From file "061r1_pss" entitled "Market.qxd" page 01
From file "061r1_pss" entitled "Market.qxd" page 01
From file "062_pss" entitled "Market.qxd" page 01
From file "062_pss" entitled "Market.qxd" page 01

The four luxury spec houses currently for sale by London Bay Homes in Naples, Fla., average 6,100 square feet and more than $5 million. Those are the only things “average” about them. The rest is pure custom, from the handmade maple entertainment center and three upper-level guest suites in the 5,350-square-foot Alessandra, to the elevator that leads to a home theater, full bar, and billiard room in the 9,000-square-foot, $7.6 million Gabriella.

There's no denying that custom homes, especially the upper echelon built by London Bay Homes and others nationwide, command an extreme attention to detail, an extensive list of the highest quality specifications, and an unusual amount of coordination among subcontractors and suppliers—as much by dealers as the builders themselves. “The key for us is a salesman who can concentrate on all of our needs,” says David Giles, director of construction for London Bay Homes. “It takes someone who can make everyone happy.”

By definition, every custom home is unique, requiring a broad understanding of available products and a slightly different approach to each project. Clockwise from top: Merlin Contracting & Development, London Bay Homes, Russell Home Builders. Such a lofty goal goes well beyond answering cell phone calls during off-hours and bringing donuts to the jobsite to stroke the subs. Successfully serving and selling custom builders requires the skill—and desire—to forge relationships along the entire supply chain, develop deep and broad product knowledge, solve other people's problems, accept extra responsibility, and make every account believe they are the dealer's top priority.

It's a scenario Bill Merchant wouldn't trade for the largest production builder account in Florida. “You have to use your brain and invest time up front to enable your builders to make the best decisions,” says Merchant, an outside sales associate with Naples Lumber & Supply, a single-location,$30 million operation. “The products they use are more complex and complicated than production builders.”

Pressure to Perform Including London Bay Homes, Merchant manages a half-dozen custom builder accounts—all of them challenging, demanding, impatient, and, yes, even cost-conscious despite multimillion-dollar price tags on their projects. “There's not a lot of room for error,” he says, noting that a missed item on a custom home takeoff can easily translate into a five-figure discrepancy in the budget given the high-priced products being specified. “There's more pressure to perform and provide accurate and reliable information.”

In addition, custom builders rarely order off the rack. “Every home we do has custom millwork, hardware, and profiles for the trim,” says Giles. “There's little that comes off the shelf, so we expect our sales reps to coordinate with different suppliers and mill shops to get what we want.”

London Bay Homes in Florida regularly shops its custom and luxury home specs to gain competitive pricing for high-ticket items, some of which are purchased in significant volume. To meet that expectation, Merchant and other sales associates catering to custom builders have become experts on a broad range of product categories—a challenge that requires close relationships with manufacturers, wholesalers, manufacturers, and even other dealers. “It's important for me to have solid relationships with vendors and a pipeline to products,” says Merchant. “It's not just about the product at the best possible price, but quality and lead time issues, as well.”

Specialty suppliers who focus on the custom market are equally savvy. “It goes beyond product availability,” says Andrew Moran, co-owner of Moran Supply, a high-end plumbing supplier and showroom in Oakland, Calif. “We provide product knowledge, take care of screwups, deal with homeowners and architects, recommend a sub for a particular product, get answers to code questions, and even lead [the builder] to a supplier of a different product line he's looking for.”

Along those lines, sales rep Bill Hensley of Mobile Lumber & Millwork in Pensacola, Fla., tracked down specs and pricing for impact-resistant glass required by code for coastal construction, if only to give one of his custom builders a reality check on the cost he was quoted by a specialty window dealer. “There are so many variables and products out there now,” Hensley says, thanks to the trend toward specialty suppliers. “I have to be well-educated about what it is, how to track it down, and whether there's someone to buy it from.”

Dealers who serve the custom market also have to be patient with the process. Homes in the range of London Bay's and others may take 18 months or more to complete—likely with several changes along the way. “A supplier might have to bid a set of plans or specs three times, and in a timely manner, before it's figured out,” says Matt Farmer, a superintendent with Merlin Contracting & Development in Las Vegas. “They have to be willing to play make-believe with you.”

Custom builder Mark Bohon of The Bohon Group in Oakland relies on his suppliers to be flexible while he and his architect and homeowners work out the details along what can be a two-year production path. “I'll ask them to work off of an idea or a plan, but we really won't know until later in construction, when things may change,” he says.

To help relieve the pressure, Jenny Gilfillan, an outside sales associate with Piedmont Lumber in Pittsburg, Calif., works to understand the personal preferences of her custom builder clients, which enables her to anticipate requests and thus narrow her sources for supplying the majority of custom requests. “Custom builders have a personal and emotional commitment to the homes they build,” she says, in stark contrast to a production builder's purchasing agent fulfilling the spec list for the next phase of a new subdivision. “It requires way more time and hands-on service, but that's something custom builders are willing to pay for.”