Production and Accounting Software for Home Builders

This year’s IBS was the best year in the past four for Constellation HomeBuilder Systems and the thought was echoed by many builders in attendance. There is a realization that technology will play a much more important role in the builder’s future.

There was talk everywhere about leveraging social media in homebuilding. It is a strategy you should adopt NOW! See what I mean…

One thing I learned is the importance of “claiming your business” on Google. There is a way to enhance the listing of your business on Google including maps, pictures content and even reviews. It is part of the Local Business Center… Who Knew? Check out this link to learn about Claiming your Business.

The response to our new Groundbreaker website solution was phenomenal. If you know you need to update your website or think you may need to change see what Groundbreaker can do for you. Announced at the IBS show Groundbreaker had builder big and small talking and agreeing the unbelievable value it represents.

It was amazing to see the response to the newest product in the Constellation HomeBuilder Systems line of ERP solutions. HomeDev is a project management and job cost system developed for the small builder and remodeler. It uses Microsoft tools and works with QuickBooks. Many builders stated clearly “this is exactly what we have been waiting for”.

BuildSoft Pro was introduced at the IBS as well. Current BuildSoft users were stopped dead in their tracks when we showed them the new product and how it will help them better manage job costs and complete projects on time.

A couple months ago Builder G, not their real name, decided to change the way they follow-up with internet leads. They are already a successful builder, but this is still a big step for their company and their staff. Everyone involved in this will learn how to use the internet differently, identify and follow-up with prospects more consistently, and manage their sales teams more effectively. They will make better use of Constellation’s home building software.  I hope we learn a lot as well and we’ll share it with other builders in the Constellation family. 

For most builders, the time is right to make this improvement.  There is some optimism in the market, websites have probably been neglected, more potential home buyers are getting their information online, the length of the new home buying process has increased, and many large builders are attributing their recent success to a better website sales process.

Builder G will make the following changes:

1. update their existing website so that it is easier for prospects to obtain community/lot/model/upgrade details and provide contact information
2. utilize one employee to follow-up with all internet prospects immediately to provide friendly information and schedule sales agent appointments
3. utilize their existing sales system to track each prospect and ensure that only qualified prospects are provided to sales agents

Builder G hopes to obtain the following results:

1. obtain more prospects from their existing websites (pre-registration and existing communities)
2. ensure that all prospects are the responsibility of one person and that their marketing database is properly maintained for future prospect campaigns
3. use the software from Constellation to follow industry best practices and track every prospect from start to finish

We’ll let you know how it goes.

Just a quick announcement to let everyone know that the recording from our online marketing prospect follow-up session with Mike Lyon is available for viewing.

In this presentation, Mike does a great job talking about the changing habits of new home buyers and explains some practical approaches builders can follow to increase the number of new home sales.

To summarize, it’s all about:

1. providing quick, personal follow-up for all online prospects
2. ongoing periodic communication (e-mail, phone calls)
3. bringing online prospects into the sales office

Fortunately, Constellation has sales and customer relationship management (CRM) solutions to help with this.  We can bring prospect information from your website into your sales system automatically, provide website redesign services, and even help builders go live with a new website very quickly. For example, Kaplan Companies and Stylecraft Builders have used our services to create some amazing websites that are optimized for search engine results.

We would like to thank Mike for conducting the webinar. He speaks with authority about the conversion rates a builder can expect and best practices that can be implemented to boost sales from internet leads. He is also the author of Browsers to Buyers:Proven Strategies for Selling New Homes Online, the home building industry’s authoritative guide on internet marketing, lead generation and leads management.

To learn more about Mike and how he can help your organization, you can visit www.doyouconvert.com.

Direct link: Online Marketing and Prospect Follow-up Best Practices

Final Reminder – Register Now

Date: Tuesday, September 1, 2009 at 1 PM EST –
Presenter: Mike Lyon – Do You Convert?

Click here for your video invitation to this event.

With more and more new home buyers going online to begin purchasing their new home, home builders need to consider the following:

• Search engine results and rankings are critical
• Websites need to be organized to capture more prospect information
• Prospect follow-up needs to happen quickly
• Sales staff need to be accountable for every prospect
• Prospects that are not motivated now can become motivated at any time, so ongoing communication is important

The session will be presented by Constellation HomeBuilder Systems and Mike Lyon and will feature a detailed presentation, product demonstrations and an opportunity for questions.

Important Registration Information

After you register for this session, all participants will receive an email confirmation via WebEx confirming your registration with an event URL and event password.  If you do not receive a confirmation, please contact Cathy Kotsopoulos via email or by phone at (888) 723-2222 ext 6140.

With the HST announcement by the Ontario government in March the great unknown was how this would affect our clients?

I have attended the various seminars and workshops put on by the OHBA and BILD hoping to get definite answers to all my questions as to how the HST will be applicable to Homebuilders.  At these sessions there have had experts from both the private and public sectors.

I did get some information but all the rules have not been defined by Canada Revenue Agency or the Ontario Finance department.

Things You Should Know about HST – HST will be implemented on July 1, 2010

According to the Ontario Ministry of Finance the HST will be revenue neutral.  It will reduce the amount of tax paid by Ontario businesses.  That prior to the announcement there was a 2% o 3% RST (Retail Sales Tax) component already factored into the Home Sales price.

To take the Ontario New Housing Rebate the house must be the Primary residence.  The same rules and conditions as the GST rebate.  If the sale is “grand- parented” then there is no Ontario New Housing Rebate.  The Ontario New Housing Rebate can be claimed by the Home Buyer or can be assigned to the Builder.

For the HST rebate calculation the existing GST rebate remains unchanged.  For the Provincial portion of the HST the rebate will apply to the first $400,000 of the purchase price.

With the “Grand-parented” sale the Home Buyer does not pay the HST only GST.  But the Builder is able to claim the Input Tax Credits on all costs paid after July 1, 2010 related to the house construction.  The Builder will pay 2% of the selling price times a factor based on percentage of completion on July 1, 2010.

One of the changes with the HST implementation that the Builder must be aware of is Disclosure.  What I mean by this is that the Builder must disclose if the Agreement of Purchase and Sale was signed between July 19, 2009 and June 30, 2009, whether the 8% Provincial component of the HST applies and if the purchase price is net of the New Housing Rebate.  If this disclosure is not made then the Purchase Price is deemed to include the 8% Provincial component of the HST.

A builder is considered a large business (annual sales above $10 million) then the PST component for the Energy (i.e. Gas, Electrical), Telecommunications (excludes internet services), Vehicles and  Food, Beverage & Entertainment  will be restricted from applying for the Input Tax Credit on the PST portion only.

Have you ever asked a question and wish you had not?  That happened to me last week.  I asked one of our senior managers (a CA) “What do you know about GST/HST and the pending harmonization?”  His response — “It’s Complicated!”

Being an inquisitive type I started to do some research and — wow — was he right.  This new mandate for Ontario (and maybe some additional provinces) is going to have a significant and profound impact on our industry so I thought I would share some of what I have learned with you. 

First of all, it is a most interesting name – Harmonized Sales Tax – sounds pleasant… right?  Not exactly, based on what I could find out it brings harmony because in order to implement HST a builder is thrown into chaos bordering on pandemonium.  It is difficult to fathom how a builder, remodeler, or renovator can manage all of the requirements and continue to run their business.  For this reason, Constellation HomeBuilder Systems is making changes in our NEWSTAR Enterprise production and accounting system, to help the builder deal with the new tax rules and we’ll be ready when the rules come into effect.

Let’s cover a couple of the basics.  When? The new law goes into effect July 1, 2010, less than a year away.  Who is impacted?  All companies including builders, remodelers, and renovators are subject to the new regulations.  To further confuse you, some of the exemptions you had in the PST regulations no longer apply.  Not confused yet?  Well then, they will add some new exemptions for you to understand and keep track of.

You need to be planning for and understanding how you are going to comply with these new regulations.  One piece I read had some reassuring news… “The province acknowledges businesses will have to change their accounting systems”. 

With past regulatory changes Ontario builders have been able to rely on internal resources to address them.  This one is going to be a little tougher.  The transition rules for projects already under contract or under construction are likely to be more complex and require more information from your production system.  As an organization you can train your staff to learn the intimate details, or you can rely on your software partner to build these rules into their systems.  Constellation has a proven track record for doing this with Tarion requirements, GST calculations, payroll taxes, and other regulatory requirements in Canada and the United States.

HST is complex and I can show you how I came to this conclusion.  I “googled” HST and on the first page of search results I found some good information.  Here are a few of the links I found worthwhile.

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/cnstrctn/menu-eng.html�
http://www.canadabusiness.ca/gol/bsa/site.nsf/en/su07017.html#a1

The reason I say complex… The first link I gave you above has no less that 17 additional links to find more information.    Are you equipped to deal with this?  To make matters worse these taxes add to the purchase price of your houses and construction projects.  So how are you going to do this?

It is time to rely on your software partner.  Let them (us) do the heavy lifting and make the changes to your accounting and production system.  It is your software company that should be responsible for these changes.  Constellation has been very involved with the local home building associations and we will continue to be involved to ensure that our systems will include the functionality our customers need. We have already made the necessary changes for GST/PST and TARION and as a Canadian company we have a better understanding of these changes than any other software provider.  So if you are managing these statutory changes outside your core software, it is time to make a change.  If you are sitting on the fence delaying a software purchase now is the time to decide.

It is not all bad news.  There could be a small buying frenzy created because of the new taxes.  A buyer will see savings should they purchase and close before Canada Day next year.  Leverage that information and create a sense of urgency in your buyers.  Show buyers how delaying their purchase will cost them more money.  If you have inventory homes or lots waiting for new homes your sales team can take advantage of this knowledge.  Sell a few more homes and ease the transition.  Now that is what I call harmony!

FREE Event – Online Marketing Best Practices and Prospect Follow-up

With more and more new home buyers going online to begin purchasing their new home, home builders need to consider the following:

• Search engine results and rankings are critical
• Websites need to be organized to capture more prospect information
• Prospect follow-up needs to happen quickly
• Sales staff need to be accountable for every prospect
• Prospects that aren’t motivated now can become motivated at any time, so ongoing communication is important

The session will be presented by Constellation HomeBuilder Systems and Mike Lyon and will feature a detailed presentation, product demonstrations and an opportunity for questions.

Date: Tuesday September 1st, @ 1 PM Eastern

– Enroll Now

 The NEWSTAR Enterprise 9.2.4 video overview is now available in the NEWSTAR client care center.

This recording covers major enhancements in the latest NEWSTAR Enterprise service release and it is available anytime for Constellation customers.

It’s easy to view. Simply login to the client care center at www.constellationhelpdesk.com, click on the NEWSTAR link at the top, and the event will be listed on the left in the NEWSTAR Video Library.

This session is recommended for Sales Managers, Purchasing Staff, Construction Managers, and Warranty Coordinators.

To request a user account, or if you need to reset your password, click here.

Day three at PCBC 2009 began with a motivating keynote by Seth Godin. His challenge to the home builders in the audience was to figure out how to build a home that will be lived in because the buyers like it, not becuase they will make a bunch of money when they sell it in 6 months. The home is more than the granite countertops, 4 bedrooms, the great room and a nice backyard.  The home needs to be part of the community and that begins with communication.  The builder needs to learn from the crowds that want to buy a home, identify a niche, design a home and a community that people want to live in, one that fits their lifestyle, allows them to live near people with shared interests, and one that people will tell stories about.  It is those stories that will bring motivated buyers into the sales office. Stories that people identify with and stories about the people that will become neighbours.  Telling stories is so much better than simply talking about how many bedrooms, bathrooms, square feet, and parking spaces the buyer will have in their new home.

If you are a builder doing something different, post a comment and let us know.

Here is a picture from the event.

We had another great day at PCBC 2009 and some very savvy builders visited our booth. Some were looking for home building software, some were starting new businesses, and some were frustrated with their current software partners.

An existing customer that has been using one of our systems for a long time was blown away with how much more they could be doing with our software.  They could be using scheduling better, they could be following up with leads quicker, they could be providing all their warranty materials online, they could be tracking supplier quality better, and they could be using more of our built-in reports.

As a software partner, I feel that we have let them down. They should know that we have been working hard to improve our products and provide them with tools to make them more effective and efficient.  I encourage any builder with a slight interest in wanting to do more with technology to run their business to give us a call.

I’m looking forward to Seth Godin’s talk on Friday.  Should be fun.