Adobe Acrobat Reader
Just Slightly Ahead Of His Time
By George Porter
West Virginia has had regulations concerning manufactured housing
for several years. Some sections of the industry have to be bonded.
There is a recovery fund and strict penalties for those who do
not follow the rules. All of this was requested by the industry
itself in West Virginia. Prior to this, West Virginia was totally
unregulated and the industry suffered tremendously from a lack
of consumer confidence. In the days before this legislation, some
dealers were actually chaining homes to trees to keep them from
sliding down the mountain. This was considered some sort of alternative
anchoring system. Many homes suffered tremendous damage from lack
of proper support and installation procedures.
One customer complained he would lie in his bed at night, during
the winter months, listening to the roof rafters shatter as the
frost in the ground heaved the side of the home and broke them.
When legislation regulating the industry in West Virginia came
to pass, it was without a doubt the best move the industry there
ever made. Sales are way up, and you cannot buy a lemon in West
Virginia. If a home is unsatisfactory due to improper installation,
the installer of that home is held directly responsible for not
only redoing the home no matter what it takes, but repairing any
damage done by his mistakes. If he wishes not to do that, his
bond will be acted upon. If his bond and he are both either used
up or gone, the West Virginia Recovery Fund, which is funded by
all the manufacturers and dealers in the state, will then act
upon the problem. Could you imagine a better protected customer
than those in West Virginia? In the words of Leff Moore, the Executive
Director of the West Virginia Association, all of this was necessary
to protect the industry's most important asset, our customers.
It really doesn't matter where you make the home, or how you make
the home, or who makes the home, and it really doesn't matter
how beautiful your sales lot is, or how affordable your housing
is. If you don't have customers, it all stops right there.
Demand for housing has never been greater. Our only obstacle
is the reluctance of a consumer, because he may not trust the
product. You may think zoning, and all the other government obstacles
sometimes placed in our way are the result of bureaucrats. Please
do not be misled into thinking these people cannot be made to
respond to public pressure. The voter gets what the voter wants.
The opinion of the general public is where it all begins. West
Virginia has gone a long way in solving the problem. The dividends
enjoyed by the industry in West Virginia have proven it was worth
There is a whole new way of thinking in West Virginia. But
I must say, I was somewhat surprised when Jim Smith, Vice President
of a multi-lot operation in West Virginia, called the Home Show
asking me to put on a course specifically for his company. Mr.
Smith was of the opinion more than just installers need to know
about installation. He said he would have all the people from
all of his lots there, as well as all of his sales staff and subcontractors.
All in all there were about 80 people there that day. Mr. Smith
had previously been to a seminar put on by the West Virginia Association
and he understood that where a home goes and how much site preparation
is necessary certainly affects the overall price of the home.
If the salesperson has no idea about what is necessary, or what
it might cost, how can he effectively sell the home to a customer?
Some lots require tremendous amounts of site preparation, some
require none at all. This too can be reflected in the price. Those
people must have a good handle on all the costs involved with
the home, if they are to effectively help the consumer reach a
decision. Mr. Smith also brought his financing people. He said
banks have more money in the house than the consumer. I briefly
pointed out to these bankers installation was key to the survival
of their collateral, and they should strongly consider special
financing for site preparation, or whatever else was needed in
the installation process in order to protect themselves. Most
lending institutions only offer a percentage over invoice. The
more the dealer spends on the installation, the less profit the
dealer makes. In most areas of the country, installation is thought
to be strictly overhead. For that reason, many short cuts have
been taken in the past to the detriment of the bank's collateral,
thereby, reducing the bank's interest in doing it again. This
downward spiral begins with a lack of understanding of how important
the installation of a manufactured home really is. The lender
will finance the extra charges, if any, to properly install and
prepare the site for a manufactured home. The customer is happier,
the dealer is happier because it does not come out of his profit,
and the bank is much safer because every bit of that money is
used for their benefit as well. Mr. Smith knew all this and brought
them to the seminar. He also brought all of his subcontractors.
If the masonry contractor doesn't understand footing sizing in
manufactured housing, he is probably not going to be always able
to produce adequate footings for the home. In short, everybody
involved with the process has to work together for mutual benefit.
Mr. Smith's Home Show dealerships are the first company in the
United States, to my knowledge, that have gone to the trouble
of educating every person in every facet of the business about
what needs to be done and why. He thoroughly understands the sales
department has to care what goes on in the installation and service
department. He thoroughly understands bankers and insurance people
have to know more about this industry they are putting money into.
Larger organizations break down into departments. Through this
action, Jim Smith has clearly demonstrated to everyone in his
company, that each department is not an entity unto itself, but
part of a system to provide customer satisfaction, and they must
work together and understand each other's problems in order to
achieve this goal. Home Show may be just slightly ahead of its
time, but these folks never intended to be just an ordinary dealership.