking alternatives to a complete removal of the opt-out provision, such as not requiring it for exterior renovations; allowing it as long as prohibited practices are not used (such as using heat to melt paint or high-speed grinders); or allowing home owners to opt out after the home is tested.

The EPA is also collecting cost estimates on how the rule will affect remodelers, including specific examples and suggestions for reducing the costs of the rule.

Additional proposed changes to the rule include a requirement for remodelers to give the home owner a compliance checklist document to add to their home records that can be passed on to future owners. The checklist would describe the sections of the home renovated and details on rule compliance.

The EPA is also proposing to make July 15, 2015 the initial training expiration date for all certified renovators who obtain training prior to July 2010, removing the current disincentive to get trained early.

Also, the EPA suggests making becoming a certified trainer easier by reducing required lead paint training for primary instructors from 16 to eight hours.

The full proposed amendment was published in the Federal Register and can be downloaded in PDF format.

For more information on the current rule, including obtaining training and certification, visit www.nahb.org/leadpaint.

Apply for SAFE Work Site Safety Award by Nov. 18

Home builders who have developed and implemented an outstanding work site safety program can receive recognition for their commitment to the well-being of their employees through the 2009 NAHB Safety Award for Excellence (SAFE). Nominations and applications are now being accepted.

For information, requirements, a list of categories and an online application, click here. The nomination period closes on Nov. 18.

The SAFE award honors the achievements of builders and trade contractors who have developed and implemented high-quality construction safety programs, as well as government officials and NAHB associations that have made successful efforts to advance safety in the home building industry.

In front of a capacity crowd during the International Builders’ Show in Las Vegas last January, the 2008 SAFE awards honored 13 companies and individuals for their safety achievements. Click here to watch a video recognizing the recipients.

NAHB member companies in good standing that build residential homes or town homes using light construction methods can apply for a SAFE award.

Specialty trade contractors, remodelers and light commercial and multifamily builders — as well as NAHB-affiliated associations and federal or state Occupational Safety and Health Administration (OSHA) officials — are also eligible for the award if they are nominated by an NAHB member or association.

To see sample application forms, including descriptions of evaluation criteria and information required for nominations, click here.

The award also provides an opportunity for companies to provide sponsorships and demonstrate their support for safe work site practices. For sponsorship information, click here; or e-mail Andy Flank at NAHB, or call him at 800-368-5242 x8059.

NAHB provides members and others in the residential construction industry — including non-English and limited English-speaking employees and trade contractors — with information, guidance and access to training resources to help them protect employees' health and safety.

For more information on the SAFE awards or NAHB safety training programs, e-mail Lindsay Cather at NAHB, or call her at 800-368-5242 x8163.

The 30-minute “Fall Protection Video, English-Spanish” can be used by builders to train workers to use safe work practices that eliminate fall hazards and comply with OSHA fall-protection standards.

The “NAHB-OSHA Fall Protection Handbook, English-Spanish” provides guidelines for creating a written fall-protection plan and identifying safe work practices that can prevent costly accidents and injuries. Written with clear text, photographs and illustrations, the book serves as a user-friendly resource for promoting safety on any job site.

Leaders in Systems-Built Housing Honored


	Signature Building Systems, in Moosic, Pa., won a best modular home design for its Masterson Project home during the BSC Excellence in Home Design Awards program last month.

During its annual awards program last month, NAHB’s Building Systems Councils (BSC) honored more than 20 industry leaders in the concrete, log, modular and panelized building systems industries for their excellence in home design and marketing. Home manufacturers, home builders and industry associates in each of the industries were honored.

The winners were announced at the BSC Excellence in Marketing and Home Design Awards luncheon in Marco Island, Fla., held in conjunction with the BSC SHOWCASE — the leading trade show and conference for the systems-built housing industry.

"This year's award winners prove that even in a slow housing market, the systems-built industry is raising the bar in residential marketing and home-design concepts," said BSC Chairman Michael H. Weber, of Lancaster Redevelopment Corp. in Selinsgrove, Pa. "Not only are our award winners receiving recognition for their great work, but they are also shedding a positive light on the building-systems industry as a whole."

Scores of entries were submitted for award categories ranging from outstanding model/sales center to presentation of home plans and best Web site. The most competetive category this year was also one of its newest — multifamily modular homes. Penn Lyon Homes, based in Selinsgrove, Pa., earned top honors in the category. Southern Structures, of Ocala, Fla., earned an honorable mention for its modular workforce housing homes.

Some of the winners will be featured in upcoming editions of Nation's Building News and on display at the BSC Awards Wall at the 2010 International Builders' Show in Las Vegas in January.

Explore Latest in Global Green Building at Expo Build China

Building industry professionals can see the latest in high quality international green building materials and design at Expo Build China 2010, one of Asia’s leading building, ceramics and design shows and featuring more than 1,600 exhibitors.

Expo Build China will be held at the International Expo Center in Shanghai on March 29 to April 1.

Building and construction activity worldwide consumes three billion tons of raw materials annually — 40% of raw material consumption. Using green building materials promotes global conservation of dwindling non-renewable resources, according to expo planners.

Expo Build China will showcase green building materials — including doors, windows, ceilings, roofing, floor coverings, coating, lights, wooden materials and more.

In addition to seeing new products and technologies, attendees will have the opportunity to meet green building product and equipment manufacturers, architects, interior designers, developers, contractors, distributors and engineers.

Nominations for 2009 Designee of the Year Awards Due Nov. 13

To be eligible to receive a Designee of the Year Award, candidates must be active designation holders and in good standing. Members of the designations’ governing bodies and home builders association staff members are not eligible.

“Our Designees of the Year exemplify the most esteemed qualities of our industry,” said Benjamin Graham, GMB, of The Graham Companies in Middleburg, Va., and chairman of the NAHB Education Committee. “They give to their communities through mentorship, influence and innovation. In everything they do, they elevate the image of NAHB’s designations and housing professionals. They are setting a tremendous example for the rest of us to follow.”

The Designee of the Year Award winners will be selected by the respective governing bodies based on criteria set for receiving each award, including a review of the answers to the questions and the support documentation submitted.

Nominations for the awards may be made by any person or organization actively participating in the respective designation program. Self-nominations are also accepted.

To register for the reception online, visit www.nahb.org/designationreception. Attendees also can register by fax. To access the registration form, click here, and fax it to 202-266-8501.

2009 graduates will receive complimentary attendance if they register by Dec. 29.

For more information, e-mail Maria Nande at NAHB, or call her at 800-368-5242 x8435.

Education Calendar

See the variety of professional development offerings available through NAHB and its local associations in this interactive brochure.

Tougher Storm Water Regs Prompt NAHB Study

A committee of NAHB environmental experts is studying the regulation of post-construction storm water management permits, which are beginning to affect home builders and developers as the U.S. Environmental Protection Agency reauthorizes certain permitting programs.

The group is being formed just as the EPA has released an information collection request to gather facts from construction site operators, municipalities and states in anticipation of developing a new rule for managing post-construction storm water runoff from newly developed and redeveloped sites

At issue are how much responsibility builders or developers should reasonably have for the site after it is built out and how any storm water management programs should be financed.

While home builders have long been responsible for managing the water, sediments and other materials that can create runoff from job sites following a rainstorm, their responsibility traditionally has ended once they turn over the development and control of infrastructure — including sediment control ponds — to the local government authority or home owners association.

Now, more extensive regulations are appearing in some localities and for some watersheds, builders report. Two years ago the federal government began requiring all new or redeveloped federal properties to maintain the predevelopment hydrology, pH and temperature of storm water leaving the site after the development is completed.

In addition, more state and local governments are encouraging or even requiring low-impact development techniques, such as rain gardens or other special plant areas designed to absorb excess water. These systems often need regular maintenance to continue to work effectively, and the long-term costs of such maintenance remain unclear.

Committee members will also discuss plans put forth by EPA regional offices to regulate impervious surfaces and federal proposals to improve water quality in the Chesapeake Bay watershed, which are expected to provide a model for other watersheds in the nation.

The committee is expected to report its findings during the Environmental Issues Committee meeting at the International Builders’ Show in January.

For additional information, e-mail Susan Asmus at NAHB, or call her at 800-368-5242 x8538.

The publication has been prepared to help builders comply with the U.S. Environmental Protection Agency's storm water requirements, and includes information on state permitting programs and more than 50 of the most commonly used best management practices.

Also included are tips on compliance, including how to handle visits from inspectors.

Internet, Conferences Help Builder Maintain Green Edge

Award-winning green builder Don Ferrier, of Ferrier Custom Homes, based in Fort Worth, Texas, relies on the Internet, conferences and his customers to stay abreast of the latest information about green building, energy efficiency and building science in order to meet consumer demand for green homes.

The information also helps him keep up with increasingly stringent energy codes.

Ferrier, who has been building energy-efficient homes since 1982 and has won numerous EnergyValue Housing Awards (EVHA) and National Green Building Awards, said he continually searches myriad sources for new information that he can use to develop new ideas and hone his company’s building techniques in order to maintain an edge over his competition.

Because “green building information is exploding,” Ferrier said, sifting through all the information available online to find those really valuable nuggets can be challenging.

One source of information that Ferrier finds particularly useful is the online NAHB Green Scoring Tool of the National Green Building Program. “When we go through the scoring process step by step, I discover details that I never thought of before, and some are very easy to implement,” Ferrier said

He said he also finds the EnergyValue Housing Award program beneficial, not only because of the market differentiation it provides program winners, but because it enables him to network and share advances in green building with other EVHA builders.

Heather Ferrier, general manager at Ferrier Custom Homes, said the EVHA application process is also an effective learning tool. “It’s a great process to go through to ensure that every level of energy-efficiency is installed and performing as we specified,” she said. “The award’s documentation process is lengthy, but it provides benchmarks to help guide our process.”

Don Ferrier also finds conferences on green building and energy-efficiency great sources of information. While he admits that he serves as a presenter and expert speaker at many of the conferences, he attends as many sessions of interest as he can. “There is always something to learn when you see what others are doing,” he said.

Another information source that Ferrier finds valuable is the U.S. Department of Energy’s Building America program.

Some ideas Ferrier garnered from the program are simple — such as making his trade contractors responsible for flashing and sealing any building envelope penetrations that they make. Until implementing the suggestion from Building America, the builder would do the repair work needed.

“Now, if a plumber puts a hose bib through a wall or an electrician runs power to an air conditioning compressor, we supply the details and they are responsible for the work,” Ferrier said.

One other source of information Ferrier finds valuable is his clients, who come to him with ideas and suggestions for their homes. He doesn’t dismiss a customer’s idea outright; he’d rather “look at it and see if it makes sense.” To compensate for the exploratory time, however, Ferrier charges for estimates and offers clients design services for an hourly fee.

For more information about the EnergyValue Housing Award and its winners, visit www.nahbrc.org/evha, contact the NAHB Research Center online or call 800-638-8556.

“The National Green Building Standard,” available through BuilderBooks.com, provides “green” practices that can be incorporated into multifamily and single-family new home construction, home remodeling and additions and site development.

The standard covers lot design, resource, energy and water efficiency; indoor environment quality; and owner education.

Currently the first and only ANSI-approved green building rating system, the National Green Building Standard is the benchmark for green homes.

The Certified Green Professional (CGP) designation teaches builders, remodelers and other industry professionals techniques for incorporating green building principles into homes using cost-effective and affordable options.

Earning the CGP demonstrates to clients and peers your commitment to the best and latest in green building practices and techniques. More than 4,200 people have earned the CGP designation to date.

“Build Green and Save: Protecting the Earth and Your Bottom Line,” available through BuilderBooks.com, is a comprehensive, easy-to-read reference that shows builders how to identify and select green building materials; implement green construction techniques; explain the benefits of green housing and offer affordable green building solutions to consumers; and use resources wisely and reduce water and energy consumption.

Whirlpool Readies Home Appliances for Smart Grid

This feature is solely for educational and informational purposes. Nothing on this page should be construed as policy, an endorsement, warranty or guaranty by the National Association of Home Builders of the featured product or the product manufacturer. The National Association of Home Builders expressly disclaims any responsibility for any damages arising from the use, application or reliance on any information contained on this page.

NAHB-Produced Programs on the DIY Network

The NAHB Production Group produces weekly television shows for consumers on the DIY network. The following is the latest lineup:

HGTV is seeking developers, builders and architects to create the 2010 HGTV Dream Home, the grand prize in the network's annual sweepstakes. To learn more, click here.

The NAHB Production Group is a full-service, self-contained, media production unit creating programming for cable television, broadcast television, non-profit, museum and corporate clients. Productions range from magazine format shows for general audiences to museum-installation videos for specialized use.

The production group includes award winning journalists, writers and photographers with experience in broadcast, documentary and corporate television.

Evans Scholarships Boost Students' Studies

Recipients of Lee S. Evans/National Housing Endowment Scholarships for the 2009-2010 academic year have used their funds to advance their careers in residential construction by taking additional construction- and management-related courses and needed books and supplies, several scholarship winners reported recently.

The Lee S. Evans Scholarships award graduates and undergraduates pursuing degrees in residential construction management in two- and four-year colleges and universities up to $5,000 each year.

Founded in 1993 by Lee and Virginia Evans, the Lee S. Evans Scholarship has awarded more than $475,000 to more than 170 students across the country.

Scholarship determinations for the 2010-2011 academic year are now in progress. The Evans Scholarship Committee — co-chairs Brenda Eid, founder of BJ Eid Associates, and Carole Jones, of Robert R. Jones Associates; and members William Hauke, of Hauke Building Supply; Mark Lee Levine, of the Burns School of Real Estate and Construction Management at the University of Denver; Bruno Pasquinelli, of Pasquinelli Construction Co.; Roger Reinhardt, executive vice president of the Home Builders Association of Metropolitan Denver; and Chuck Shinn, of Shinn Associates — will determine the scholarship winners. The winners will be announced in February.

The National Housing Endowment recently announced that builder consultant Lee S. Evans, who along with his wife, Virginia, founded the Lee S. Evans Scholarship in 1993, died of pancreatic cancer on Nov. 7. He was 92.

A resident of Nederland, Colo., Evans advised countless builders on their businesses through seminars and personal consulting for more than four decades as the founder of the Lee Evans Group. He was an honorary trustee of the endowment and was inducted into the Housing Hall of Fame in 1988.

FedEx Offers Big Savings on Shipping Till Nov. 15

Now through Nov. 15, NAHB members are eligible for discounts of at least 60%* on select FedEx shipping services:

Members who are current FedEx customers only have to enter the passcode to receive their savings. They do not have to open a new account.

For questions or additional information, call 1-800-MEMBERS (800-636-2377) between 8:00 a.m. and 6:00 p.m. EST Mondays through Fridays to speak to a dedicated member service representative.

For the most up-to-date details on the Member Advantage discount program and all of the participating companies, go to www.nahb.org/MA.

Earn One Free Hertz Rental Day for Every Two Hertz Rentals

Now through Jan. 31, NAHB members who rent a mid-size vehicle or larger from Hertz for two days or more will earn 300 Hertz #1 Awards® Points. Then, after every two qualifying rentals, they will receive 600 Points — enough to redeem for a Free Rental Day.

Members also will earn one bonus point for every dollar spent in addition to this bonus. Also, Hertz #1 Club Gold® Five Star® or Hertz #1 Club Gold® President’s Circle® members will earn additional point bonuses on top of this special offer. Awards points are flexible.

There’s no limit to the number of times members can rent or the points they can earn and use whenever they want, Points can be redeemed for longer rentals and larger cars.

Advance reservations are required.

Earning Free Rental Days Is as Easy as 1-2-3

For the most up-to-date details on the Member Advantage discount program and all of the participating companies, go to www.nahb.org/MA.

Authorization Process for GM’s $500 Offer Now Much Easier

The authorization process for NAHB members to receive $500 towards the purchase or lease of most new GM passenger cars, light-duty trucks, vans and SUVs — whether for business or personal use —just got easier.

Members who want to purchase or lease a new 2008, 2009 or 2010 model year Chevrolet, Buick, Pontiac, GMC or Cadillac passenger car and light-duty truck, van or SUV can simply go to the NAHB Web site to for the authorization information needed to participate in GM’s $500 exclusive offer

The GM offer can be combined with most retail national and regional incentives in effect at the time of delivery.

The offer excludes Cadillac CTS-V, Chevrolet Camaro, Chevrolet Corvette ZR1 and Hummer, Saab and Saturn vehicles, and medium-duty trucks are also excluded.

For more information about the GM program, as well as all other member discounts, visit www.nahb.org/ma.

Calendar of Events

See the variety of professional development offerings available through NAHB and its local associations in this interactive brochure.

Nation's Building News Online: November 9, 2009

Home Buyer Tax Credit, New NOL Rules Signed Into Law

For Remodelers, Recovery Won’t Mean Business as Usual

NAHB Looks at Steps to Ensure Appraisers Aren’t in the Dark

Investors See Mortgage Rates Rising as Fed Wraps Up Buys

Fed Signals a Rate Rise Is Far Away

From Home Owner to Tenant; Fannie Mae Program Allows Those Facing Foreclosure to Rent Their Home

Report: 11 States Emerging From Recession

Bathroom Work Tops Senior Home Makeover Needs

For $490,000 You Get Four Bedrooms and Three Baths in Queens

Letters to the Editor: Costly Fire Sprinklers Aren't Needed

Senate Panel Moves Bill to Curb Greenhouse Emissions

NAHB Opposes House Health Care Plan

Spokane Voters Defeat Drastic Changes to City Laws

Useful Links to Monitor Economic and Housing Trends

Builders' Tip: A More Stable and Handy Step Stool

Web Site Content: The Good, The Bad and The Viral

Webinar to Discuss Marketing Tools to Help Prepare for Recovery

Remodelers See Encouraging Signs in Third Quarter

Remodelers Need to Focus Harder on Boosting Profits

Screening Out ‘Tire Kickers’ Builds Profitable Relationships

Webcast Course on Dec. 10 to Teach Customer Service Skills

Comments Sought on Proposed Changes to EPA Lead Paint Rule

Apply for SAFE Work Site Safety Award by Nov. 18

Leaders in Systems-Built Housing Honored

Explore Latest in Global Green Building at Expo Build China

Nominations for 2009 Designee of the Year Awards Due Nov. 13

Education Calendar

Tougher Storm Water Regs Prompt NAHB Study

Internet, Conferences Help Builder Maintain Green Edge

Whirlpool Readies Home Appliances for Smart Grid

NAHB-Produced Programs on the DIY Network

Evans Scholarships Boost Students' Studies

FedEx Offers Big Savings on Shipping Till Nov. 15

Earn One Free Hertz Rental Day for Every Two Hertz Rentals

Authorization Process for GM’s $500 Offer Now Much Easier

Calendar of Events