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Desert View Snapshot

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Company: Desert View Homes

Headquarters: El Paso, Texas

Principals: Randy O’Leary

Employees: 91

Operations: El Paso, Texas; Las Cruces, N. M.; Colorado Springs, Col.

Market segments: Entry-level families

Product: Single-family detached homes

2010 Closings: 503

2010 Revenues: $72,055,785

 

 

Take an HD Video Tour of a Desert View Home

 

 

 

Randy O’Leary’s El Paso, Texas-based Desert View Homes is unusual among builders specializing in entry-level homes for young families. Most builders in that niche place their emphasis on operational efficiency, to keep home prices low, so they are able to turn inventory fast. While Desert View grades high in those areas, its emphasis is clearly on the service side of the business, coddling customers with touches similar to those of builders in luxury country club communities.

This service excellence drove Desert View to the 2011 AVID Award for best customer experience among American home builders with 300 or more closings a year. Desert View achieved an AVID Index score of 269.012. That score is a weighted measure that combines the total home buyer satisfaction score on AVID’s independent surveys of Desert View customers with the “would recommend to a friend” score and the percentage of home buyers actually making positive recommendations. It also helped make Desert View the largest home builder in El Paso.

“Desert View’s service is just outstanding,” says AVID president Paul Cardis. “They stay in constant touch with customers from first contact right through to warranty, holding their hands through what would otherwise be a very stressful process for first-time buyers. The level of service is on par with what we’d see in a five-star hotel. It’s way beyond what we normally see in the starter home market, more like a luxury home client relationship.

“I credit that to Randy O’Leary,” says Cardis. “He’s built the company culture around customer service. He’s been an amazing leader for all the years I’ve known him, so this isn’t something new. He cares deeply about his employees and his customers.”

Why Pamper First-Time Buyers?

Desert View builds in Las Cruces, N.M., as well as El Paso, and now has a fledgling operation in southern Colorado, but the company lives or dies on what happens in El Paso, where the firm closed 421 detached homes in 2010, in a housing market dominated by Hispanic buyers. That means many of Desert View’s customers speak little English, and virtually all are new to buying a home.

“About 76 percent of the market in El Paso and Las Cruces is Hispanic,” says O’Leary, 53, who got his real estate broker’s license at age 18 and has been in the housing industry ever since. “At entry-level, the mortgage qualification process is hugely important, and it’s been a real challenge for us and for the three mortgage lenders we deal with (Rocky Mountain Mortgage, Pioneer Mortgage, and Compass Bank) because the rules seemed to change every day. It’s been a nightmare.”

O’Leary could see how frustrating that was to his buyers, who didn’t understand the turmoil. “These are young people with no experience in the mortgage market. Sometimes, though, if you focus on it, and help people understand what’s going on, you can work through it.”

That helps explain Desert View’s extreme level of customer service for the starter market. “We counsel people,” says O’Leary, “and help them stay cool. If you tell them what to expect, it really does help.”

	Award Skips a Year
	There’s a curious change in the timing of AVID’s award announcements this year, one that means there are really no winners in 2010. This year’s awards are still based on data from 2010, but AVID decided to wait until spring of the following year to announce the winners. “We want to give the builders who win our awards the ability to market their triumph for a full year, beginning with the spring selling season,” says AVID CEO Paul Cardis. “That’s why we put off our announcement of the winners from the fall, when we used to do it, to the spring. We’re now like the Oscars, crowning our winners early in the following year.”

That starts with the sales side, where agents have to deal with the qualification process, and Desert View managed to sell right through the Great Recession. “From the top of the market to the low point, we only dropped about 12 percent, 70 units in that one year,” O’Leary says. “Beyond that, we’ve continued to grow our sales 2 percent to 3 percent a year.”

O’Leary’s Winning Formula

This is the second time in five years Desert View has won an AVID Award. “We wanted to make sure complacency didn’t set in,” says O’Leary, “because customer satisfaction is the most important thing in this business. It doesn’t matter how much you spend on marketing, what matters is word of mouth, your reputation for quality and value.”

Desert View’s top scores in the AVID surveys came in these areas of operations:

1. Home was clean and ready (8.31 points above U.S. housing industry average).
2. Number of orientation problems corrected (+7.60).
3. Perception of orientation items (+6.27).
4. Reasonable cost of upgrades (+5.65).
5. Professional and timely loan approval (+5.19).

O’Leary also places a high value on third-party measurement of customer satisfaction. “Everyone knows that nobody is playing games with the numbers. We look at that data weekly and monthly, and spend most of our time in the areas the surveys show we need to improve,” he says. “That’s how we came up with our ‘community team’ form of organization. We used to push everything down from the top. Now each community is an individual profit center. Sales, construction and warranty are all united in one team at the community level, under a community manager. The teams make their own decisions, based on the AVID scores and the margins they achieve.”

There are no handoffs from sales to construction to warranty. “Everybody is involved from beginning to end,” says O’Leary. “It’s their community.”

Desert View has tight construction processes, featuring 39 inspection points, with some of the inspections done by construction superintendents, some by community managers, and some by an outside third party, Anthes Inspections. “Production has to ‘sell’ the house to them at the first orientation, then they do the follow-up to make sure all items are complete before the customer sees the house at the final orientation,” says O’Leary.

Ten of Desert View’s 14 communities score in the 90 percent range on AVID’s “would recommend to a friend” question, a testament to the effectiveness of this approach. “I think his people work twice as hard just because they’re working for Randy,” says Cardis. “You see it everywhere, from the sales office to the field.”

Bill Lurz has been reporting on every aspect of the home-building industry since 1970. A former editor-in-chief of Canadian Building and senior editor of Professional Builder, Bill is currently editor-in-chief of AvidBuilder.com. He can be reached at bill.lurz@avidbuilder.com.