Welcome to this edition of the Houston Custom Home Builders podcast series, brought to you by Houston’s leading luxury construction team, Morning Star Home Builders. I’m Greg your host, and for today’s episode we’re joined by two of Houston’s best known and most accomplished custom and luxury home builders, Ted and Yvonne Cummins. Good to talk to you both this morning. How are you?
Ted: Good morning, Greg.
Yvonne: It’s a great day in Houston, Texas.
Greg: That is always good to hear. Ted, let’s start with you. You always talk about being a chronological thinker and we’ve touched on a couple aspects of building custom homes, primarily picking out a lot. What comes next in your list of chronological thinking?
Ted: Well, and I appreciate you acknowledging my need to do this in an orderly fashion. We like the conversation because I think there’s a natural tendency is because when you go out and get looking at land, you look at this lot, and here we are in October in fall. It’s nicer to be outside, you get excited about the dirt and you get excited about all this process, and the next logical place for most people to go is to start thinking about the design, so they go on Houzz, they start looking online, they look in magazines, and they start thinking about design. What they’re not thinking about is the need right then to now start thinking about choosing a builder.
Greg: So we should be thinking about choosing a builder before we get too excited about which plan we’re going to alter and tweak to make our own?
Ted: Exactly, yes, because you really, in our model being a full design build company, we want to work with that client from literally the time they’ve made the lot selection to get them in through the design and allow us to help guide that process. We think the important next step is selecting a builder right upfront, not waiting until months have gone by, they’ve fallen in love with the floor plan, to come to find out that’s going to be pretty expensive to build because it’s outside their budget.
Greg: Or it might not even fit on the lot, right? You touched on that last time we talked about lot selection. Not every plan fits on every lot.
Ted: Or if you’re in some communities, they may pick a setup where the garage faces the street. In some communities, you can’t even do that, so already the plan has to be changed. There’s a lot of reasons why the selection of the builder really comes next.
Greg: What is involved in finding a builder? Is it as simple as flipping open a phone book or Googling something? What’s the best way to actually pick a quality custom luxury home builder?
Ted: Well, we’ve put together a series of questions that we send out to people that we’re having initial conversation, because it’s a great starting point and we’d like to go through some of those depending on how much time we have.
Greg: Right, absolutely. In your mind, an interview would be best, talk to a builder and actually ask some in depth questions.
Yvonne: Yes. I think that’s the best way to get your questions answered, to start with maybe how many years have they been building custom homes. There’s a difference also between building homes and building custom homes. Has this builder built the kind of home that you are thinking about building? There are different styles. There’s different requirements within different neighborhoods, so those are some of the things that we suggest that you find out, and Morning Star for example has been building for 16 years.
Greg: Let’s start with that first question. How long have you been building custom homes? When someone asks you that, are you more concerned with the length of time they’re looking for or that everyone’s defining luxury home or custom home the same way?
Ted: It certainly needs clarification because some people say, “Yes, I build custom homes,” but the reality is their plans are always very similar. There’s very little things to be made, little changes, where in our design build model, today, we’ve never built the same house twice in 16 years. We’re about as custom as custom gets. We like to differentiate that so they have some confidence that no matter what they can come up with or see or want, that obviously has to fit within their budget, but as it relates to skill set, we bring a lot to the table.
Greg: You guys customize everything, but there might be a custom home builder, in quotes, who customizes one or two aspects of a plan that’s already designed and they could call themselves a custom home builder because they customize a little bit, but you guys are saying everything is customized with you.
Ted: Right. We want to make sure that we’re all about identifying and meeting needs for our clients, so whether they’re in a different season where now they’re looking at full retirement, so all of a sudden we start talking about, “Well, how much do you plan to travel?” Should we consider things like an app for your phone to be able to control you thermostat so you can be in Europe and still know that you didn’t leave the air on too warm or too cold, or to be able to have security cameras monitoring the home so if an alarm goes off, they can actually check their phone and make sure the home is secure. Some of those things, that to me is what excites us, is being able to identify the needs of our clients, and honestly sometimes they don’t even know they have that need. It’s just more about asking questions and trying to understand what really is necessary and very helpful for them in their home.
Greg: Okay, so if I’m making a list of questions to ask when I’m looking for a builder, when I’m trying to find the right builder for me, what would be some other questions? We’ll go through a couple one by one in a little bit of detail if that’s all right.
Yvonne: Sure. Well, another question I think to consider would be if they’re a member of the Greater Houston Builder’s Association and are they a member of the Texas Association of Builders and the National Association of Home Builders, the reason being is that there are certain qualifications if you will to be a member of that. In our situation, that means that we’re very committed to upholding those standards, and we have some designations through the National Association of Home Builders, as well. I think it just speaks once again to the fact that you’re wanting to stay on top of what the newest educational types of things that are out there, building science, those sorts of things.
Greg: This would be a quick way for a client to screen, real quickly, sort of a fly by night kind of builder who really hadn’t taken the time to become qualified with these associations.
Ted: Well, that’s a great segue, because the next question is how often do you actually participate and attend the council meetings, because there is a checkbox that some builders will do just to join and they can put that on their web site, they’re a member, but if you drill down and ask questions is, what’s their involvement, are they actually involved in the organization, not just a member.
Greg: Oh, okay. That makes a lot of sense.
Ted: For example, I just served on, the Greater Houston Building Association is one of the largest and most active in the entire country and there’s multiple councils in that organization, and the council that applies to us obviously is the Custom Builder Council. I was on that board with the Custom Builder Council for three years and actually served as president one of those years of that council. We would get together monthly for lunch meetings and there would be anywhere from 80 to 120 people come to lunch and it was all educational and just, if you don’t mind me using a verse in Proverbs, is “iron sharpens iron, so one man sharpens another.” Being able to sharpen one another, best practices, connecting with other good builders, and just stepping up your game I think is incredibly important for a company.
Greg: Absolutely. There’s a lot to learn by talking, exchange of information and teaching others and learning from others. It’s a great two way street, isn’t it?
Ted: Absolutely. Again, that’s very different than being, “Yes, I’m a member of the GHBA,” or any building association in other markets.
Greg: Okay. If someone’s convinced that you have the activity level in the local organizations, what else should they be concerned about when picking a builder?
Yvonne: They would be looking at how many homes a year that they build, what kind of price point, if that’s within their price point. I think it’s important to know how many employees that builder has, who is going to be actually supervising that project. There’s a lot of things that go into a house and you need to have someone to supervise that, and so it’s critical that you have adequate supervision to make sure all those pieces of the puzzle, if you will, all fit together to create the client’s dream home.
Greg: I was wondering if you were going to talk about how many homes you build as being a question because, I wonder, is that sort of a question that people don’t think about the same way you might, in that I’m sure a lot of home builders brag about how many homes they build, as in a large national company might say, “We build,” I don’t know, “500 homes in this market in the year.”
I’m assuming that’s not the number you guys are shooting for because you have such a different model. Does that cut both ways when someone says, “How many homes do you build a year?” You want to have enough homes to be respectable, but at the same time be small enough that it’s an individual task. Each home is its own little project, or big project.
Ted: Absolutely. You couldn’t be more correct. We talk about really the volume and the number of homes is not our focus. It’s really about the relationship is our focus. Ongoing, we probably have anywhere from five to eight homes going on at a time. We’ve got two full-time project managers in the field. We have adequate supervision to do what we’re doing because you’re right, Greg, when you start adding volume and to do the kind of custom that we do and the amount of details in each home, what happens is as you add volume, the details drop off, and we’re committed for that not to happen. Yvonne and I made a business decision of not trying to make to build 20, 40, 50 homes a year and lose the quality and the uniqueness of what we do. That’s just the decision that business owners have to make.
Greg: It sounds like that’s a perfect place for clients and you guys to get on the same page because some people like the hands on approach, I assume, and sort of the artistry and the individualness of the process, and I’m guessing other people want more of a mass produced maybe less expensive, and it’s probably good to find that out before you get too far down the road.
Ted: Which is why it’s important to pick a builder upfront and have these kind of conversations so they really can make an informed decision.
Greg: Okay. It’s more everyone getting comfortable with each other than really a sales job, I guess again in quotes, that you guys are trying to pick up every possible client. It’s more, let’s make sure this is a good fit for everyone because that will determine the process and you’ll end up with the best product for everyone at the end.
Ted: Absolutely. We’re very much a win-win people, and so we want to make sure it fits both of us and try to manage expectations, the time of construction, the decisions that you’ll need to make. We provide a lot of help and resources to make that as painless as possible, but the reality is you’ve got to be ready to jump into the building of a custom home, designing a building, is not an easy process. We want to make it pleasurable, and at the end of the day, I think people really enjoy the camaraderie and being a part of that team and that joint accomplishment that happens. Like anything that’s hard, it’s worth it at the end.
Greg: Right. That’s a good point. I’ve been asking too many questions and blabbering on my end, and we’re going to run out of time. I know you have a lot more questions. Do you want to give me a couple more questions? You’re not going to get through them all I’m sure, but maybe a couple more questions would be a good idea for a client to ask a custom home builder?
Yvonne: Sure. Another question they should consider is who is going to get the financing for the construction loan. Is that something that the client will be providing or is that something that the builder provides? In our case, we generally suggest for our clients to pursue their own financing. They generally are able to secure better financing rates on their own, and that’s another way that we can bring value is to allow them select their own bank. We have several banking relationships that we work with and we give those to our clients, but ultimately a lot of them already have previous banking relationships.
Greg: That seems like that would be a really important thing because that has to get set pretty quickly upfront, right, as you move along, who actually owns the land and who owns the house as it’s being built.
Ted: Yes. Most of the time our clients have found that lot, they’ve been able to negotiate and buy that lot on their own so they already have a lot. I would say a good chunk of our customers have already purchased a lot and it may even be paid for, so now they really need the construction piece.
We can talk probably another time about some of the options on what kind of loans to pursue, but to Yvonne’s point, typically our clients get the construction loan, we work with the banks obviously through a series of draws and releasing funds to build a home, but having a budget set up right upfront, which goes back to picking the right builder, and once you decide that, understanding their budget and making sure that you’re qualified and you can handle the property taxes and the loan payment and the insurance for that project obviously is important.
Greg: I promise not to ask anymore questions. Why don’t you tell us a couple more questions, and maybe we’ll come back on a different episode, I’m not sure when we’ll get back to it, but let’s figure out some more questions that clients can talk to builders about, make sure they have a good fit, and we’ll come back and touch on these in a future episode if that’s all right.
Greg: Maybe a couple other questions that we might touch on later?
Ted: Yes. Obviously the things that the banks are going to look at. The other one that’s probably important, too, is asking more questions about the company as it relates to do you have liens currently against your company, has your company ever changed names and now you’ve gone bankrupt and now you’re building under a different name. Those are two important things and you’d be surprised how few people ask those kind of questions, and us as builders, we know this occurs.
We’ve seen that happen and it’s kind of a challenge for us because sometimes, on one hand, you want to make sure that, okay, I know you’re talking to Builder X, and we know that he just went under two years ago and he’s back under a different name, but if we bring that up, somehow it looks like we’re not being above board. I think clients need to do the due diligence in researching the company and how long they’ve been in business and they’ve not had any financial problems because you’re dealing with, in most of our homes, $700 to $2 million. That’s a lot of money to trust that builder with, and they should be very comfortable about the financial stability of that company.
Greg: Absolutely. Those are a couple of things that I hadn’t even thought about asking, so I’m glad you brought them up. We’ll get to them on a future podcast, but if someone’s listening and before we get to the next episode, if they want to reach out and find you guys, what’s the best way?
Yvonne: They can go to our web site, homesbymorningstar.com. They can check us out on Facebook at Morning Star Builders. You can go to our Houzz account and look for us there under Morning Star Builders, and you can also give us a call at 832-304-2310.
Greg: Ted and Yvonne, I appreciate your time. I look forward to the next episode.
Yvonne: Thank you, Greg.
Ted: Thanks, Greg.
Thank you for joining us on this episode of the Houston Custom Home Builder podcast series. If you have any questions or would like to contact us at Morning Star Builders, you can find us on Facebook. You can always visit our web site at homesbymorningstar.com. We appreciate your time with us today and look forward to bringing you another episode soon.