Builder Opens Door to Home Customizing : Construction: Fieldstone Co.’s ‘home-fitting’ program allows buyers to alter designs, an option not usually available with houses starting at $200,000. Competitors are taking notice.
Fieldstone Co., the second-largest home builder in Southern California, is noted for a lot of strengths as a developer, but custom design is not among them.
Co-founder and Chairman Peter Ochs, a former president of William Lyon Co., has said that he leaves experimentation to others and concentrates on delivering customers a well-built home at a competitive price.
So far, the strategy has worked. The 12-year-old Newport Beach company routinely is rated an industry leader by analysts measuring quality and value, and often has anxious potential buyers camping out at its sales office--a rare sight elsewhere during the recession.
But competitors are noticing Fieldstone these days for a pilot design program it introduced at two developments planned along a Mission Viejo hilltop.
Called “home-fitting,” the experiment lets middle-income buyers to customize their new houses to a degree previously available only to those buying houses valued at $400,000 or more.
Robin and Jeffrey Cohen, the first buyers in Fieldstone’s development of $200,000 to $262,000 homes, have used the program to add a laundry chute from the master bedroom upstairs to the downstairs laundry room; eliminate windows on either side of the family room fireplace--she didn’t like the view of the neighbor’s wall; change the brick fireplace to tile; add ceiling fans in most rooms and transform the three-car garage into a two-car garage and a hobby room.
Because Fieldstone will do all the changes during initial construction, the extra $4,000 cost is about half of what the couple would pay if they had to hire a remodeling contractor after moving in.
In today’s sluggish market, when buyers are scarce, the program is sure to spawn imitators. Already, Fieldstone officials have conducted tours of the site for half a dozen of the company’s competitors. Each visiting crew receives a thorough explanation of how the program works.
“We’re quite willing to share what we are doing,” Fieldstone project manager Paul Johnson said. “We very much favor anything that improves the industry.”
Fieldstone officials say they like the pilot project, which is also being tested in San Diego and Riverside counties. But they have not completed any of the homes ordered and don’t have enough experience with the costly structural changes involved to decide whether to begin offering it in all its developments.
“It’s something that is frightening to a builder. We start making these changes and the buyer walks away, we’re stuck with a customized house that might not appeal to other buyers,” Johnson said. “But we feel that if it is something that pulls buyers into our homes and encourages them to sign a deal, it’s probably going to be worth it.”
Building industry marketers suggest the program is likely to be effective.
“It is exactly the kind of thing buyers tell us they are looking for,” said Robert Mirman, president of National Survey Systems.
The Irvine consumer surveying company conducts an annual statewide study of home buyer preferences.
“People are telling us that they are staying in their homes longer and longer, so they want them to be something special,” Mirman said. “They want personalized touches and they want the flexibility that lets them have a home they can work in and play in and grow in.”
The customizing program, Mirman said, “looks like a real attempt to meet consumers’ needs for houses in the middle price ranges that are unique to the buyer.”
But even if the Fieldstone program is a success, a lot of builders will shy away from a customizing program “because they don’t want the expense and trouble it involves,” Mirman said. “You really have to work with customers individually and spend a lot of time to do it right.”
Julie Newcomb, president of Costain Homes in Newport Beach, said her company is one that probably will not be copying Fieldstone. “It’s a good marketing tool, and it is a great idea in down times when you are struggling for buyers,” she said. “But ultimately, they’ll probably find themselves losing money on it,” because of the administration costs and the difficulties of enforcing sales contracts in California. “I doubt they’d have started this if business was good.”
Johnson said Fieldstone has tried to share the risk with customers by requiring them to pay the cost of any changes up front into an escrow account. Fieldstone either keeps the money at the close of escrow or returns it if the buyer adds those costs to the total mortgage loan.
But if a customer cancels a sale after changes have been made to the house, the money is refunded only if Fieldstone finds another buyer willing to accept the alterations--and pay the extra cost for them. “Otherwise, we will use the money to tear things out” and return the house to the original floor plan and fixtures, he said.
“We really don’t know yet whether we will gain or lose with the program,” he said. “But we are banking on buyers being more committed because they are personalizing their homes. We think we will see cancellations decrease.”
If most buyers are like Robin Cohen, the company has no worries.
She said she would have bought in the Fieldstone project even without the program because she has long wanted a home built by that company.
“Even though I knew I wanted one of these houses,” she said, “I looked at a lot of other tracts first. And I asked the sales people if we could make any changes and they all told me that sure, I could do anything I wanted--after we bought the house and moved in. But I’m saving a lot of money by doing it during construction.”
Suzy Dukelow, sales manager at Fieldstone Seasons, the more expensive of the company’s two Mission Viejo developments, said that shoppers are surprised at the level of flexibility the company is offering. Not all of them, however, have availed themselves of the program.
“I have one couple who have made almost $20,000 worth of changes and others down in the $4,000 and $5,000 range,” she said. “But we also have a lot who are just using the no-cost options” that most builders offer--things like different finishes on the kitchen cabinets and changes in the style and color of kitchen and bathroom tile.
The Fieldstone tracts began sales July 31. So far, the company has sold 17 of the 44 homes that have been offered--a pace that far outstrips the countywide average of just 2.4 sales a month.
Cohen said she has been a regular visitor to Dukelow’s sales office since she and her husband signed their $229,000 sales contract on the day sales began.
There she pores over plans for the house, using a special computer program to make changes and see what the changes will look like. The program enables buyers to alter floor plans and to also see, in color, what their homes would look like with changes to various exterior features.
Fieldstone also maintains a book that lists all the materials used in building the homes--indicating what parts of the house can be altered and the cost.
Items in the 40-page book range from the no-cost design changes, which include several choices of plumbing and lighting fixture styles, to the high-cost: $2,400 to replace aluminum sliding doors and windows in the dining room with wooden French doors; up to $3,400 to convert the garage from three-car to two-car with a separate multipurpose room.
The most costly single item, at $3,895, turns a den or family room into a entertainment room wired for high fidelity, surround sound television and stereo and equipped with speakers, receivers, a compact disc player--everything but the television.
Not all the items are expensive, though. Converting a bedroom to a den--which entails removing closets and changing the doorway, pencils out at $150. Changing an upstairs loft into a bedroom adds $1,000 to the purchase price.
When buyers decide to purchase a home in one of the Fieldstone projects, they are given the home-fitting book as well as a work sheet that shows the various floor plan arrangements possible in the home selected.
The company gives buyers two full months--until framing starts--to make structural and electrical changes, and another month to make final decisions on non-structural items like tile, major appliances and cabinetry.
Similar programs are used in other states, where the logistics are simpler because developers do not build in the huge volume common in California tract developments. In fast-growing Atlanta, for instance, a large builder might do 100 homes a year. Fieldstone plans to do more than 1,000 this year.
Fieldstone officials, who meet regularly with builders from other parts of the country to compare notes, first were exposed to the concept about three years ago, Johnson said.
“We spent about a year just looking at how others did it and then two years adapting it to our state and our company,” he said.
