Most people know how to buy a car – the process gets faster and easier each year. Now imagine if you wanted to build a custom car instead. Could you do it? Do you know how to assemble a team, manage the construction process, set realistic budgets, manage the bidding processes for materials, labor, and loans, minimize contract costs, inspect the work, and make sure you stay within budget and on time? Most people can’t. But for hundreds of thousands of Americans, this is what they ostensibly try to do each year when they decide to build their own custom homes – often resulting in cost overruns, unexpected delays, and poor results. There must be a better way…
THE MANY CHALLENGES WITH CUSTOM HOME BUILDING
Of the roughly 1.5 million new homes built each year in the US, around 20% (or 300K) are custom built homes. In luxury housing markets like Paradise Valley Arizona, the percentages of custom homes built are much higher with many of these homes serving as secondary homes that are bought, built, and owned by out-of-state residents who often have little or no local contacts and experience building in these housing markets.
As the real estate market continues to set record levels in 2021, many of the homes in these highly sought-after locations are becoming dated with land increasingly worth more than the previous structures built on them. And with few remaining “good” lots left to build on, an increasing number of luxury buyers now want to demolish (or scrape) older homes and build new luxury homes in their place. This creates a lot of questions and complexities beyond a traditional real estate transaction – especially if you don’t live in and/or are unfamiliar with a local market. These questions commonly include:
- Who are the best and most trusted real estate agents to work with that can help identify the best locations and lots (both on and off market) to build a new custom home?
- Who are the best and most trusted builders, architects, designers, engineers, and subcontractors to work with in the area based on your needs and desires?
- Who can best manage a competitive bidding process with the resources, once identified, to help keep costs down and stay on time?
- When building on hillside and sloped lots, who can help you better understand any additional costs, building restrictions, and city/town requirements for your new build?
- Who can help you identify and receive the best construction loan rates for your construction?
- Who can create and manage your home building budgets, estimates, and ultimately help make sure your project stays “in the lane” during the build process?
- Who can continuously audit and professionally inspect the results of your build throughout the process, especially while you are traveling or living away?
- Who can handle your home build if things go wrong, processes break down, and contractors unexpectedly walk off the job?
- And most importantly, who can help you do all this while mitigating any potential conflicts of interests based on who is getting paid by whom?
WELCOME TO THE ADVOCATE
I had the opportunity to recently get caught up with Keith Galbut, the founder and President of ADVOCATE, to learn more about his company and how he works to address these needs for buyers in the luxury home market both here in Arizona and across the nation.
Keith created ADVOCATE back in 2016 after he completed his own home construction project that needed this extra layer of service and support. A construction and business lawyer for almost two decades, he knew there was a gap in the residential construction market supporting owners. Since that time, his organization has rapidly grown to more than 7 full-time employees who provide a comprehensive suite of home building management and oversight services based exclusively on advocating for one party: the homeowner. This removes any potential conflicts of interest that are often pervasive, obscured, and esoterically absorbed in the home building process – frequently at the expense of the homeowner.
By removing themselves from any obligation other than to the homeowner, the ADVOCATE can more effectively help direct and negotiate loan rates, contracts, bids, and quality controls on behalf of the homeowner with the goal of producing the best custom homes in the quickest possible timeframes and at the lowest possible costs –saving new homeowners far more than the cost of using their services. How many other services can provide you with that kind of result?
It is often said that the best companies are the ones that do more for less and that is a key selling point for the ADVOCATE. Keith and his team of industry experts not only optimize and manage the luxury home building process for their clients but also take this unique industry knowledge to new levels in the today’s world of Artificial Intelligence (AI). One of the advantages of working with ADVOCATE is their technology that allows them to track, analyze, and process bids based on current market conditions and pricing. This helps to take the mystery out of budgeting, pricing, and bidding on projects during a build resulting in greater knowledge, leverage, decision making, and results for the homeowner. And as ADVOCATE continues to grow and potentially expand into additional markets, this knowledge alone will continue to grow as they take on more local custom home building projects.
PRODUCING REAL & QUANTIFIABLE RESULTS FOR HOMEOWNERS
According to Keith, the value ADVOCATE provides to clients has been measurable in nearly every aspect of the build process. For example, their competitive bidding processes have resulted in an average 10-20 to 1 in savings for their clients. With respect to the competitive bidding for construction loans, they have commonly saved clients from .125 – .375 in loan interest rates often saving 100’s of thousands of dollars in total payments. Overall, ADVOCATE has saved hundreds of thousands of dollars for many of their clients making them an invaluable and essential element to custom homebuilding moving forward. One might think that all these savings might be viewed unfavorably by some contractors until they realize that contractors and architects, are the ones providing the largest number of new client referrals to ADVOCATE. Or as Keith explains; “If the contractor is really interested in representing the best interest of the owner, then they will view us as an asset to a project and not a threat.”
Some people might read this and wonder what ADVOCATE provides that they don’t already receive by hiring a General Contractor for their custom home build. General Contractors traditionally coordinate the subcontractors and make sure the project is carried out as planned and designed. But not all general contractors are the same and more important, not every general contractor is right for every project.
As Keith explained to me, many people also make a mistake by incorrectly selecting their team to help build their custom home and often in the wrong order. The team Keith is referring to typically includes an architect, interior designer, landscape designer, engineers, and the general contractor, usually in that order. But when people start by first choosing a general contractor, they lose their competitive advantage and leverage to bid on the project to ensure market pricing and to select the best general contractor and other consultants at the best price. ADVOCATE leads this selection process by vetting contractors through additional criteria such as their skills and experience, how busy they currently are, how they can staff their project, and their personality in working with the owner. This is why Keith advises potential clients to engage with their service as early as possible in the design and build process so they can help make sure everything is properly structured from the very beginning – ideally before the design and engineering team is selected.
HOW TO GET STARTED
If ADVOCATE is a service you might consider for your next home build, Advocate typically offers prospective new clients a free 1.5-hour introductory meeting to discuss your needs and project in more detail. If you decide to use ADVOCATE for your project, you will then be billed monthly based on the phase/s of the project you want help with.
Of all the services ADVOCATE currently provides, the most popular are their competitive bidding and team selection services – as part of their entire construction management suite of services. But it doesn’t stop there. ADVOCATE also provides additional services such as project turn-around services when projects go bad, “spec” home builder services helping “spec” developers with strategy, pricing, and construction management, and inspection services which are currently coordinated by their own master inspector on staff. And if you are building while living out-of-state, these inspection services can also include video updates, drone flyovers of construction sites, and regular check-in’s which can help provide you with piece of mind by making sure you have somebody consistently look out for your project.
Keith’s new company is rapidly growing and currently operates in multiple states. I have to imagine that as word continues to get out about this new and exciting service, a growing number of the 300K custom homeowners building each year will want them involved in their projects. And why not? Building custom luxury homes is often one of the largest financial commitments people will ever make so why trust this process to luck? You wouldn’t build a car that way so why take a much larger financial risk on your home?
Now you don’t have to.
Learn more about ADVOCATE at: https://advocate-rca.com/
Dustin W. Ruge
HOW WE CAN HELP YOU…
The Goldman Ruge Luxury Group provides luxury property owners, buyers, and sellers in Arizona with the highest level of service and support when dealing with one of the largest personal financial decisions our clients will make in Arizona. Our clients depend on us as their trusted advisors for all aspects associated with their luxury properties both including and beyond the home buying and selling processes by helping them protect and maximizing the asset value of their luxury properties. We primarily focus on luxury property sales in the Paradise Valley, Arcadia, Scottsdale, and Phoenix areas.
LET US HELP YOU…