Midwestern Miracle

South Bend, Ind., isn't exactly a hotbed of real estate activity. The area's growth is essentially flat, and a recent economic outlook from Indiana University's School of Business and Economics called the forecast for 2007 “less promising than recent years.”

Yet South Bend builder Weiss Homes had its best year ever in 2006, vice president of sales Kym Baker says. To help buyers who were skittish about purchasing a new home, Baker armed sales consultants with data on the local housing market and solid reasons why customers should buy now.

“We're the experts,” she says. “We have to help them think it through.”

SOLID VALUE: The Truman, shown here, is one of the best-selling plans at Weiss Homes' Lafayette Falls community.

One of its best-selling communities—and the fastest-growing new neighborhood in the city—is Lafayette Falls. It averages about a sale a week, split fairly evenly between its maintenance-free villas and its larger single-family homes. That's about double the average sales volume for new-home communities in the market, Baker says. Besides a favorable location and appropriate pricing, the success of the community comes from a combination of innovative marketing and design strategies.

Weiss Homes has cultivated an unlikely, but powerful, ally—the local real estate agent community. Any agent who registers a client at Lafayette Falls will be paid the standard agent's commission instead of being cut out of the deal by the builder's sales consultant if the buyer later shows up without his agent. That common practice often makes real estate agents extremely reluctant to take their clients to look at new-construction homes.

“If I have someone who is even thinking about building, I can register them with Weiss and if they build, I know I'll get compensated,” says South Bend Realtor Rodger Pendl. “They make it real simple. By simply faxing a [customer's] name, I have the security that this is a builder [I want to] recommend.”

Realtor Joan Allen says it's also important to her that the buyer's base price is the same whether an agent is involved or not. Otherwise, the buyer would be tempted to work without her to get a lower price on the house.

“I don't need to fear that they'll try to cut me out,” Allen says. “Even if I bring someone in just once and the buyer comes back without me, they honor that. You have a really good trust level from the start.”

The policy on commissions, which Baker says she considers a marketing expense, has paid off. About 25 percent of their sales come via agents.

“Realtors are a tight-knit group, and they network a lot,” Baker says. “If you do one of them wrong, they're all going to know. And on the flip side, they'll remember you as well.”

While the commission obviously is important, Baker notes that their research found that what the Realtors really wanted from builders was respect for themselves and for their clients.

“Little things mean a lot—returning phone calls promptly, having refreshments in the models, having real-time pricing,” she says. “We never have to get back to people later with pricing.”

When Weiss Homes brings in speakers for staff training, Realtors are invited to attend free of charge. The Realtors can use the sessions for continuing education credits. Plus, Baker and her staff solicit their opinions on everything from floor plans and pricing to customer service.

“We visit as often as they'll let us in [their offices],” Baker says. “It's our own little focus group. ... It's a working relationship instead of an adversarial one.”

DESIGNED FOR CONVENIENCE: The Truman floor plan highlights some of the features that differentiate Weiss Homes. The first floor includes a drop zone by the garage with a charging station for electronics; the second floor offers a laundry room with a door to the oversized master suite closet. Every plan is regularly reviewed and revised, using feedback from customers and real estate agents.

Another strong marketing program is a referral program for new buyers and current residents. The person who is referred receives $1,000 in options for their new home. The person making the referral gets $1,000 for landscaping or for furniture from Weiss Homes' 15,000-square-foot design center. There's no limit on how many buyers one person can refer.

“They refer 10 friends, they get $10,000,” Baker says. “If they choose landscaping, it just beautifies our neighborhood even more.”

Of course, marketing truly shines when there's a great story to tell. Such a story will unfold later this year when Lafayette Falls opens its next phase, which will introduce traditional neighborhood design (TND) to the market. The TND model is a great fit for Weiss Homes president David Weiss' love of Florida-style homes that orient to the street and incorporate outdoor living.

The concept is quite unusual for the Midwest with its often-fierce winters. But by facing the outdoor living area south and sheltering it with two or three walls, “you can use it a good two-and-a-half to three seasons a year,” Weiss says. He's the only builder in the area to offer indoor/outdoor fireplaces, and one plan has a courtyard with a grilling area, hot tub, and fire pit.

The builder has a policy of replacing about 25 percent of its plans every year to keep everything new, says Weiss, who designs all the company's floor plans based on feedback from customers and Realtors. Only about 10 percent of the plans are kept long-term.

That feedback has led to a host of small, but important features that help Weiss Homes stand out in the market. Features include laundry rooms near the master bedroom and back-door drop zones with counter space and extra outlets for charging cell phones, iPods, and other electronic gear. High-speed phone and cable wiring for home networks come standard in all models, as do granite countertops on all the bathroom vanities.

STYLE POINTS: Four elevations, Arts and Crafts, French eclectic, traditional colonial, and folk Victorian, have recently been introduced to the product line at Lafayette Falls. Vice president of sales Kym Baker says that on every new design, the staff asks whether a teacher, a firefighter, or a police officer could afford the home, since “that is the everyman house. If it is affordable to that marketplace, we've hit most people.”Figure

Weiss has also revamped all of his elevations, based on research that customers were willing to pay an extra $3 per square foot for exterior detailing. The builder now offers a choice of traditional colonial, Arts and Crafts, folk Victorian, and French eclectic elevations. All exteriors feature vinyl siding and stone, and Weiss says that's one of its biggest selling points.

“It's maintenance-free,” he notes. “You won't have anyone with peeling garage doors or paint. Five years from now when people are driving through, they'll see how nice the homes look. ... Now with the vinyl siding colors coming in darker and brighter colors, it gives us the opportunity to be more creative.”

The extra touches are critical, he says, because his biggest competition is the house his customer already lives in.

“We have to give people a reason to move,” he says.

He's now concentrating on carving out space for a larger master closet. One of his new plans, a three-bedroom, 1,600-square-foot house, features an optional island in the closet.

“I'm probably reducing our bedrooms a little bit to get that extra space, but I'm seeing the market head that direction,” Weiss says. “My wife and I each have a walk-in closet. We don't keep any of our clothes in the bedroom itself. I see that going pretty big.”

• Community: Lafayette Falls
• Product: Villas from 1,200 to 1,800 square feet; single-family detached from 1,300 to 2,400 square feet
• Builder:Weiss Homes, South Bend
• Developer:Kendall Weiss, South Bend
• Residential designer:In-house, David Weiss, South Bend
• Total acreage: 240
• Total units at build-out: 650
• Price range: Villas, $150,000s to $250,000s; single-family, $150,000 to $290,000s
• Date opened for sale:December 2004
• Sales to date: Villas, 45; single-family homes, 50