During a question and answer session at a recent industry conference, a home builder asked Moody’s Analytics chief economist Mark Zandi for his thoughts about the labor
Pointers for Dealing with Troublesome Custom-Home Clients
Custom builders should learn the difference between a true "client from hell" and a problem client they created themselves.
Most builders would tell you that any customer is a good customer, especially in today’s economic climate. I think otherwise. It is even more important to realize that bad clients can not only become a major pain to deal with, they could possibly bankrupt you and your company.
At no time in my career has land been so reasonably priced; quality builders so available; trade contractors eager to work; and suppliers hungry for business. But some prospects look at this as an opportunity to get something for nothing. There is no sense in working with a client who is bent on taking advantage of you to the degree where, at minimum, you don’t make any money on the project, and in the worst case, lose money or your business.
Now more than ever, custom builders must remain vigilant and aware that there are a certain number of people who don’t realize that a successful custom-building project is really a partnership between the builder and the customer. It is our job to educate, evaluate and filter out the good customers and to create a win/win relationship. So how do we do that?
A true “client from hell” will warn you in advance. Don’t ignore these signals:
- No flexibility on design, budget, features or meeting times
- Pride in past conflicts
- A husband and wife constantly arguing over minor items
- Your gut feeling (if you think they’re going to be difficult to deal with, they almost always will be)
For the most part, no matter what you do for them, these people will not be happy. It will be a miserable experience for you both emotionally and financially.
True “clients from hell” are actually quite rare. Sometimes we are our own worst enemy and create a “client from hell” by not setting and maintaining realistic expectations before, during and after construction. Here’s how to keep your client from going over the edge.
- Don’t assume that they know how the building process works — educate them.
- Do what you said you’d do when you said you’d do it.
- Communicate with them. A quiet client is a dangerous client.
- Use complete plans and specs. Once again, don’t assume anything.
- Have a clear, fair and comprehensive agreement with a dispute resolution procedure.
- Keep them in the loop on schedule and budget updates.
- Have an understandable and reasonable change order policy.
- Make sure that they understand their responsibility for making selections on time.
I have found that virtually all client/ builder disputes result from a failure to deliver on promises. If we make sure that our systems and procedures are proven and professional, we have a much better chance of attracting reasonable, qualified and profitable customers — even in this economy.
|Nationally recognized speaker and trainer Tom Stephani, MIRM, GMB, MCSP and CAPS, specializes in custom homes; infill housing; light commercial projects; and developing commercial and residential land. You can reach him at firstname.lastname@example.org.|