“Delivery date,” a term that becomes as familiar to new-home buyers as the word “mortgage,” is an out-and-out chameleon.
To the buyer, delivery date means that long-anticipated, glorious day that the mover’s truck pulls up and unloads all the new owner’s earthly possessions.
To the builder, delivery date means “This is our estimate, folks, we’ll do our best. If everything goes the way we want it to, if every day between now and then has perfect building weather, if all our bricks and lumber and carpenters and earth movers show up when they’re expected and in the right quantities, if there’s no zoning glitch and our permits are OKd, we sure hope your home will be finished on or around that date.”
Delivery date can change from something that’s music to the ears of new-home buyers to a synonym for traumatic, exasperating, odious.
It’s story time.
Janice Kolling and Steven Leimer contracted with Palatine-based Concord Homes in April 1998 to buy a concrete loft unit in Sexton Lofts, 360 W. Illinois St., Chicago, then undergoing conversion from a warehouse. Concord promised August 1999 delivery for timber lofts and spring/summer 2000 delivery for town homes. Buyers of concrete lofts, like Kolling’s and Leimer’s, were told January 2000.
The developer came through on delivering both the timber lofts and town homes, said Kolling. But not on theirs. “Toward the end of January, since we still had not heard anything one way or the other with either a `move-in date’ or revised delivery date, we contacted Concord Homes and were told delivery was now expected April 2000,” she said.
In March, delivery was revised to June, but in April Concord said the date would be Aug. 22. On June 7, the revised delivery date jumped ahead to Sept. 5.
After being told that the delay was related to an insufficient steel supply and then a shortage of bricks, among other things, the final delivery/closing date given was Sept. 6.
In the meantime, “Your whole life is on hold and costing thousands of dollars in re-mortgaging fees, extended leases and other compensations,” said Kolling, adding that at one point, after their rental lease was up, for two months they paid their own rent as well as that of the tenant who was slated to move into their apartment.
Kolling and Leimer finally moved into their loft in early September, 9 months after they’d expected to. And, “Someday,” she said, “when it’s finished and all the problems are fixed, it’s going to be just beautiful.”
Looking back, Kolling said, “Even though we were despondent at times and in debt, we’re glad we waited.”
What she regrets most is what she said was Concord’s lack of communication when construction fell behind schedule way back in November of ’98, “especially because we’d done our homework, investigated a lot of builders and Concord’s reputation was terrific.”
So go myriad stories of delayed move-ins, of buyers describing themselves as “homeless,” living with friends or parents, practically camping out while waiting for their lofts, their apartment-to-condo conversions, their houses or townhouses — even their custom-built homes–after they’ve sold their previous homes or terminated their leases.
There’s no denying that the problem of failing to meet promised move-in dates is nationwide and has become horrific–both for buyers and home builders. But, there’s also no denying that delivery dates given early in the process are to be taken skeptically, as per the old grain-of-salt cliche.
There are too many variables for builders to target months or years in advance when buyers can actually move in.
Roger Mankedick, executive vice president of marketing and sales for Concord Homes, developer of Sexton Lofts, acknowledges responsibility for the snafus that plagued Kolling and Leimer and others who contracted for concrete lofts in the warehouse conversion.
“Have there been delays? Absolutely,” he said. “Anything is possible when you’re building.
“We purchased the building four years ago and started selling about three years ago,” he said.
Along the way, the developer decided “to build five stories on top of the original building and also ring it with town homes. In retrospect,” he added, “that became very complicated, to build on top of a warehouse.”
Then, those “anything is possible” problems started: A subcontractor walked off the job after some disagreements, the order for matching bricks was inaccurate and the steel structure atop the warehouse caused more grief than anyone had anticipated.
“We’ve lost time, blown time on mistakes, on the unexpected,” said Mankedick.
“It’s a long road between the purchase, when delivery is projected,” he cautioned, “and the firm date, which is approximately 10 to 12 weeks prior to move-in.”
He said that of the 800 to 900 homes Concord builds yearly, “less than a half-dozen are delivered later than the firm date.”
“What used to be three- to five-week delays are now three- to five-month delays,” said Nick Helmer, chairman of IGL Real Estate of Oak Brook. “I’ve had moving trucks pull up to our buildings and we can’t let the people move in. How do you solve a boom in your business?”
Explosive building has broken sales records in recent years. The phenomenon may be one of the few facts agreed upon by economists, builders, suppliers, real estate agents and even home buyers.
While builders are often smiling at their plethora of orders, many are also struggling to find skilled craftsmen and low-supply materials or they might be swearing at subcontractors who haphazardly slap on the drywall or show up with three carpenters instead of the 14 they’d promised.Meanwhile, those builders are probably also scouting for some empty scraps of land or vintage warehouses where they can start even more developments.
“It’s a good problem to have,” said Carol Smith, author of “Building Your Home: An Insider’s Guide” and other consumer-oriented books. She sees it as “a result of a good economy” that’s made it possible for more people than ever to own their own homes.
“The builders can’t deliver product fast enough,” said Steve Hovany of Schaumburg-based Strategy Planning Associates, which monitors some 220 housing projects weekly for the Home Builders Association of Greater Chicago.
“Even custom builders are over-committed. In this area, you sell a home before you dig. Then the builders put in their orders and they might get hung up on the zoning stuff, the permits, all the imponderables.”Buyers are seldom aware of such peripheral circumstances and if they are, they figure those are the builder’s problems, not theirs. Even sophisticates don’t always realize such blips and mistakes can have an impact on their own homes.
In its August issue, Professional Builder magazine’s 2000 consumer survey showed that nationally the net number of days after the agreed-upon closing date for actual move-in was 63.
At the time the contract was signed, according to the survey, 45.9 percent of buyers did not receive a closing date from the builder. Of the 54.1 percent who did, 65.6 percent were able to close on time and 34.4 percent did not.
Sometimes, the delivery date stories become he-said-she-said documentaries, with both sides keeping records but, in some cases, counting months with differing starting dates.
Jane and John Doe–she’s 76, he’s 80–have a “tragic and traumatic” story to tell, though late in their saga they declined to allow us to use their real names.
It’s about their buying a home in a western suburb, selling their home in Michigan, packing up their belongings and then moving into a motel in St. Charles on the day they’d expected to move into their brand new town home.
Though edited for brevity, these are Jane Doe’s words, via e-mail and excerpted from copies of signed letters including those sent to the St. Charles mayor, the St. Charles Republican and the Better Business Bureau of Greater Chicago:
On Dec. 4, 1998, the Does signed a purchase agreement and deposited $3,000 with a builder for a town home in St. Charles with “delivery,” referring to move-in date, in June 1999.
In February of ’99, they made a second deposit of $3,000 and in April 1999 asked for a firm occupancy date and were told the third week in July. They called the builder again in April and were told they could move into their town home between Aug. 3 and 12.
In the meantime, however, the Does had been busy. After they were told, during their first call to their builder in April, that they could move in “the third week in July,” they sold their home (with a July 16, 1999, closing) and arranged for movers to deliver their furnishings on July 21, she wrote in her e-mail, noting that was “the last day of the third week” in July.
Then, the Does made that second call in April, after they sold their home, and learned of the revised August delivery date.
They put their furniture in storage at a cost of $2,000 and moved into a St. Charles motel on July 22, for three weeks at $70 a night, they said. They took possession of their town home on Aug. 11.
Along the way, on Aug. 1, 1999, the Does had been summoned to the builder’s corporate offices where they met with three of the firm’s representatives.
“They were nasty, they didn’t care about us, they made an offer,” said Jane Doe by phone last week. The offer, she wrote: “We will give you your $6,000 back, plus $1,000 for your trouble and you go someplace else. We can sell your town home very easily.”
“After a wait of 8 months, furniture in storage, living in a motel with all the anxiety, discomfort and financial expense and we should go `someplace else.’ Where?” she asked in her e-mail.
Last week, by phone and e-mail, Mrs. Doe, in essence, said forget it.
“Everything has been resolved. We’re very happy here. Nobody knows about this and we don’t want our neighbors to know.” She requested that they not be identified.
This is the builder’s story.
James Hughes, a partner at Wiseman-Hughes Enterprises, is reading from the Doe’s documented files at the builder’s corporate offices in west suburban Wheaton.
The Does signed a contract on Dec. 4, 1998, to buy a town home at Renaux Manor in St. Charles with a projected delivery date of July, 1999. He makes clear that the date is “projected,” as most builders do.
In April, 1999, Wiseman-Hughes gave the Does a firm date of July 21 or 22, then later in April, the date was revised to Aug. 3 to 11.
Hughes’ records of dates agree with those of the Does but diverge on the Aug. 1 meeting’s content and outcome.
“Knowing their frustration, we offered to return their earnest money if they preferred to move elsewhere,” said Hughes. Additionally, the builder issued a $2,000 credit at closing toward their temporary furniture storage.
The Does moved into their new home on Aug. 11, “meaning we missed the original projected delivery date by 11 days,” said Hughes. “Candidly, within our industry, with all kinds of possible weather delays, that’s a pretty good delivery date. Actually, it’s phenomenal.”
According to consumer writer Carol Smith, it’s pretty remarkable that Wiseman-Hughes could deliver a home on Aug. 11, 1999, that in December of 1998 was given an estimated delivery date of July, 1999.
“They’re totally unpredictable,” she said of promised delivery dates. “If your builder is starting with a piece of ground and you’re planning to live in the house that will go on that piece of ground and you are given a move-in date, just ignore it. “He is going to deliver that house on any day in the universe but that particular day.”
It’s almost impossible, she indicates, to come up with a specific date in an industry with so many possibilities for delays.
Smith claims she doesn’t favor either side in these problem areas because “I have a foot in each camp–I’m a homeowner and I speak at builders’ seminars and meetings.” But she does have “a lot of sympathy” for consumers because they don’t realize and understand the industry’s multitude of vagaries.
She advises builders not to commit to a delivery date until preferably 30 or 45 days before move-in is likely. And she says consumers, no matter what they’re promised, should really only consider a date to be firm when the builder says, “It’s 30 days from now.”
William Young, director of consumer affairs for the National Association of Home Builders, said consumers, above all, should understand a few basics about the home-building process.
Foremost, “The first date given is always the estimated delivery date,” Young stressed. “That’s due to many factors, especially weather, labor and materials. Then there are the problems the builders cause and the problems the buyers cause.
“Construction is sequential. First the foundation, then the framing and down the line. Anything that throws the sequence off, whether a shortage of skilled labor or poor scheduling, can affect the progress of the house,” said Young.
On the buyers’ side, being indecisive or blowing off deadlines for decisions relating to cabinets, carpeting, standards and options can cause delays. Changing those decisions when construction is progressing can be akin to disaster, especially if it involves an out-of-stock or crucial replacement item.
Even when move-ins have only minor delays or bumps, there’s still the unfinished business that plagues many new owners.
Probably few of the many loft conversions that have been undertaken in recent years have gone off without a hitch of some type.
Helmer of IGL said he also ran into trouble, delays and headaches–as did Concord–when he decided to top off his warehouse project, Landmark Lofts, 2024 S. Wabash Ave., in Chicago, with four additional floors.
The results, according to one of the loft owners, Tony Cardone, included move-ins several weeks late, but more significantly, unfilled promises and unfinished lofts.
He said, via e-mail, that he and more than 70 other Landmark loft owners have complained of, among other things, crooked and unpainted sprinkler pipes, incomplete electrical work and “code violations” that could cause damage.
Helmer says his company is aware of and working on the problems, which “are not life-threatening.”
IGL, Concord and Wiseman-Hughes are hardly alone in late delivery dates. Even an expensive custom home constructed under close supervision by a management firm can run into snags.
Richard Harty of John G. Harty Construction Management and Contracting in Highland Park says its electrical contractor was ready to work on schedule, but work fell behind three weeks because the owner’s designer couldn’t decide where to place some outlets.
Author Carol Smith said a lot of problems can be averted if buyers don’t make any very specific moving plans until they are given a 30-day firm notice.
She also said, until dates become firmed up, buyers should not sell their current home “unless they plan to move twice,” meaning from their home into temporary quarters and finally into the new home.
“Most of all,” she stressed: “The builder wants to deliver that home more than the buyers realize. They don’t get their money until that house is yours.”
