Julyaug 2016 final

July /August 2016 The exclusive magazine of MBIA

i on ia t ARD c o s s AW s A CE ’ HB EN N A E LL C EX

BE

A N C I NL

IPUB

W ST

N R O I ET

2016 CUSTOM BUILDER AWARDS Drama and Design

12

GAMBLING ON CASINO NIGHT

32

MYSTERY OF SURVEYING PART 3

36

HBCF’S 4TH ANNUAL BULL & OYSTER ROAST

New fangled stuff.

Old-fashioned service.

Vintage provides innovative technologies to make homes safe and enhance lifestyles. Call us for security systems, home theatre, whole house music systems, home automation, and structured wiring.

2

Contact Robert McDonald 1-877-767-1800 BUILD MARYLAND July/August OďŹƒces in Jessup,16MD, Prince Frederick, MD and Chantilly, VA

IN THIS ISSUE

18 FEATURES COVER FEATURE

18

CUSTOM BUILDER AWARDS And the winners are…

10

LEGISLATIVE WRAPUP The 2016 Session Comes to a Close

12

CASINO NIGHT Let it Ride!

14

ONLINE SALES COUNSELOR

IN EVERY ISSUE

Why your Business Needs One

2

EVENTS CALENDAR

42 MEMBERSHIP DRIVE

4

PRESIDENT’S MESSAGE

44 NEW MEMBER SHOWCASE

6

CEO’S MESSAGE

50 NEW MEMBERS

8

LEGAL BRIEF

51 ADVERTISER INDEX / DID YOU KNOW

38 ENGINEER’S TOOLBOX 40 STATS & FACTS

52 STARS CLUB / BUILDERS BOOKSHLEF

32

MYSTERY OF SURVEYING PART 3 Accuracy vs. Precision

36

HBCF’S BULL ROAST Food & Fun for Charity

marylandbuilders.org

BUILD MARYLAND

1

EVENTS CALENDAR

How will you m AUGUST 2012 Energy Code req

JULY Professional Women in EDITOR Building Kristin Josephson Hogle, Communications Director Networking communications@homebuilders.org Lunch ADVERTISING Chris Baughan, The Greene Turtle Advertising Sales Manager 410-265-7400, ext. 121 Prince Frederick, MD chris@homebuilders.org

July 12

DESIGN Heather Winkel, Art Director Corinne Thompson, Graphic Designer Network Design Group ndg@networkmediapartners.com

Anne Arundel Summer HBAM LEGAL COUNSEL Linowes and Blocher Charity Event MID-ATLANTIC BUILDER Navy-Marine Corps

is a publication of HBAM Member Memorial Stadium of the Home Services, Inc., a subsidiary Builders Association Annapolis, MDof Maryland, Inc., 6030 Daybreak Circle #A150 PMBJuly 362 21 Clarksville, MD 21029 410-265-7400, www.homebuilders.org.

t last

er

s featured on

Postmaster: Send address changes to Home Builders Association of Maryland, Inc., 6030 Daybreak Circle #A150 PMB 362 Clarksville, MD 21029

ECO BOX Mid-Atlantic Builder text and cover pages are printed on SFI certified Anthem Plus Gloss using soy ink.

sage

MBIA Reception at MACO Seacrets Ocean City, MD August 18

Helps You Reach The 2012 IECC Energy Code Southern Requirements At Lower Maryland Construction Costs!

Crab Feast Olde Breton Inn

Golf Outing at Leonardtown, MD August 24 MACO The Enviro-Dri Weather-Resistant Barrier reduces the ®

Manper O Warhour at Glen(ACH), Riddle giving you the greatest flexibility in r Berlin, MD energy code targets, at a construction cost that’s equa August 18 current costs.

By reducing air changes, construction options and s

• Retain your current 2x4

• R-38 blown ceiling insu path code requirements

• You can meet the 2012 sheathing or 2x6 walls.

BUILD Maryland text and cover pages are printed on SFI certified Anthem Plus Gloss using soy ink.

The Sustainable Forestry Initiative® program promotes sustainable forest management.

• The Sustainable Forestry Initiative® program promotes sustainable forest management.

2

Contact Eddy Esplund, Tremco Barrier Solutions, to sche “Energy Trade-Off Analysis” on your most popul Enviro-Dri WRB can reduce air changes, reduce your co you meet the 2012 IECC code.

EDDY ESPLUND, CSI-CDT AT 609 EESPLUND@TREMCOINC.C

ger

ke a positive s through

BUILD Maryland is published bimonthly by MBIA—the Maryland Building Industry Association, 11825 West Market Place, Fulton, MD 20759. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of MBIA. The publisher reserves the right to accept or reject any editorial or advertising matter at its discretion. The publisher is not responsible for claims made by advertisers. POSTMASTER: Send change of address to MBIA, 11825 West Market Place, Fulton, MD 20759, USA. © 2016 MBIA. All rights reserved.

BUILD MARYLAND

July/August 16

SAVE UP TO

$2000

*

on select GE Appliance Packages only at

*Purchase 3 or more eligible GE Profile Series or select GE products from March 23, 2016 to July 31, 2016 at any Appliance Distributors Unlimited location and ADU will match the GE rebate depending on the number of appliances GE Rebate $1,000 - Purchase 7 eligible Appliances $850 - Purchase 6 eligible Appliances $750 - Purchase 5 eligible Appliances $500 - Purchase 4 eligible Appliances $300 - Purchase 3 eligible Appliances ADU will match your GE Rebate!

KNOWLEDGE EXPERIENCE SELECTION INSPIRATION APPLIANCE DISTRIBUTORS UNLIMITED OFFERS THESE QUALITIES TO ANYONE LOOKING FOR MODERN KITCHEN APPLIANCES. OUR PROFESSIONAL APPLIANCE ASSOCIATES HAVE FACTORY TRAINING AND YEARS OF EXPERIENCE TO ASSIST YOU IN CREATING YOUR DREAM KITCHEN. Baltimore, MD Gaithersburg, MD Takoma Park, MD Chantilly, VA York, PA 410.789.8000 240.650.6000 301.608.2600 703.263.2300 717.845.6500

PRESIDENT’S MESSAGE

The exclusive magazine of MBIA

SUMMER SLOWDOWN?

S

ummer time is associated with great memories of family getaways, time spent on the beach, in the mountains or traveling to far-away places. The days are longer, we spend more time outside, and people are generally in good spirits. I do find it a little ironic that we spend the year focusing on homes yet we all leave our homes to get away. I do hope that everyone is able to get away this summer and enjoy some rest and relaxation with friends and family. In our business, we all need to take some time to slow down, decompress and recharge.

Summer is typically a time where our industry sees a leveling off in sales activity.

Most of us experienced a good spring market. Our production departments, however, will not see any slowdown as they are in full swing delivering all those new homes that were sold. Fortunately, it looks like a healthy spring market has continued into the summer.

Summer is a good time to take stock of what has worked and what adjustments need to made. Taking that time away gives us a chance to step back and reassess our businesses. Whether it is your marketing efforts, financing, production methods, or other business related concerns, we all can find ways to improve our processes. A good place to turn are the various and sundry events, training sessions, and award functions that your MBIA offers. Now is the time to sign up for the events that are coming up this fall. Just go to the MBIA website for the full calendar.

Speaking of your MBIA, one area that doesn’t slow down is the work that is being performed on our behalf by this team of dedicated professionals. They continue to be hard at work recovering from the legislative session, preparing for bills that were sent to summer study and trying to anticipate what may be coming down the pike. They are also laying the ground work and making plans for the many events coming up in the second half of the year. Just a quick peak at the calendar shows that there is barely a day on which there is isn’t an event scheduled.

One blessed area of slowdown it on the political front. With the primaries and conventions now behind us, we finally get a break from the barrage of coverage and political messages. At least we have a few months of respite until the campaign season picks up in full force this fall. No matter what your view of the world is, we are in for quite a ride. This is one summer slowdown that I think we all can agree is welcome.

Wishing everyone a safe and enjoyable summer season!

2016 MBIA LEADERSHIP EXECUTIVE COMMITTEE President, David Lunden 1st Vice President, Steve Breeden Vice President Advocacy/ State, Mike McCann Vice President Advocacy/ Washington Market, Hillary Colt Vice President Advocacy/ Baltimore Market, Steve Smith Vice President Advocacy/ Eastern Shore, Jeff Caruso Vice President, Associates, Peggy White Treasurer, Kimberley Palmisano Secretary, Mike Schueler Life Director, Mark Bennett Immediate Past President, Tom Baum Legal Counsel, Jack Orrick

CHAPTER PRESIDENTS Advocacy/Anne Arundel County, Jim Krapf Advocacy/Baltimore City, Sean Davis Advocacy/Baltimore County, David Murphy Advocacy/Carroll County, Jim Mathias Advocacy/Charles County, Doug Meeker Advocacy/Eastern Shore, Bob Purcell Advocacy/Howard County, Jamie Fraser Advocacy/Montgomery County, Raquel Montenegro Advocacy/Prince George’s County, Ken Dunn Advocacy/Southern Maryland, Tom Thomas Advocacy/Upper Chesapeake, Michael Charlton Advocacy/Washington DC, Stephen Alfandre

COUNCIL CHAIRS Builder Mart, Joe Fleury Custom Builders Council, Larry Cafritz Green Building Council, Tom Marsten Land Development Council, Sandy Marenberg Multifamily Housing Council, Tom Marshall Professional Women in Building Council, Maggie Witherup Remodelers Council, Joe Smith Sales & Marketing Council, Yvonne Deardorff

MEMBERS AT LARGE Brian Afnan Tim Ellis Miti Figueredo Howard Katz Mark MacFarland

Timothy Morris Cindy Plackmeyer Dusty Rood Robert Spalding Alex Villegas

SUBSIDIARIES Builders Development Guaranty Group/President, Scott Nicholson Home Builders Care Foundation/President, Chris Rachuba PUBLISHER Lori Graf, CEO lgraf@marylandbuilders.org EDITOR Kelly H. Grudziecki Director, Internal Communications kgrudziecki@ marylandbuilders.org

ADVERTISING Chris Baughan Sales Manager cbaughan@marylandbuilders.org DESIGN The YGS Group Creative Director, Serena L. Spiezio Graphic Designer, Zon Buckley Account Manager, Tamara Smith

DAVID LUNDEN President, MBIA

4

Maryland Building Industry Association 11825 W. Market Place Fulton, MD 20759 Ph: 301-776-MBIA www.marylandbuilders.org Info@marylandbuilders.org

BUILD MARYLAND

July/August 16

RESIDENTIAL ELEVATORS

RELIABILITY

·

SAFETY

·

INNOVATION

Expertly Installed and Maintained By

Visit Our Showroom!

Suite I - 7 West Aylesbury Road, Timonium, MD

premierlifts.com

Call Now for a Free Estimate 1.800.688.6116

CEO MESSAGE

IT TAKES A TEAM

W

elcome to the July/August issue of your award-winning magazine! You heard it right, award-winning. BUILD Maryland recently received an Association Excellence Award from the National Association of Home Builders for Best Publication in our size category. I am excited to attend the NAHB Association Leadership Institute in San Antonio later this month to receive the award in person. This achievement is a significant accomplishment for which we are very proud. I want to give kudos to Kelly Grudziecki, MBIA’s director of internal communications and the editor of BUILD Maryland. She works very hard on the magazine and it shows. Last year, after the merge, she took the magazine through a complete redesign and editorial overhaul. You can be sure there is something for everyone in each issue and she is diligent about featuring our members’ accomplishments. Also helping to make the magazine a success is Sales Director, Chris Baughan, who works hard to find top notch advertisers that makes BUILD Maryland a revenue source for the association. Bottom line; BUILD Maryland gives you the articles and stories you want to see in your association magazine. This award is validation of how hard we are working at MBIA to serve you, our members. It takes a team and our MBIA team is dedicated to providing you with the best education, events, advocacy, networking, publications and member service we possibly can. We understand your membership is a choice and we are confident that we make it worth every penny to you.

The cover story in this issue features the MBIA Custom Builder awards. To pull together a custom home like the ones featured here it also takes a team; a team of our members. The planning starts with the land developers, the engineers, the architects and the builder. Once the land is ready, the building starts and everything needs to be just right. Hundreds of subcontractors and suppliers do their job and find the perfect materials to make the project come to life. Don’t forget about all the work completed by the sales people, title companies, insurance companies and mortgage companies to get the paperwork signed, sealed and delivered. Then comes the work of the interior designers. They pick the perfect fabrics and select the exact right furniture and décor to make the rooms impeccable.

As you can tell by all the fantastic photos in this feature, these homes are exceptional. The wine cellar and tasting room has a spot for every bottle and every glass.

Unobstructed views, via accordion doors, give way to a backyard oasis with a bubbling hot tub. Dual staircases frame the marble entry and coffered ceiling. The kitchen island opens to the cozy family room. Every detail is carefully considered, and in a custom home, tailored specifically to the homeowner using top-of-the-line materials.

These magnificent homes are the product of years of experience and teamwork.

All of these people come together to make the homeowner happy, just like our MBIA team comes together to make our members happy and help them succeed. We are very proud of our recent award and these Custom Builder Award winners should be just as proud of theirs. Congratulations to all of the winners.

LORI GRAF CEO, MBIA

6

BUILD MARYLAND

July/August 16

G&K SERVICES Delivering Uniform Service Excellence G&K Services has been a leader in the uniform rental and facility services industry for more than 100 years. G&K is committed to enhancing your business image and ensuring your employees’ safety each and every day. Companies like yours throughout North America put their trust in G&K Services for their uniform rental, apparel purchases, and facility services needs.

Members save up to 20% off* standard pricing

AD

Plus, free site assessment and free cost comparison

*20% discounts are for new G&K customers. Existing G&K customers may be eligible for discounts upon expiration of their current agreement term.

Call 713–967–6214 or visit eMemberBenefits.com/NAHB to enroll and a G&K representative will contact you.

LEGAL BRIEF

LETTER OF INTENT TOOLBOX FOR THE MARYLAND HOME BUILDER

BY BOBBY BAGHERI, MILLER, MILLER & CANBY

In a bullish residential real estate market, the quick acquisition of property can directly improve a Maryland homebuilder’s bottom line. The letter of intent allows a homebuilder to get the essential terms of a proposed transaction down on paper and indicates a seriousness in moving forward. In regards to unlisted property, an agile homebuilder wants to get their feet in the door first and a letter of intent may be the most efficient method of identifying the main deal terms before spending further time and money as well as possibly inducing the seller not to further market the property.

In the real estate arena, parties typically view the letter of intent as a non-binding preliminary agreement and enter into one with the expectation that the parties will eventually negotiate a final agreement based upon the letter’s terms. Recent court cases in the Maryland, however, have challenged the widely-held assumption that the letter of intent is non-binding.

In 2013, a Maryland case was heard that involved a dispute over whether a letter of intent to enter into an residential purchase agreement was binding on the parties. The letter contained the material deal terms and provided that a Realtor contract would be signed at a later time, but the letter did not explicitly contain the non-binding language. The court held that since the parties did not show an intent to be bound, the letter of intent was non-binding even though the letter did not contain such non-binding language.

In a court case published early last year, however, Maryland’s highest court ruled that a letter of intent can constitute a valid contract under which enforcement can be ordered. The court stated that letters of intent fall into four categories: (1) the parties state that they do not intend not

8

BUILD MARYLAND

July/August 16

to be bound; (2) the parties state that there are one or more matters on which agreement has not yet been reached; (3) the parties express definitive agreement on all necessary terms, but are silent as to other provisions typically included in similar agreements; and (4) parties are in definitive agreement as to necessary terms and expressly state their intention that the letter of intent forms a binding contract.

The court ruled that letters of intent that fall within categories three and four are valid and enforceable contracts.

With this in mind, the savvy homebuilder must be aware of the legal conse-

quences of entering into a letter of intent.

For instance, there may be situations where the homebuilder does not intend to be bound by the letter of intent and merely views it as a framework upon which to base a future deal. In this situation, the homebuilder may want to express their seriousness in obtaining the property, but wants maximum flexibility in walking away from the deal without consequence. In these situations, it is imperative in light of the new Maryland court rulings that the letter contain express non-binding language such as the following: “This letter of intent is only

intended to be a non-binding expression of interest and the parties agree that neither is bound by its provisions. This letter of intent sets forth some, but not all, of the terms of the purchase agreement, and other material terms remain subject to negotiation. Neither party will be legally bound until both parties have executed the purchase agreement.”

Homebuilders may also find themselves in a situation where both parties are not ready to fully commit to a deal, but the homebuilder has an interest in keeping the seller from marketing to other potential buyers. The homebuilder may want to include a no-shop clause or a confidentiality clause, but still retain the option to walk away. In these situations, the homebuilder can add the non-binding language described above, but expressly carve out the no-shop or confidentially provisions in order to make

those provisions enforceable and binding.

This can be accomplished by adding the following to the end of the non-binding disclaimer language: “Notwithstanding the foregoing, the parties agree the no-shop clause and the confidentially clauses are binding upon the parties.”

If the homebuilder intends for the letter of intent to form a binding contract, then the parties need to expressly state such intention. Even though the parties may intend for the letter of intent to be final, however, the homebuilder must be aware that certain Maryland statutes will still allow a potential purchaser of certain single family residential real property to rescind the “contract” if the purchaser does not receive a completed property disclosure or disclaimer statement before entering into the contract. Section 10-702 of the Maryland Annotated Code allows a purchaser to rescind a purchase agreement at any

time before the receipt of the disclosure or disclaimer statement or within five days following its receipt. Section 10-702(k) states that this right to receive the disclosure or disclaimer cannot be waived and any attempted waiver is void. Therefore, if the homebuilder enters into a binding letter of intent, then the homebuilder should either request delivery of the statements when signing the letter or understand that they will have a statutory right to rescind until the completed statements are received.

Bobby Bagheri is an attorney in the real estate transactional group at Miller, Miller & Canby.

His practice includes commercial and residential purchase and acquisitions, leasing and representation of homebuilders throughout the State of Maryland. He can be reached at BBagheri@mmcanby.com.

Safety, Savings & Services Chesapeake Employers Insurance offers qualifying MBIA members an exclusive workers’ compensation insurance program.

MBIA members could save

5%

off Chesapeake Employers’ eligible tiers*

Ask your agent for a quote or visit ceiwc.com

*Minimum eligibility requirements apply.

marylandbuilders.org

BUILD MARYLAND

9

LEGISLATIVE WRAPUP

MARYLAND GENERAL ASSEMBLY 2016 LEGISLATIVE SESSION: ONE FOR THE RECORD BOOKS

BY KATIE MALONEY, MALONEY & ASSOCIATES

It is typical for the second session in the four-year election cycle to by busy-sometimes very busy. It stands to reason that when there is a Republican Governor, the predominantly Democrat Legislature is busier than usual. All that being said, very few predicted the huge volume of bills, unprecedented quick start, and down to the wire negotiations that were all packed into the 2016 Session.

Over 2,800 pieces of legislation were introduced in the Senate and the House but there were almost 4,000 bill requests made by the 188-member General Assembly. Many of the requests were either duplicative or missed the bill introduction deadline. Of the 2,800 bills introduced, the Maryland Building Industry Association (MBIA) reviewed more than 200 of them to determine potential impacts to the building and development industry.

Overall, fewer bills passed this year than in a typical year with 834 measures being approved by both chambers and awaiting Governor Hogan’s signature. The Governor vetoed two pieces of legislation before the General Assembly adjourned, forcing a veto override vote in early April. The measures addressed transportation project budgeting and Anne Arundel County School Board membership.

ENVIRONMENT AND LAND USE Environment and land use issues are always at the core of the industry’s interests. This year there were bills that created both challenges and opportunities for the industry. The most significant challenge was a bill that would have allowed almost any citizen to appeal a locally legislated land use decision like a comprehensive plan or a comprehensive rezoning. The impact of such a measure would have been significant in undermining any predictability in local

10

BUILD MARYLAND

July/August 16

land use decisions. Our members were fully involved in opposing this measure through a series of action alerts and the bill was withdrawn in the House and was not voted on in the Senate. The industry supported a measure that dealt with wetlands mitigation banking. The bill passed and is awaiting the Governor’s signature and will provide new opportunities for developers to meet their wetlands mitigation requirements.

The measure removes some of the statutory impediments to creating and utilizing banking as a mitigation alternative.

We look forward to working with the Maryland Department of Environment on implementing these new guidelines.

BUILDING CODES AND LICENSING Building codes have become a hot-button topic in recent years and this year was no exception. There was a measure introduced that would have repealed the sprinkler requirement for single family homes and a bill to restrict the use of wood framing in multifamily construction, both of which died. One measure that passed and was signed into law extends the time frames under which the State and local code departments have to adopt updated code provisions. Another codes-related bill would have required builders to provide energy efficiency options to new home buyers at contract.

This issue will be studied by the industry

and other interested stakeholders this summer. There were licensing bills dealing with Home Builder Registration fees and the repeal of the subcontractor license within the Maryland Home Improvement Commission. In addition, there will be a summer study related to the home improvement industry on enforcement and the practice of doorto-door sales. The industry was named to the task force and will participate in a series of meetings to develop recommendations to the licensing board.

COMMON OWNERSHIP Common Ownership related bills reviewed by MBIA included the condominium warranty claims bill that expanded standing of the Association to litigate construction defect claims, a bill that would require all common ownership communities to register with the State Department of Assessments and Taxation, and a measure that would have changed the voting thresholds for an association to approve

“Of the 2,800 bills introduced, the Maryland Building Industry Association reviewed more than 200 of them to determine potential impacts to the building and development industry.”

changes to the declarations and governing documents. None of these bills passed but all are expected to be introduced again next year.

TAXES Most of the tax measures died this year for lack of consensus. However, a bill that the industry supported to provide an exemption for related entity transfers from the controlling interest transfer tax passed.

There was a measure aimed at providing relief to homeowners on the eastern shore and in western Maryland that would have provided an income tax credit to offset the cost of installing sprinkler systems in smaller new homes. Lastly, there was a tax credit bill that would have provided assistance to homeowners making remodeling improvements to allow accessible or visitable features in existing homes.

The interim is expected to be very busy with summer work that includes energy efficiency components in new homes, home improvement licensing sales and compliance review, a work group on the paid sick leave initiative and of course a substantial number of regulations under review for possible revision through the Regulatory Reform Commission.

Katie Maloney is a principal at Maloney & Associates and she is the Sate Lobbyist for the Maryland Building Industry Association. For a complete report or for more information about these or related issues, please contact Katie Maloney at 410-570-2851 or katmaloney@verizon.net.

Š2013 California Closet Company, Inc. All rights reserved. Franchises independently owned and operated. MHIC 28991

Designs for every room.

Custom designed storage solutions to fulfill your dreams and suit your lifestyle.

Call us today for a complimentary in-home design consultation.

BALTIMORE Sulphur Spring Rd.

SEVERNA PARK Park Plaza

410.247.8088 CaliforniaClosets.com

MD086_ChesH&L_4.6x9.7_0313.indd 1

marylandbuilders.org

BUILD MARYLAND

11

3/6/13 1:55 PM

CASINO NIGHT

LET IT RIDE!

MBIA held its 2nd annual Casino Night on April 14 at Turf Valley Resort. Nearly 100 attendees were given $10,000, (in play money, of course), to risk on Black Jack, Roulette, Craps and Texas Hold’em. For those high rollers for which 10 grand just wasn’t enough, they could ante up real cash for additional stack of chips. At stake for the big winners were prizes ranging from gift baskets to golf foursomes to Orioles baseball tickets. Many thanks to The Rachuba Group, Energy Services Group, Lakeside Title, Owings Home Services, K Hovnanian Homes, Saratoga Insurance and Gramophone Ltd. for donating all the great prizes.

Also helping to make this event possible were our sponsors. Thanks to Presenting Sponsors, Saratoga Insurance and T.W. Perry, Gold Sponsor, Ferguson Enterprises and Supporting Sponsor, SERVPRO.

12

BUILD MARYLAND

July/August 16

Your houses.

Our land.

(Imagine the possibilites.)

Reese Road, Anne Arundel County, MD 30 single family finished lots $205,000 per lot Greenfields @White Marsh Bird River Road, White Marsh, MD 37 single family finished lots $135,000 per lot Phase II 59 single family recorded lots $55,000 per lot

Curtis Farm TDRs Howard County, Maryland 11 eastern TDRs which transfer and add density to subdivisions in eastern Howard County at a density of 1 TDR per 1 additional single family lot 1 TDR for 2 additional town home lots 1 TDR for 3 additional multi-family units $60,000 per TDR

Townhome Lots S. Dolfield Road, Owings Mills, MD $30,000 per lot

Woodlawn Aberdeen, Maryland 103 single family lots plus 14 acre parcel zoned R-3 $6,800,000

Stephen J. Ferrandi, Director of Land Brokerage • Accredited Land Consultant (ALC) licensed through

marylandbuilders.org

BUILD MARYLAND

• 410-290-1110

13

WHY YOUR BUSINESS NEEDS AN

ONLINE SALES COUNSELOR

BY LEAH FELLOWS, BLUE GYPSY, INC.

A

s a home builder, remodeler, or service provider in the Maryland, DC, and Virginia area - to say there is a lot of competition out there would be an understatement.

It’s a fact that over 90% of shoppers begin their search online. Mobile use is at an all time high and people want quick answers. Buyers searching for their next new home, remodel, or service associated with their home are turning to the internet more than 90% of the time. Make sure your doors are open.

WOULD YOU LOCK YOUR MODEL HOME ALL DAY? It all starts with your website. Not only is it imperative to drive traffic to your website, but once prospects get there they need a user friendly experience. Think of the website as if it is a model home. It needs to be eye catching, organized, and make the visitor want to stay for a while, explore and ask questions. It also needs to be open! A model home can’t be open without a sales manager onsite. So why wouldn’t someone be ready to answer questions on the website?

No builder would go through the expense of building a model home without having a competent, knowledgeable company representative inside to help prospective clients.

Yet all too often that is exactly what happens with a website.

14

BUILD MARYLAND July/August 16

We live in an age where people want quick answers, instant gratification, 24-hour customer service. If they don’t get it, they move on.

This is where an Online Sales Counselor (OSC) comes in. An OSC is the face of the company and is likely the first contact a prospect will make with any communities, products, or services. Their role is to provide quick, accurate information, set appointments and assist with sales. The number one job responsibility of an OSC is quick response and follow-up.

Builders who have adapted this role as part of their sales team see on average of 20-25% of their overall sales coming from this online sales position. But higher numbers are not out of the question. An OSC, given the right tools, support, and training with the proper system can account for 32% or higher in overall sales for a company.

For builders who have already implemented this position, this may seem like old news, however, it is still quite common to find non-existent OSC programs, or programs that perform poorly due to improper implementation or an incomplete vision of what this position can really do. There are a variety of reasons for this and it all depends on who is actually filling that role along with their level of training.

WHO SHOULD BE YOUR OSC? Sometimes there is already a person within the organization who may be able to handle the position. It is important to understand that this isn’t a default position. The role needs to be taken on as a primary focus. It is not a side responsibility within the organization. If it’s given last priority in a job description, it will not have the desired results.

The marketing person who deals with all the inventory updates, social media posts, proofs for advertisements, and media plans is not likely to be your OSC. The individual who files all the paperwork, applies for permits, and answers the phones is also not likely to be right for the job. There is a very specific set of qualities and abilities one must look for in order to find a successful OSC.

We live in an age where people want quick answers, instant gratification, 24-hour customer service. If they don’t get it, they move on. marylandbuilders.org

BUILD MARYLAND

15

The marketing person who deals with all the inventory updates, social media posts, proofs for advertisements, and media plans is not likely to be your OSC.

DEFINING THE ROLE While leads ebb and flow there are a variety of responsibilities an OSC can take on as part of their position, but this depends on volume and size of builder. Some builders believe they are too small to have an OSC. This is almost never the case, it’s just a matter of allocating priorities.

The bottom line is that no two builders or organizations are the same. What may be right for keeping one OSC focused and producing may not be the same for another. Remember, it’s not about busy work it is about results.

HANDLING THE LEADS The primary goal of the OSC is to cultivate and nurture all the leads that come their way. All traffic - whether it be phone, email, social media generated or third party sites - should be funneled to the website and guided to this highly trained individual. They handle inquiries, set appointments, and follow-up with a plan.

OSC’s are gatherers procuring information, analyzing and matching each person to the proper community, home, or property.

It’s important to establish a follow-up program. By designing different campaigns and sales processes that are triggered depending on the interest levels of the lead, you’ll be able to deliver touch points, and content to prospects that match their level of interest.

An OSC needs to have the kind of personality that never gives up. Their goal is to create and implement a consistent persistent follow up plan. Even a negative answer of, “No” or “I bought somewhere else,” is a desired response. It’s important to stick with it.

WHY IS A CUSTOMER RELATIONSHIP MANAGEMENT PROGRAM SO IMPORTANT? For an OSC one of the single most important tools is their CRM that organizes a consistent, persistent follow up plan.

A huge chunk of money is spent developing the prefect lead generating website and digital media process. With all cylinders firing, a lot of traffic is driven to the website. It is typical to see about .5-1.5% of unique monthly hits convert into leads – people who actually inquire. Overall the OSC should see about 1-3% from all sources including third party listings, social media and other marketing outlets.

Once these leads inquire, there needs to be a way to implement a detailed follow-up plan, and track the lead. That’s where a robust CRM system comes in that creates a system of reminders, tracking, and follow-up processes to keep in touch with your lead. Without a system it is easy to lose track of a lead in the follow up process.

WHY CAN’T I JUST SEND THE LEADS TO MY SITE AGENTS? The responsibility and focus of an OSC vs. a site manager are different. There are a lot of immediate tasks that are always on the plate of your sales agents. From meet and greets to contracts

16

BUILD MARYLAND July/August 16

and all the steps that take place after the contract is written, an onsite agent is a hunter constantly looking for the immediate kill, the lead that will close within the next few months.

Many site agents do not have the time needed to keep track of long-term leads. With all their other responsibilities they are less likely to track the ones that come in via email and have not yet committed to communication, much less a visit.

That is where the gatherer and nurturer mentality comes in with your OSC. Their focus is different than that of the onsite agent. An OSC stays with that lead over the long haul and realizes that no answer doesn’t mean “no,” it just means “not now.”

LET’S LOOK AT THE NUMBERS Basically of the 1-3% of traffic that should convert from monthly website visits and other marketing, an OSC dialed in to their follow up process and CRM should be turning an average of 20-25% of those leads into appointments. Of those appointments, with a proper handoff between the OSC and site agents, at least 85% should be showing up for the appointments.

Once an appointment shows up onsite, it is now out of the hands of the OSC and into the site agent’s wheelhouse.

Yet when an OSC does their job properly they are sending highly qualified leads on for appointment 30-35%, and in some cases even more, of those appointments should convert into a sale.

To achieve these numbers, it starts with driving traffic to a user friendly website. It’s not enough to just have the website, the online model needs that dedicated person who knows the company inside and out. When that person is the right person with the right priorities they will convert leads into sales and represent at least 20-25% of the over all sales for the company. With the right support, systems, and people in place these numbers may increase to nearly a third of the company’s overall sales.

Leah Fellows is a professional online sales trainer and consultant and founder of Blue Gypsy Inc. In 2010, after being the face of online sales programs for builders in the Virginia Beach area she created and perfected her own online sales training program and works with builders nationwide helping them create and improve their online sales programs. Contact Leah at Leah@bluegypsyinc.com, 804-384-7555 or www.bluegypsyinc.com.

marylandbuilders.org

BUILD MARYLAND

17

CUSTOM BUILDER

AWARDS Spec, Spectacle, Spectacular!

Custom homebuilders and architects throughout the greater Baltimore and Washington region were awarded top honors for their fine design and quality workmanship in the MBIA Custom Builder Awards on June 2 at the Bethesda Pooks Hill Marriott. This year saw a large number of entries in the speculative categories; perhaps a sign of an improving market and growing builder confidence. While a good deal of the entries came from the Bethesda/Chevy Chase area of Montgomery County, a location ripe with tears-downs, we also received projects from Baltimore and Anne Arundel County as well as the District of Columbia.

Over two long days, a diverse team of judges viewed both interior and exterior of the homes in addition to reviewing detailed written information, photographs and plans.

In this competitive custom housing market, all of these winners are shining examples of the talent and expertise that our area has to offer.

18

BUILD MARYLAND July/August 16

GOLD AWARD

Custom Traditional Home GTM Architects Builder: PKK Builders Washington, DC

SILVER AWARD

Custom Traditional Home Three Brothers Land Company Architect: Claude C. Lapp Architects, LLC Bethesda, MD

marylandbuilders.org

BUILD MARYLAND

19

GOLD AWARD

Custom Contemporary Home Sandy Spring Builders, LLC Architect: GTM Architects Washington, DC

SILVER AWARD

Custom Contemporary Home Studio Z Design Concepts Builder: Sandy Spring Builders, LLC Bethesda, MD

20

BUILD MARYLAND July/August 16

GOLD AWARD

Custom Transitional Home Finecraft Contractors, Inc. Architect: Thomson & Cooke Architects Bethesda, MD

SILVER AWARD

Custom Transitional Home Sandy Spring Builders, LLC Architect: GTM Architects Bethesda, MD

marylandbuilders.org

BUILD MARYLAND

21

BRONZE AWARD

Custom Transitional Home Douglas Construction Group, LLC Architect: Claude C. Lapp Architects, LLC Bethesda, MD

GOLD AWARD

Speculative Transitional Home Carter, Inc. Architect: Studio Z Design Concepts, LLC Bethesda, MD

22

BUILD MARYLAND July/August 16

SILVER AWARD

Speculative Transitional Home Laurence Cafritz Builders Architect: GTM Architects Washington, DC

BRONZE AWARD

Speculative Transitional Home Jeffco Architect: GTM Architects Rockville, MD

Builders and Developers Rely on Us • Acquisition & Development Contracts • Homeowners Associations • Condominium Associations • Commercial Associations & Condominiums • Title – Analysis, Problem Solving & Counsel; Authorized Agent • Joint Venture Agreements

• Builder Disclosures • Project Due Diligence • Purchase and Sale of Deferred Water & Sewer Charges • Land Use & Zoning • Commercial Real Estate Settlements

• Development Agreements, Easements, Shared Use Agreements & Subordinate Rights • Commercial Real Estate Transactions & Financing • Homebuilding Licensing & Regulations • Financing Packages • Consumer Sales Contracts • Private Water & Sewer Companies & Declarations

1901 Research Blvd, Suite 500 • Rockville, MD 20850 • 301-251-1180 • mcmillanmetro.com

Choose knowledge, strategy and results marylandbuilders.org

BUILD MARYLAND

23

GOLD AWARD

Speculative Green Home Mid-Atlantic Custom Builder Architect: Lessard Design Bethesda, MD

GOLD AWARD

Custom Home between 3,500-5,000 sq. ft.

Studio Z Design Concepts, LLC Builder: Chase Builders Bethesda, MD

24

BUILD MARYLAND July/August 16

SILVER AWARD

Custom Home between 3,500-5,000 sq. ft.

Castlewood Consulting, LLC Architect: James McDonald Bethesda, MD

BRONZE AWARD

Custom Home between 3,500-5,000 sq. ft.

Sandy Spring Builders, LLC Architect: Studio Z Design Concepts, LLC Bethesda, MD

GOLD AWARD

Custom Home between 5,000-7,500 sq. ft.

Baldwin Homes, Inc. Architect: Robert Berry Jr., AIA Arnold, MD

marylandbuilders.org

BUILD MARYLAND

25

SILVER AWARD

Custom Home between 5,000-7,500 sq. ft.

GTM Architects Builder: Allegheny Builders Bethesda, MD

BRONZE AWARD

Custom Home between 5,000-7,500 sq. ft.

Studio Z Design Concepts, LLC Builder: Cheshire Homes Washington, DC

GOLD AWARD

Custom Home between 7,500-12,500 sq. ft.

Sandy Spring Builders, LLC Architect: GTM Architects Potomac, MD

26

BUILD MARYLAND July/August 16

WE’LL HELP YOU SAVE

AND BUILD YOUR BUSINESS. Set your business apart from the competition and meet the growing demand for energy-efficient new homes while earning rebates on every eligible home you build that meets ENERGY STAR® standards.

Earn valuable rebates from Delmarva Power and Pepco* ■

Get $1,250 for every certified single family home

■

Get $750 for every certified townhouse

■

Get $550 for every certified 2-on-2 condominium

■

Get $400 for every certified multifamily low-rise unit

ADDITIONAL BENEFITS INCLUDE: • Technical training and marketing resources to help you build and sell energy-efficient homes • Support at every step from a dedicated program manager • Visibility on delmarva.com or pepco.com as a participating homebuilder, connecting you to interested prospects

SIGN UP ONLINE TODAY OR CALL FOR ADDITIONAL INFORMATION. Visit delmarva.com/builders or call 1-866-353-5799.

Visit pepco.com/builders or call 1-866-353-5798.

75% of consumers expressed interest in owning an energy-efficient home during a 2012 survey.** We can help you be the builder of choice. *For homes permitted on or after April 1, 2015, featuring 90% LED or CFL lighting. Visit online for rebates on homes permitted before April 1, 2015. **Source: energystar.gov, 2012 marylandbuilders.org BUILD MARYLAND This program supports EmPOWER Maryland. © Delmarva Power and Pepco, 2016

27

SILVER AWARD

Custom Home between 7,500-12,500 sq. ft.

Battaglia Homes, LLC Architect: GBL Custom Home Design Inc. Lutherville-Timonium, MD

BRONZE AWARD

Custom Home between 7,500-12,500 sq. ft.

Washington Metropolitan Homes Architect: Claude C. Lapp Architects, LLC Rockville, MD

28

BUILD MARYLAND July/August 16

GOLD AWARD

Custom Home over 12,500 sq. ft.

Castlewood Consulting, LLC Architect: Castlewood Consulting, LLC Bethesda, MD

GOLD AWARD

Speculative Home between 3,500-5,000 sq. ft.

Washington Metropolitan Homes Architect: Claude C. Lapp Architects, LLC Bethesda, MD

marylandbuilders.org

BUILD MARYLAND

29

GOLD AWARD

Speculative Home between 5,000-7,500 sq. ft.

Zander Homes Architect: Joseph Brandli Sparks, MD

SILVER AWARD

Speculative Home between 5,000-7,500 sq. ft.

Castlewood Consulting, LLC Architect: Castlewood Consulting, LLC Bethesda, MD

30

BUILD MARYLAND July/August 16

BRONZE AWARD

Speculative Home between 5,000-7,500 sq. ft.

Washington Metropolitan Homes Architect: Claude C. Lapp Architects, LLC Rockville, MD

Congratulations to all the winners!

To see more pictures of these winning homes, visit

www.marylandbuilders.org Finally, a special thank you to Home & Design magazine, our Official Media Partner, as well as to our sponsors, who helped make the Awards Dinner a night to remember.

Our Wine Sponsor was Details Deconstruction.

Our Gold Sponsors were Vintage Security and Wells Fargo.

marylandbuilders.org

BUILD MARYLAND

31

32

BUILD MARYLAND July/August 16

The Mystery of

Surveying [ PART 3 [

BY DAVID S. THALER, P.E., L.S., F., ASCE, F., NSPE, D.S. THALER & ASSOCIATES, INC.

O

nce, not long ago, one of the area’s most prominent real estate lawyers called and asked if he could see me about a large shopping center in Harford County. He represented the lender who had foreclosed. I said, of course, and we agreed to meet the next day at my office.

When I arrived, I found that he had preceded me and that our rather large conference room table was covered nearly six inches deep in legal documents. I asked what the problem was and he responded, “We think the shopping center is built on somebody else’s property.” Indeed it was−by seven feet! Although nearly every conceivable legal document and certification had been required and executed, no one had thought to ask for a “wall check” or foundation survey. Oops! That became a very expensive seven feet.

In the construction business there are generally three types of surveys that are frequently encountered. The first are the ubiquitous Location Drawings.

Formerly known as Location Surveys, Location Drawings accompany nearly every residential settlement and are simply drawings of the property boundaries with the house and any structures shown. These drawings serve a very important function but they are not a survey. They accompany the lending package when mortgages are bundled and sold in the secondary market. It is important that the ultimate buyers of the mortgages knows that somebody has been out to the site and has reasonably determined that their mortgage properly underlies the improvements. But they are not surveys at all and have caused a great deal of confusion in the past. The Code of Maryland Regulations (COMAR) provides that a surveyor may not accept compensation for preparation of location drawings unless the surveyor has received an executed approval form from the consumer that contains the following disclaimer: A location drawing is not a boundary survey and cannot be relied upon by anyone to show where the property boundaries are. The only purpose of the location drawing is to provide some assurance that the improvements are located on the property. This assurance is for use of a lender or an insurer only.

marylandbuilders.org

BUILD MARYLAND

33

Accuracy is how close a measurement or series of measurements are to the true value.

Precision is how close a series of measurements are to each other.

34

BUILD MARYLAND

March/April 16

A second type of survey frequently encountered is a boundary survey, the purpose of which is to establish, reestablish or describe the physical location and extent of property boundaries. Boundary surveys are for locating boundaries and do not necessarily show houses or other improvements on a property nor easements, rights-of-way or other title elements.

It is not uncommon, of course, for there to be conflicts with title or zoning conditions and so in recent years almost all commercial closings have come to require what is now known as ALTA/NSPS Land Title Surveys, or “ALTA surveys” for short.

An ALTA survey is a special type of boundary survey prepared according to a set of standards jointly adopted by the American Land Title Association and the National Society of Professional Surveyors. Additionally, an ALTA survey shows improvements, easements, rights-of-way and other elements that affect the ownership of land. The ALTA/NSPS Land Title Survey is specifically designed to meet the special needs of the title insurance industry and enables title insurance companies to insure the title to land without taking exception as to survey matters. The ALTA/NSPS specifications require that the surveyor indicate all buildings on the land, the distances from the property lines as well as any encroachments. It also shows any evidence of easements that are visible and plots the location of all easements and rights-of-way that are capable of being plotted from the title report.

The specifications that the surveyor performing the survey must follow are entitled: “The Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys.” These were formerly known as ALTA/ACSM surveys, ACSM standing for the American Congress of Surveying and Mapping, but the ACSM was absorbed into NSPS and the title has changed. After much work and debate, new minimum standard details were adopted, effective February 23, 2016. Together with the earlier 2011 version, there were substantial changes. In 2011 there were a number of important changes. First, a “Relative Positional Precision” standard was adopted in lieu of “Relative Positional Accuracy.” Accuracy is how close a measurement or series of measurements are to the true value. Precision is how close a series of measurements are to each other. Surveying is quite precise but is not necessarily accurate, for the true value of any measurement can never be known due to inherent inaccuracies in the measuring devices and the randomness of measurements themselves. The 2016 standard now requires a “Relative Positional Precision” of a survey point to a 95 percent confidence level.

In addition, in 2011 the required certification was changed.

Very frequently title companies would have surveyors certify all sorts of things far beyond the surveyor’s knowledge. For example, that the property did not have any zoning violations, that there were no wetlands, that it wasn’t within a floodplain, etc. As a result, an ALTA/NSPS survey is now required to have a standard certification that cannot be altered, which in

relevant part states, “This is to certify that this map or plat and the survey on which it was based were made in accordance with the 2016 Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys ….”

There have been a number of other changes to the 2016 specifications which include more clarity as to the surveyor’s responsibility with regard to research and...

• Making it mandatory that observed utility features are shown; • Surveyors are discouraged from changing the legal description but if a new description must be created, there must be a note explaining why and how the land in the new description relates to the previously described land in the record description; • Providing for a zoning letter from a qualified attorney to the surveyor before zoning issues can be addressed; • If there has been a field delineation of wetlands conducted by qualified specialist hired by the client, the surveyor will locate any delineation markers observed and if no markers were observed, the surveyor will so state.

It is been our recent experience that title searchers are going further back, at least 100 years, and seem to be picking up more issues of title. The ALTA survey locates these encumbrances to the extent that they can be plotted. Needless to say, restrictions of title can severely affect the value and development potential of any property. There is a rather famous case recently in Florida of a one million dollar house that was built entirely on the wrong property. Much more common are proposed developments that conflict with some element of title, which could be an easement, covenant, setback or other restriction. Needless to say, it is highly recommended that anyone considering purchasing property obtain both a survey and title report. Anyone failing to do so takes a great risk.

David S. Thaler, PE, LS, F., ASCE, F., NSPE is the President of D.S. Thaler & Associates, Inc., a civil and environmental engineering and surveying firm in Baltimore, Maryland, which has designed hundreds of communities. Repeatedly honored, he is a Fellow of both the American Society of Civil Engineers and the National Society of Professional Engineers, and is Guest Scholar at the University of Baltimore School of Law, where he lectures on land use. He has published more than 200 articles and five books, and has won numerous life time achievement awards including Icon of the Industry. He also holds both the highest professional engineering award in Maryland, now known as the Thaler Prize, and the Maryland Distinguished Service Cross, Maryland’s highest military honor.

marylandbuilders.org

BUILD MARYLAND

35

36

BUILD MARYLAND July/August 16

HOME BUILDERS CARE’S 4TH ANNUAL BULL & OYSTER ROAST

SOGGY BUT SUCCESSFUL

O

n May 12, the Maryland home building community joined together at the Home Builders Care’s 4th annual Community Builders Bull & Oyster Roast. At the fundraising event, Dick Pettit, President and CEO of Pettit Companies and a past president of the Maryland-National Capital Building Industry Association was the guest of honor.

The Bull & Oyster Roast took place at Pleasant Prospect Farm, a beautiful horse farm in Brookeville, and featured pitmeats, an oyster bar, live jazz, good cheer as well as the MBIA’s Professional Women in Building Council’s Career Clothing & Accessories Drive.

A highlight of the evening was the presentation of the Robert L. Mitchell Founders Award for a lifetime of distinguished com-

munity leadership to Mr. Pettit. Bestowing the honors was the award’s namesake Bob Mitchell, a past-president of both the Maryland-National Capital Building Industry Association and the National Association of Home Builders (NAHB) as well as the founder of the Home Builders Care Foundation (HBCF) over 30 years ago. Two special citations commending Mr. Pettit were issued by both the Montgomery County Executive and the Montgomery County Council for the occasion.

More than 200 friends and 32 sponsors participated in the event, which raised close to $35,000 for HBCF’s charitable construction program. We thank you for your support and look forward to next year’s event!

Thank You to Our 2016 Bull & Oyster Roast Sponsors PRIME

CHOICE

STOCK

Best Tile

The Magruder Companies

Amberlea Photography

Bryant Group

Natelli Communities

ECS Mid-Atlantic

Creig Northrop Team of Long & Foster Real Estate

Rodgers Consulting

Liberty Homebuilder

Shulman Rogers

Michael Harris Homes

Land Design & Development, Inc.

Wetland Studies

National Housing Endowment

Mid-Atlantic Builders, Inc. Mitchell Best Homes Pettit Family Charitable Foundation Rutter Project Management Shelter Systems

Renewing Montgomery

SELECT Charles P. Johnson Associates Fraser Forbes

Robert A. Tull Security Development Washington Gas

Goodier Builders Gutschick Little & Weber Hutchinson & Associates Insurance Associates Macris Hendricks & Glascock Monument Construction Pleasants Development Pulte Group W.F. Wilson and Sons Winchester Homes

marylandbuilders.org

BUILD MARYLAND

37

ENGINEER’S TOOLBOX

BASICS OF RESIDENTIAL DESIGN TAHIR RIAZ, PEG LLC

T

he Air Conditioning Contractors of America (ACCA), has for years published protocols and procedures that have been the standard best practice method for calculating residential heat loss, gain, duct sizing, equipment and register selection for buildings. These protocols are required by building codes.

A well designed mechanical system can be energy efficient and save the consumer money, in the long run. After the load calculations for a lot are complete and the air flow for each room has been calculated, the next step is to choose the right mechanical system.

Air conditioner, heat pump, furnace, or boiler; all these selections are made after this point. ACCA has a protocol built around this process, known as Manual S. This protocol describes various parameters for numerous mechanical systems. These parameters need to be utilized in order to select the most appropriate system for the house.

Selections are based on the heating and cooling requirements of the house.

After the system has been selected the next step is, duct design. You can have the most accurately done load calculation in the world but if it the air

is not distributed properly in the building, the performance of the system goes out the window.

Manual T and D protocols cover duct design in great detail. Manual T goes over HVAC accessories and their proper placement. Good accessory selection can help alleviate comfort issues. Air stratification, whistling registers, and rattling dampers are common examples of issues that can be prevented by following this protocol.

Supply registers have a greater role in comfort than return grilles, due to the Coanda effect. Coanda effect is described as a low pressure area between the air and the ceiling at or near a supply outlet. The low pressure causes the air flow to cling to the ceiling surface, which increases the supply throw.

On a ceiling, any obstruction will interfere with the airflow being maintained. Changes in the direction of airflow can also have an impact on the Coanda effect. Air always takes the path of least resistance.

For return grilles, one should be placed on every floor of the conditioned area. For heating only purposes, a lower level return is ideal. This is valid regardless of the supply registers location. Hot air rises, but in reality, during the heating season, cold air remains stagnant and always closer to floor than to the

ceiling. In cooling only seasons the air is stagnant near the ceiling, so it’s ideal to put a high side return.

For both heating and cooling seasons, the most efficient location needs to be selected. A single return grille can have some performance issues – unless it’s a high-low return grille combination.

Usually the return grille location is opposite to the supply registers.

Adding a return to every room keeps the delta between conditioned space low, which is ideal. Poor air circulation can lead to performance and distribution issues in a house, the return grilles should be placed away from the supply registers to prevent short circuit of air flow.

Moving on, to Manual D, this is the protocol that guides you with engineering standards to produce a proper duct design. This protocol can help balance the air delivery for the correct amount of air against the friction rate of the ducts and the static pressure required by the system fan. It also goes over different fittings and their impact on the duct system. It’s a very useful tool to calculate the friction rate and equivalent length of the duct system, two factors that can have a serious impact on the effectiveness of your duct design.

The quality of ductwork has a significant effect on the performance

“You can have the most accurately done load calculation in the world but if it the air is not distributed properly in the building, the performance of the system goes out the window.”

38

BUILD MARYLAND

July/August 16

and efficiency of the mechanical system and its air distribution. The ductwork is responsible to carry the air from you system and distribute it around your house. If the ducts are too small they can’t carry enough air to cool or heat the place, large ducts can easily loose air, velocity and all in all the energy, which can translate to financial loss, due to energy inefficiency.

The ductwork system should be configured according to the house layout.

Placing ductwork in conditioned space can help you save money and can help you gain energy points, doing so can also decrease the size of the mechanical system, which can save you money. Placing the system and ductwork in conditioned system can also prevent leakage of air from the ducts to unconditioned space, which can improve your energy consumption.

Standard duct configuration includes radial design in which the mechanical system is in the center with the ductwork radiating outwards. The trunk and branch design is based on a large duct, referred to as a trunk, connected to the smaller ducts known as branched.

Understanding these protocols and implementing them, properly and accurately, produces the best result. It’s crucial to understand these protocols and the science behind them to size a comfortable home.

Tahir Riaz, P.E. graduated from Oklahoma State University as a Mechanical Engineer and works for PEG LLC, in Fairfax, VA as the company’s design lead. He leads the company’s large and small scale design projects, spanning mechanical, electrical and plumbing design fields. He can be contacted at triaz@pegenv.com.

marylandbuilders.org

BUILD MARYLAND

39

STATS & FACTS

STATS & FACTS NEW-RESALE HOME PRICE SPREAD BEN SAGE, METROSTUDY

I

’m not ashamed to admit that I love Craigslist, the “classified advertisements” website that I use as an online garage sale. We donate most of our second-hand items that we no longer use, but occasionally we need to get rid of something nice. My wife rolls her eyes as I pluck an item from the donation pile and start snapping pictures. Rarely have I been unable to find a buyer, as the key is to provide plenty of photos and price it to sell.

I have sold two cars, furniture, baby gear, pet supplies … even toys. To determine an appropriate price, I start by finding out what the item costs as new from the store (thank you, Amazon.com, another favorite resource). I then cut the price in half or more and wait for the buyers to come, as they invariably do. In looking at new versus resale home prices, I’m wondering of existing home sellers are doing something similar as there appears to be a rather wide gap between new and resale housing.

Metrostudy routinely tracks newhome pricing trends, and even though builders have struggled to raise prices in their communities the last couple of years, the median new-home closing price has continued to rise. This is due to 1) rising land prices resulting in higher prices every time a builder opens a new subdivision, and 2) a concen-

40

BUILD MARYLAND

July/August 16

tration of building activity in more strategic locations where prices tend to run higher. According to Figure 1, the median new-home closing price is back to peak pricing levels that occurred in 2006 and 2007. Interestingly, the median closing price of a resale home has been more stable. This is consistent with repeat-sales indices that show relatively little home price appreciation in Maryland post-recession.

In most major metro areas throughout the nation, the spread between new and resale home prices has been rising, and Maryland is no exception. Figure 2 illustrates the percentage difference in new-home pricing over resale. After dropping to 30 percent in 2010, the spread increased back to nearly 50 percent over the past year. This is a very large premium for new over resale, but the analysis is incomplete because it does not account for the mix of product, the age of resales, or sales by geography.

In attempt to reconcile at least two of those shortcomings, we decided to compare the spread between new and resale townhomes. We also limited the townhome product to those units that were built since the year 2000. We used townhomes to mitigate against the wide disparity of single-family product types. Single family can range from smaller product on small lots to large

mansions on estate lots. Townhomes – as a whole – are generally more homogenous.

The graph below illustrates the historical pricing of new townhomes and resale townhomes built since 2000.

Figures 3 and 4 illustrate that the price spread between new and recently built homes is narrower using this approach. The trends indicate that spreads shrank from approximately 15 percent during the boom to just over five percent at the height of the recession. Since then, the new-home spread is back up to more than 20 percent over the last few years and holding.

Buyers are generally willing to pay a premium for new over resale, given product innovation, energy efficiency, the ability to personalize the home, and the lower maintenance costs. Still, it is doubtful that a comparison of comparable product in similar locations would reveal a 20-plus percent premium for new over resale in Maryland. I am aware of one infill builder that assumes a premium of less than 10 percent for a new home over a comparable resale unit. In fact, an analysis of the new versus resale spread for recently built townhomes differs in the eight to 12 percent range when analyzed based on price per square foot, and this is up from four to six percent prior to 2012. Even so, a more thorough under-

Maryland

Maryland

Median New and Resale Home Closing Price History

Percent of Median New Home Price Above Median Resale

$500,000

60% Source: Metrostudy (Analytics)

$450,000

50%

$400,000 40%

$350,000 $300,000

30%

$250,000 20% $200,000

New Homes Resale Homes

$150,000

10% Source: Metrostudy (Analytics)

$100,000

16

15

1Q

14

1Q

13

1Q

1Q

12

11

1Q

09

10

1Q

1Q

08

1Q

07

1Q

06 1Q

1Q

9 1Q 10 1Q 11 1Q 12 1Q 13 1Q 14 1Q 15 1Q 16

8

1Q 0

7

1Q 0

6

1Q 0

1Q 0

1Q 0

5

0%

Maryland Median New and Resale Townhome Closing Price History $450,000 Source: Metrostudy Analytics

$400,000 $350,000

$300,000

$250,000 $200,000

New TH Closing Price Resale TH Built Since 2000

$150,000

5

4

4Q 1

4Q 1

3 4Q 1

2 4Q 1

1 4Q 1

0

9

4Q 1

8

4Q 0

7

4Q 0

4Q 0

06 4Q

5

$100,000

4Q 0

standing of new-home premiums would be best conducted on a neighborhood by neighborhood basis. As we in the industry know, it is all about location.

So the premium for new over resale is not “Craigslist-width” after all, but the current spread between new and resale is currently very wide by historical standards. This is probably due to resale getting a much larger share of first-time buyer product than normal. As resale home prices appreciate and more and more demand pressure is exerted on the supply of first-time buyer housing, it could create an opportunity for homebuilders to supply more entry-level product to the market.

This has been a challenging buyer segment throughout the recovery, but that could change in the next few years as economic recovery progresses.

Maryland Percent of Median New Townhome Price Above Resale* 40% Source: Metrostudy Analytics

35% 30% 25% 20% 15% 10%

* Built since 2000

5%

marylandbuilders.org

4Q 15

4Q 14

4Q 13

4Q 12

4Q 11

4Q 10

4Q 09

4Q 08

4Q 07

0%

4Q 06

Ben Sage, Director of Metrostudy’s Mid-Atlantic Region, has been researching and analyzing housing markets since 1994. He regularly meets and consults with many of the top homebuilders in the country as well as with lenders, developers, investors, and utilities concerning trends in the local economy and their effect on the real estate market. Ben can be reached at bsage@metrostudy.com or 703-574-8429. For more about Metrostudy, please visit www.metrostudy.com.

BUILD MARYLAND

41

42

BUILD MARYLAND

July/August 16

WELCOME NEW MEMBERS! Blueprint Robotics Capital Railing Carl M. Freeman Companies Chesapeake Plumbing & Heating D.N.F. Incorporated Dunkirk Supply Inc. E.L. Roselle Trim Carpentry Emerald Properties Group LLC Focal Point Productions, Inc. Glenn Construction Hems Site Solutions Huber Fine Homebuilding Kehoe Construction Keller Williams Select Realtors Annapolis KG Builder Solutions M & M Builders and Contractors Magill Generations Olde Port Home Solutions RCG Homes Skelly and Loy Snee, Lutche, Helmlinger + Spielberger, P.A. Spring Valley Builders The Fenton Group Bethesda Too, LLC Celerico Construction Kettler Brothers Homes Provincial Painting RCG Homes Real Estate General Level Landscape Advanced Flooring & Design Design Tops Sears Commercial Sales Power Design Intreegue Design Armstrong Janitorial Cleaning Services RPM Construction Retana Contractors Breeden Mechanical IKO Real Estate CB3 Consulting Services

marylandbuilders.org

BUILD MARYLAND

43

new MEMBER NEW MEMBER SHOWCASE

SHOWCASE

Dan Fulton, Sr. Vice President, John Burns Real Estate Consulting How long have you been with your company and what is your role?

I’ve been with John Burns Real Estate Consulting (JBREC) for nearly three years after 10 years managing my own consulting company, Fulton Research.

I manage our advisory services for the Mid-Atlantic and North East regions of the country.

“I’ve always enjoyed watching projects that I’ve worked on come to market.”

Why did you join MBIA and what do you hope to gain from your membership?

I joined MBIA to become more involved with the local developer and homebuilder industry. MBIA has an outstanding reputation for quality events and membership participation and it’s proven to be true.

Are you involved with any MBIA committees?

It’s early in my membership, but I look forward to my involvement with the Multifamily/Mixed-Use Council, DC Chapter and the Real Estate Finance committee.

What’s a favorite moment in your career so far?

I’ve always enjoyed watching projects that I’ve worked on come to market.

One specifically is Two Rivers, by Classic Communities. I’ve worked with Steve Eckert and his team and watched them persevere on that project since the early 2000s. Now we can see the fruits

44

BUILD MARYLAND

July/August 16

of their labor with a beautiful and successful amenity-rich community.

What was your childhood dream job?

I was set on becoming a school teacher. I guess you can draw similarities between a school teacher and a consultant.

Any business tips can you share with others?

Patience and Prudence. Watch out for red flags and stick to the fundamentals.

An old friend says, “I’d rather pass on 10 good deals than take on one bad deal.”

What is your favorite app or social media outlet?

Google Maps is a lifesaver given the amount I travel.

What is your dream vacation spot?

I love a good island vacation. For me, Hanalei Bay on the north coast of Kauai is an ideal getaway.

If you had a chance to meet any celebrity, who would it be?

Mick Jagger, without a doubt. Although Keith Richards may be more fun.

Guilty Pleasure: What can you not live without?

A big, bold cabernet, fly fishing and Game of Thrones. Not necessarily in that order.

Bill Grothmann, Project Manager, Blueprint Robotics

“I enjoy the excitement of being the 12th employee in a unique start-up company, while appreciating the security of knowing we are bringing a proven technology to the U.S.”

How long have you been with your company and what is your role?

Blueprint Robotics is a new, off-site, wood-framed building component manufacturer that incorporated in 2015. I joined the company in February of this year. I work directly with builders, and am responsible for overall project management of our scope of work, from design coordination through project delivery, as well as business development and sales. Our trade area extends from Virginia to Massachusetts, and my region of responsibility is Maryland, DC, Virginia and Delaware.

What’s a favorite moment in your career so far?

Joining Blueprint has definitely been the highlight. I enjoy the excitement of being the 12th employee in a unique start-up company, while appreciating the security of knowing we are bringing a proven technology to the U.S. with an exceptional capital structure and a proven executive team.

Why did you join MBIA and what do you hope to gain from your membership?

We joined MBIA for the great opportunity to network within the local building industry, and the prospect to become a resource for builders, while educating the industry about our product.

Any business tips can you share with others?

Talk less and listen more, and never burn a bridge.

Are you involved with any MBIA committees?

We just joined in May, so I have not had the chance to get involved with any of the committees yet, but I am interested in learning more about each of them. As our method does not have design limitations and offers a very high level of precision and quality, I believe the Custom Builder committee may a good fit.

What was your childhood dream job?

I thought I wanted to be an architect… or a starting pitcher for the Orioles.

What is your favorite app or social media outlet?

It’s a tie between OrderUp and Uber.

What is your dream vacation spot?

Hawaii has always been on the bucket list for me and my wife If you had a chance to meet any celebrity, who would it be?

I would love the chance to play a round of golf with Bill Murray.

Guilty Pleasure: What can you not live without?

Really cold, cheap beer

marylandbuilders.org

BUILD MARYLAND

45

NEW MEMBERS & REINSTATEMENTS

APRIL/MAY 2016 BUILDERS Bethesda Too, LLC Carole Sherman 5825 Bradly Blvd.

Bethesda, MD 20814 240-602-6118 csherman66@aol.com Carl M. Freeman Companies Jeff Evans 111 Rockville Pike Suite 1100 Rockville, MD 20850 302-344-3673 JEvans@cmfa.com Collins Landscaping Kelly Collins P.O. Box 123 Boyds, MD 20841 301-642-1268 collinslandscaping@verizon.net Emerald Properties Group LLC Luke Yorke-Hart 1501 Sulgrave Ave. Suite 207 Baltimore, MD 21209 443-301-9238 luke@eagroupllc.com Kehoe Construction Brian Kehoe 4220 Dresden St. Kensington, MD 20895 301-440-3406 bwkehoe1@outlook.com Kettler Brothers Homes LLC James Kettler 811 Russell Ave. Gaithersburg, MD 20879 301-948-4000 kettlerjmk@aol.com M & M Builders and Contractors, LLC Ralph Mollet 8009 Brethren Dr. Gaithersburg, MD 20879 301-977-7945 mmbuilders@verizon.net

46

BUILD MARYLAND

July/August 16

Ovida Construction Group Chris Matthews 430 West Old Liberty Rd. Sykesville, MD 21784 443-900-4349 Chrism@ovidaconstruction.com

Big Brothers Marble & Granite Carlos Llivichuzcha 1232 Ridgely St. Baltimore, MD 21230 561-271-5353 Kgf1bigbromg@gmail.com

Southern Maryland Development LLC James Graner P.O. Box 98 Owings, MD 20736 301-855-3589 jwgranerjr@jwgraner.com

Blueprint Robotics Jeffrey Streib 1500 Broening Hwy. Baltimore, MD 21224 443-927-9027 jstreib@blueprint-robotics.com

Spring Valley Builders, LLC Steve Schultze 8849 Tuckerman Ln. Potomac, MD 20854 301-983-3117 steve.schultze@verizon.net

Dunkirk Supply Inc. Mike Brown 10085 Dunkirk Way Dunkirk, MD 20754 301-855-8900 mbrown@dunkirksupply.com

Three Rivers Builders Caroline Ponatoski 42 Hudson St. Annapolis, MD 21401 443-370-7565 caroline@trr.contractors

Harford Mutual Insurance Charmian Hess 200 North Main St. Bel Air, MD 21014 302-668-6576 chess@hm1842.com

REMODELERS Cameron Insulation Kyle Ball 7085 Dorsey Run Rd. Elkridge, MD 21075 443-459-5800 kyle@camerongroupllc.com Fenton Group Ulysses Glee 8115 Fenton St. Suite 400 Silver Spring, MD 20910 301-585-8448 usglee51@gmail.com ASSOCIATES Advanced Flooring & Design Ed Sybert 8432 Kao Circle Manassas, VA 20110 410-381-5400 esybert@advancedfloors.net

KG Builder Solutions Patrick Kilner 20 W. Gude Dr. Suite 200 Rockville, MD 20850 240-232-6860 patrick@kilnergroup.com Level Landscape, LLC Zack Brendel P.O. Box 100 Lisbon, MD 21765 410-489-5206 zack@levellandscape.com Provincial East, Inc. Kylie Winebrenner 736 Dill Rd. Severna Park, MD 21146 410-330-8265 kylie@proconservices.net Skelly and Loy Charles Hegberg 11350 McCormick Rd. Executive Plaza II Suite 706 Hunt Valley, MD 21031 410-527-0418 chegberg@skellyloy.com

AD INDEX Appliance Distributers Unlimited............. 3 Builders Mutual Insurance................... IBC California Closets.................................. 11 Chesapeake Employers Insurance........... 9 Dewberry.............................................. 39 Linowes & Blocher................................ 35 MAPGA................................................. BC Maryland Land Advisors........................ 13 MBIA Membership...........................42-43 McMillan Metro..................................... 23 NAHB............................................... 7 &17 Pepco................................................... 27 Premier Lifts........................................... 5 Residential Warranty............................... 8 Severn Savings Bank............................ 47 Shulman Rogers................................... 35 Vintage Security....................................IFC Wetland Studies.................................... 43

MBIA has a charitable arm, the Home Builders Care Foundation. The mission of HBCF is to give back to homeless and others at-risk by utilizing the skills and resources of building industry members on shelterrelated construction.

More than 20 million dollars of in-kind donations of materials, labor and expertise have been donated to those in need through the HBCF. Their efforts help community non-profits and local governments meet the challenges of caring for our neighbors in need. We leverage our industry’s strengths to save agencies thousands of dollars in the construction process.

As you know, MBIA wants you to use our logo on your company’s marketing materials. Well, you can use the HBCF logo too. There are many opportunities for you to get involved with our foundation and what better way to show your support for our community and those in need than by sharing your expertise and industry resources. Your involvement can be as simple as donating toys to our toy drive or as large as serving as a builder captain for one of our projects. Check out the photos from the Foundation’s Bull and Oyster Roast in this issue of BUILD Maryland. You can find out more about HBCF on our website at marylandbuilders.org.

Expertise + Solutions = Happy Customers At Severn, we close mortgages quickly because we originate, underwrite and service our loans under one roof. Our knowledgeable lending team works with you to develop a draw schedule that meets the timely financial needs of all parties.

A true community bank with a full line of products and programs.

That’s why Severn is the best resource for builders.

• Construction/Rehab Loans • Portfolio/Bridge Loans • Doctor/Professional Program • Fast, In-House Process through Funding

• Super Jumbo Loans - Over $1 Million • Low/No Down Payment Options • First Time Homebuyer Programs • Common Sense Community Bank

Call or visit us today severnbank.com • 410.260.2000

marylandbuilders.org

BUILD MARYLAND

47

STARS CLUB

DGG-MC, Inc. Dewberry Residential Title & Escrow SolarCity Wells Fargo Home Mortgage

Chesapeake Employers Insurance Company K Hovnanian Homes Morris & Ritchie Associates, Inc. Pleasants Development Pulte Saratoga Insurance /CEI Shelter Systems TW Perry Versatex Trimboards

84 Lumber Andersen Windows Elm Street Development Linowes & Blocher McMillan Metro, P.C. Miles & Stockbridge Rodgers Consulting, Inc. Soltesz SunTrust Mortgage

Builders Mutual Insurance Co. Caruso Homes Charles P. Johnson & Associates Geo-Technology Associates, Inc. The Creig Northrop Team of Long & Foster Realtors Gutschick, Little & Weber, P.A. Iacoboni Site Specialists Insurance Associates, Inc.

Lerch, Early & Brewer, Chtd.

Robert A. Tull Plumbing Sandy Spring Bank Shulman Rogers Stantec Consulting Services, Inc. Sterling Mirror & Glass Winchester Homes

Bonded Builders Warranty Group Bozzuto Homes Dico EYA Macris Hendricks & Glascock, PA Michael Harris Homes Miller & Smith Homes Mitchell & Best Group O’Malley, Miles, Nylen & Gilmore Rutter Project Management Wetland Studies & Solutions

BUILDER’S BOOKSHELF

Check out this Top Seller from NAHB BuilderBooks. As an MBIA member you are automatically an NAHB member and are entitled to great discounts on publications, software, brochures and more.

ICC/ASHRAE 700-2015 National Green Building Standard The ICC/ASHR AE 700-2015 National Green Building Standard™ (NGBS) has been approved by the American National Standards Institute for all types of sustainable residential construction. A collaborative effort of the International Code Council, ASHR AE and the National Association of Home Builders, NGBS outlines a variety of green practices that can be incorporated into new homes and multifamily buildings, as well as hotels, dormitories and land developments. The Standard also delivers standalone chapters for both home remodeling and additions and renovations of multifamily buildings. NAHB Member Price: $17.95 or download and electronic version for free.

48

BUILD MARYLAND

July/August 16

AD Giving my crew the tools to work smarter.

Putting people’s safety ahead of profit.

Choosing Builders Mutual insurance.

That’s how I get the job done right.

BuildersMutual.com