Would adding $500-$2500 more per job help your company in 2020? A new study released by Freddie Mac may help you do just that.
Why Energy Rating Index (ERI) & Home Energy Rating Systems (HERS) Make All the Difference
Most of us realize that smaller home sales are picking up while larger home sales are decreasing. With less square footage on the table, why not go after more profit per house? According to a four-year study just released by Freddie Mac, homes with better HERS/ERI scores sold for 3-5% more than those with lower scores. At 3-5%, this would mean a higher-rated home (ERI less than 60) with a price range of $400,000.00-500,000.00 would sell for $12,000-$25,000.00 more than one with a low rating. If the insulation, air sealing, HVAC and envelope package raised the price $5,000.00, the money the builder spent would pay for itself many times over!
How Training Builders Works to Your Advantage
I like to believe that people reward those who help them the most. I even found this to be true with some of the larger builders. If I bring comfort and energy solutions to builders or even train their model home salespeople to be better, they will bend more on the price to keep me around. When you have an ongoing training program to help set them apart and raise the value of their homes, they don’t beat you up on price as badly. Don’t get me wrong, they will still beat you up (it’s their job), but when you get them selling bigger envelope packages, and selling them more often, your company benefits. More than that, better envelope packages typically lead to slightly higher margins. It even leads to them selling sound attenuation packages more often.
There is also the benefit of training model home salespeople who move around the market. It makes them better at focusing on the benefits of insulation. Often, they will discuss your approach with other builders they wind up working for. They talk to a lot of mortgage and insurance brokers, but not many contractors focus on their sales staff. Most of the time, you will be one of the only trades who take the time to train and follow up with them. They will use your knowledge and building science to set themselves apart. Many of them may even recommend you to clients who decide against buying new and instead try to make their existing home better. Teach them simple things. A good point to make is the fact that a home will go through 5 or more mechanical systems in a lifetime, but the improvements they make to the building envelope will make the home comfortable forever.
Share Your Knowledge
Lastly, it may be smart to offer a presentation on this at your local HBA, but be careful about sharing strategies that may be used without you. Either way, check out the summary from the study and use it to try and add top plate gaskets, additional air sealing, and thicker insulation with your builders.
If you have questions or want more help on ways to train builders, reach out to your local branch or contact us online. IDI’s goal is to be a resource to help you grow. We look forward to doing that as we work to earn your business every day.