Last month in this space, I reviewed a series of market projections for 2014 from Harvard University as well as the industry’s leading associations.
Greg Zimmerman combines aggressive sales techniques with a human touch to sell a whole-house project.
|The enlarged kitchen merges smoothly with the dining area; a spacious island is the only boundary marker. The string of kitchen counters connects with a buffet counter thatÆs handy for family get-togethers.
Greg Zimmerman picks his moments. He tackles some work situations like an ex-Marine sergeant, as client Kay Kennedy puts it admiringly. Other times Zimmerman backs off. WhatÆs interesting is ZimmermanÆs keen sense of when to push and when to give. Kay and Patricia KennedyÆs cottage remodel put that instinct to the test.
Overlooking a marina on Lake Erie, the Port Clinton, Ohio, cottage had been in the family for almost 40 years, says Patricia. The Kennedys live a couple of hours away in North Canton, Ohio, but have countless memories of weekends and holidays spent with children and grandchildren at the one-story, four-bedroom cottage. When the Kennedys decided to give the cottage a bigger, better kitchen, they called Greg Zimmerman at Zimmerman Remodeling and Construction, Inc., Bellevue, Ohio.
Having done a couple of small remodeling jobs for the Kennedys in recent years, Zimmerman already had the KennedysÆ trust and loyalty. Likewise, he had come to know the Kennedys as good people whose word was good. That mutual trust played heavily in the events that followed.
In July 1999 Zimmerman sat down with the Kennedys to discuss the kitchen remodel. The idea was to replace two bedrooms with a large kitchen/family room area. But Zimmerman picked up clues that the Kennedys had bigger dreams. He decided to pursue that hunch. "I asked them, æWhat do you really want to change?Æ" he says. ThatÆs when Patricia admitted she had been thinking about a second story addition containing a master suite plus three additional bedrooms and a bath. ZimmermanÆs up-front sales approach worked. From that point on, he focused on plans and prices for a whole-house remodel, including a new second story. Says Zimmerman, "If I never present [expanded remodeling options, clients will] never know what they could have had."
During price discussions, Zimmerman based his negotiating strategy on two factors. First, as the only bidder he knew he would get the work. But he also felt strongly that the Kennedys had to be comfortable with the price of the job. He chose to compress his gross profit percentage to 27 percent, versus the usual 33 percent. Even so, Kay Kennedy had a home builder friend who reviewed ZimmermanÆs preliminary estimate and declared ZimmermanÆs markup to be two percentage points too high. "We werenÆt out of line with anyone [who does professional remodeling]," says Zimmerman, but to satisfy Kay Kennedy he agreed to split the difference and shave a bit off his markup.
Still, the $388,000 estimate far exceeded the $300,000 ceiling Kennedy had in mind. Zimmerman took a more draconian approach at this point in order to close the sale. "I said, æIf I get the price under $300,000 will you sign the contract?Æ" Zimmerman recalls. When Kennedy agreed, Zimmerman went through and eliminated options to cut costs. Out came the custom cabinets and high-end appliances. Gone was the new front deck. Gone was the zoned heating system. Vinyl siding replaced cedar. Roofing shingles went down a notch in quality. And so on. The estimate shrank to $292,000 - and Zimmerman conveyed an unspoken message that the remodel would be hurt by such a big price cut. Kennedy added back what he was unwilling to sacrifice, and agreed to sign on for a $369,000 remodel.
|The Kennedys wanted to keep the Cape-Cod look of their cottage (right), but add more space. Zimmerman appropriated the two front bedrooms to gain space for a large kitchen/family room area. The new second story houses a master bedroom (below), a sitting area and master bath plus three more bedrooms and a bath, a study and a laundry area.
JUST SAY NO: The next hurdle involved the out-of-town bank that was preparing the KennedysÆ $250,000 home improvement loan. This situation could have been sticky, since the loan officer was one of the KennedysÆ sons. "He wanted my company financials," says Zimmerman. "I refused to give them to him." Zimmerman welcomed the bank to check his credit and references, but held his ground on the company financials. "I wasnÆt borrowing the money," he says. He felt confident that his position on the issue was fair and reasonable. After about 10 days of back and forth phone calls, the bank agreed to approve the KennedysÆ loan on ZimmermanÆs terms.
Even with loan approval, the project faced a potentially serious obstacle. The remodeling permit would be denied if the house sat too low in its 100-year flood plain. The county rule is that remodels on flood plain sites can proceed only if they do not exceed 40 percent of the property value. The Kennedy remodel exceeded 100 percent of the property value, says Zimmerman. He needed a licensed surveyor to resolve this issue pronto.
"There are surveyors in the area who have a couple of monthsÆ backlog," says Zimmerman. He called in his chips with a surveyor whoÆd been awarded a large condo job by the company. The surveyor fit him in, and the report was completed in three days. It certifies that the house sits three-fourths of an inch above the flood plain.
CALL FOR KINDNESS: At last the project was poised to start when, mysteriously, it stalled. The Kennedys stopped calling. Zimmerman could not reach them. He readied the contract and sent it to them by overnight mail. The day they were to receive it, they called Zimmerman with some shocking news. Their son, the banker, had unexpectedly died. This time Zimmerman backed away completely. "My wife and I had a son die," says Zimmerman. "I told them I understood [what they were feeling.]" Zimmerman encouraged the Kennedys to take their time. He added, "I wonÆt call you until you let me know when and if you are ready." He also wrote a heartfelt letter which the Kennedys deeply appreciated. This sensitive, low-pressure approach was best for the Kennedys. Six weeks later, they called Zimmerman to say they wanted to get started.
GEAR-UP GAMBLE: But the contract remained unsigned and Zimmerman faced a production quandary. A spate of rainy weather threatened to put his crews out of work temporarily. At this point the ex-Marine sergeant reappeared. Zimmerman made the decision to start the job without a contract. In mid February he sent his crews to the cottage to do the interior demolition. As a result, the crews stayed on payroll despite the rain. They completed the demolition quickly and at a lower cost than the amount estimated for subcontractors to do the work. The project was ready for framing the minute the contract was signed in April.
|The bathroom is part of a master suite, which runs along the back of the vacation house and captures lake views. The entire second floor was added to create the master suite.
Zimmerman collected two deposits from Kennedy in February - one reserving a place on the production schedule, the other covering custom cabinets and a partial first draw. The income reduced ZimmermanÆs financial exposure during this limbo period.
Originally the Kennedys wanted to complete the cottage remodel by May 2000. Now they said simply, "Get it done when you can." Zimmerman agreed. Then, on the theory that if you donÆt specify a target completion date a job drags on, he promptly gave the project a Sept. 1 deadline. "I told my production manager, Dennis Rospert, to push everyone so we could get in and get out." As with other Zimmerman jobs, Rospert got scheduling buy-in from subcontractors. "They help set the schedule so they help keep it," says Zimmerman. The job flowed efficiently and fast, winding up in late August.
For Patricia Kennedy, ZimmermanÆs choice of subcontractors was a bit of a problem at first. "We had our plumber and electrician," tradesmen the Kennedys had used in Port Clinton over the years, she says. But Zimmerman is a take-charge person and picked the subs he wanted," says Patricia. PatriciaÆs concerns soon evaporated. "It worked out fine," she says. "Greg has good subcontractors." His insistence on using his own preferred subcontractors yielded an excellent project.
In fact, Zimmerman aced the mix of assertiveness and patience on the Kennedy job. He stepped back now and then when appropriate to make the Kennedys feel comfortable. But most of the time he applied clear leadership and authority to get the job done right. "He wants to be in full charge," says Patricia. Kay agrees. "It gets done, and itÆs done the way you want it done."