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NAIL The official magazine of Home Builders Association of Middle Tennessee President Michael Dillon Vice President Trey Lewis Secretary/Treasurer Randall Smith Executive Vice President John Sheley Editor and Designer Jim Argo Staff Connie Nicley Pat Newsome
THE NAIL is published monthly by the Home Builders Association of Middle Tennessee, a non-profit trade association dedicated to promoting the American dream of homeownership to all residents of Middle Tennessee. SUBMISSIONS: THE NAIL welcomes manuscripts and photos related to the Middle Tennessee housing industry for publication. Editor reserves the right to edit due to content and space limitations. POSTMASTER: Please send address changes to: HBAMT, 9007 Overlook Boulevard, Brentwood, TN 37027. Phone: (615) 377-1055.
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FEATURES 7 How to Handle a Complaint by BRANDT MCMILLAN
How to Handle a Complaint Filed with the Tennessee Board for Licensing Contractors.
8 Spring Membership Mixer at Kings’ Chapel
The HBAMT’s Spring Membership Mixer was held last month at the Kings’ Chapel Clubhouse in Arrington, Tenn.
DEPARTMENTS 4 News & Information 11 SPIKE Club Report 12 April Calendar 12 Chapters and Councils
ON THE COVER: April is National New Homes Month. Check out the top reasons that the time to buy is now on page five. April, 2014
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Metro/Nashville Chapter President John Whitaker talks with guest speaker Kristin Eastman from TNMedia prior to the chapter’s March meeting. Eastman delivered a presentation on the various ways you can use social media to your advantage.
New home sales continue to trend flat in February
ales of newly built, single-family homes fell 3.3 percent to a seasonally adjusted annual rate of 440,000 units in February, according to newly released figures from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. “There is no doubt that the persistently bad weather took a toll on sales in February,” said Kevin Kelly, chairman of the National Association of Home Builders (NAHB) and a home builder from Wilmington, Del. “However, builders continued to increase
The first two-month average of 2014 is in line with where 2013 left off - we would be ahead of last year’s pace if not for the unusual weather. 4 The NAIL
their inventory of for-sale homes, indicating they still anticipate a relatively strong spring buying season.” “We still expect 2014 will be a strong year for housing,” said NAHB Chief Economist David Crowe. “The first two-month average of 2014 is exactly in line with where 2013 left off. If not for the unusual weather, we would easily be ahead of last year’s pace. We also continue to see household formations and pent-up demand driving sales forward.” Regionally, new-home sales activity fell 32.4 percent in the weather-battered Northeast, 1.5 percent in the South and 15.9 percent in the West. The Midwest posted a gain of 36.7 percent, stemming from an unusually low January figure. The inventory of new homes rose to 189,000 units in February, a 5.2 month supply at the current sales pace. n
Guest speaker Steve Lavelle from Verizon Wireless outlines beneficial communication tools during the March meeting of the Remodeler’s Council at the HBAMT offices.
Mortgage expert Tonya Esquibel from Summit Funding and tax expert Dr. Friday delivered a presentation about “Diagnosing Your Purchasing Power” during the Sales and Marketing Council’s February meeting. Special thanks to Piedmont Natural gas for sponsoring the meeting.
Housing starts hold steady in February
ationwide housing starts were virtually unchanged in February, inching down 0.2 percent to a seasonally adjusted annual rate of 907,000 units, according to data from the U.S. Department of Housing and Urban Development and U.S. Census Bureau. “Continuing the January trend and in line with our recent surveys, builders are in a holding pattern. Poor weather is keeping many from getting into the field and they continue to face challenges related to a shortage of lots and labor,” said Kevin Kelly, chairman of the NAHB. “While housing construction is in a recent lull due to unusual weather conditions, we expect to see an improvement as the winter weather pattern subsides and builders prepare for the spring selling season,” said NAHB Chief Economist David Crowe. “Competitive mortgage rates, affordable home prices and an improving economy all point to a continuing, gradual strengthening of housing activity through the rest of the year. Moreover, building permits, which are less dependent on weather and are a harbinger of future building activity,
rose above 1 million units in February.” Single-family housing construction rose 0.3 percent in February to a seasonally adjusted annual rate of 583,000 units while multifamily starts edged 2.5 percent lower to a 312,000-unit pace. Regionally, combined housing starts activity was mixed in the month, posting gains of 34.5 percent in the Midwest and 7.3 percent in the South and declines of 37.5 percent in the Northeast and 5.5 percent in the West. Issuance of new building permits rose 7.7 percent to a seasonally adjusted annual rate of 1.02 million units in February. Single-family permits edged down 1.8 percent to 588,000 units and multifamily permits rose 27.6 percent to 407,000 units. Regionally, overall permits rose 6.3 percent in the Northeast, 9.9 percent in the South and 17.9 percent in the West but declined 11.8 percent in the Midwest. Builder confidence treads water Builder confidence in the market for newly-built, single-family homes rose one point to 47 on the most recent National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
Top reasons you shouldn’t wait to buy a new home April is New Homes Month. With that in mind, here are the top reasons you shouldn’t wait to buy a new home. Energy Efficiency. New homes have the latest environmentally-friendly, cost-saving, advanced technology materials and appliances. Safety. New homes are built with the latest materials, have passed inspections and conform to current building codes.
“The March HMI mirrors last month’s sentiment, as builders continued to be affected by poor weather and difficulties in finding lots and labor,” said Kelly, a home builder and developer from Wilmington, Del. “A number of factors are raising builder concerns over meeting demand for the spring buying season,” said Crowe. “These include a shortage of buildable lots and skilled workers, rising materials prices and an extremely low inventory of new homes for sale.” The index’s components were mixed in March. The component gauging current sales conditions rose one point to 52 and the component measuring buyer traffic increased two points to 33. The component gauging sales expectations in the next six months fell one point to 53. The three-month moving averages for regional HMI scores all fell in March. The Northeast dropped three points to 35, the Midwest fell three points to 53, the South posted a four-point decline to 49 and the West registered a two-point drop to 61. Editor’s Note: The NAHB/Wells Fargo Housing Market Index is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public. HMI tables can be found at nahb.org/ hmi. More information on housing statistics is also available at housingeconomics.com. n
fits your budget. Available Loans. Lenders are eager to loan to borrowers with good credit. Great Selection. With many homes to choose from on the market, get the features you want! It’s Your Home. It’s more than a house—it’s a place to raise your family, build a sense of pride, make memories and call your own. n
Move-In Ready. Choose your own flooring, finishes, appliances and colors. Who wants to spend time changing someone else’s tastes? Low Interest Rates. Rates remain at near-record lows; lock in a payment that
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Legislative issues discussed during “hill” visits In response to an NAHB request, the HBAMT met with local representatives one-on-one in more intimate settings in lieu of waiting for the Spring Board meetings. These meetings included audiences with, as shown: at right; Congressman Marsha Blackburn; lower right; Congressman Diane Black; and below; Congressman Jim Cooper. n
NAHB reveals most popular features found in new homes
uring New Homes Month in April, the National Association of Home Builders (NAHB) is sharing with home buyers the most popular features in new single-family homes in 2014. Builders from across the country were surveyed on what features they were most likely to include in a typical single-family home this year, revealing that convenience, livability and energy efficiency are top priorities. “Newly constructed homes can suit the specific requirements of today’s home buyers,” said NAHB Chairman Kevin Kelly. “And now is a great time to consider buying a new home, as consumers can take advantage of competitive home prices and low interest rates to find the perfect new home for their families.” Home builders are including features that are practical and functional for the daily lives of today’s home buyers. The features that are most likely to
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be included in a typical single-family home this year are: a walk-in closet in the master bedroom low-e windows v a laundry room v a great room v v
Energy efficiency is a key theme with Energy-Star rated appliances, programmable thermostats and Energy-Star rated windows at the top of the list. These features help make the home more comfortable and can save the home owner significant money over the long term. On a median per square-foot basis, home owners spent 78 cents per square foot per year on electricity, while owners of new homes spent 65 cents per square foot per year, according to data from the 2009 American Housing Survey (AHS). Builders also list features such as
granite countertops, a double sink and a central island as winning elements in new-home kitchens, and a linen closet and a private toilet in the bathroom. Additional features likely to be included throughout the home include first-floor ceilings at least nine-feet high, a front porch, outdoor lighting and a patio. Home buyers can access home buying and home building information and resources on NAHB’s website at nahb. org/forconsumers. n
Handling a complaint How to Handle a Complaint Filed with the Tennessee Board for Licensing Contractors. BY Brandt McMillan
t’s upsetting when a certified letter arrives from the Tennessee Board for Licensing Contractors informing you that one of your customers has lodged a complaint. It is even more unnerving if you have never been through the process before. Take heart though, unless your situation is extreme, it is unlikely that you are going to lose your Tennessee contractor’s license. In fact, with a good response, it is possible that the complaint will be dismissed without any action taken against you. In 2013, the Tennessee Board for Licensing Contractors (“the Board”) issued formal disciplinary action in 96 cases, and only 2 contractors had their licenses revoked. There were also 6 instances last year where contractors voluntarily surrendered their licenses, and one contractor had his license suspended for a year. In all other disciplinary cases, the contractor was fined in an amount generally between $250 and $5,000; the average fine in 2013 was $2,258.48. However, the largest fine in 2013 was $456,000, which was assessed against the same contractortwice. That contractor was also one of the two whose license was revoked. This six-figure fine was excluded from the calculation to get the $2,258.48 average because it is unusual for such a large fine to be issued. In fact, there were only 4 fines over $5,000 issued in 2013.
The worst reaction you can have to that letter is throw it in a stack of papers to deal with later. You will only have 10 days to respond with an affidavit setting out your position. So, you need to take immediate action and demonstrate to the Board that you are taking the complaint seriously and intend to fully cooperate in the process. If you are going to hire an attorney to represent you before the Board, call them straight away so there will be enough time to put together a thoughtful response. Carefully read each factual allegation that the complainant has made against you. If there are numerous allegations (e.g., that you did not finish the project on schedule; you were rude to the customer; there was one unfixed nail pop in a closet; and you required a 75% deposit) you want to identify those allegations that could possibly result in disciplinary action taken against you. In the above example, you would want to provide simple explanations for the alleged rudeness and nail pop, and focus on the alleged late finish to the project and high deposit amount because the latter two could result in discipline. Any documentation you have showing that the claims are inaccurate will be very valuable, so this is one instance where good record keeping could be a big benefit. Engaging in unlicensed activity is far and away the most common violation for which
contractors are disciplined; it was the reason for Board action in 60% of 2013 cases. The following are the top ten licensure violations that resulted in discipline in 2013: (1) engaging in unlicensed activity; (2) exceeding the monetary limit; (3) incompetency; (4) engaging in misconduct; (5) failing to complete or abandoning a project; (6) supplying false evidence on a license application; (7) fraud; (8) failure to comply with codes; (9) receiving an excessive deposit; and (10) a felony conviction. No matter what the allegations are, you want to put forward the best response you can, because even though statistics show it is unlikely you are going to lose your license as a result of a Board complaint, you do not want to be fined and end up in the “Disciplinary Action Archives” that the Board maintains at http://www.tn.gov/regboards/archive.shtml. If a potential customer or lender searches the internet for your company, the last thing you want them to find is a government report showing that a fine was levied against you in the past. n Brandt McMillan is an attorney with Tune, Entrekin & White, P.C. in Nashville. He represents businesses and individuals on many civil litigation issues, including legal problems affecting Tennessee contractors and home builders. He can be reached at (615) 244-2770, or at email@example.com.
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An early shot of the delectable spread prepared by Chef Brian Cochrane.
Spring Mixer! HBAMT Membership Mixer at Kings’ Chapel fun for all.
he 2014 Spring Membership Mixer was a big hit with association members last month. Held at the Kings’ Chapel Clubhouse, the festive event drew nearly 200 attendees who were treated to great music, delicious food and a variety of tasty drinks available at the open bars. Special thanks to Chazz Williams and his “smooth sax,” Kings’ Chapel Chef Brian Cochrane and the clubhouse staff, Membership Chairman Trey Lewis, the HBAMT membership committee, and Liz Ross for capturing much of the evening in all of the photos shown here. And of course a big, big thanks to all our event sponsors, including: Drees Homes, Ashton Real Estate Group, First Community Mortgage, Kings’ Chapel, Regions Mortgage, Tennessee Title Services, LLC, TNMedia, Trus Joist, and Wells Fargo Mortgage. n
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Seth Douthett, Darin Cunningham, Cecilia Davis, Jared Prichard and Christina Cunningham.
Our host John Powell, Membership Chairman Trey Lewis & Charles Jeter.
HBAMT President Mike Dillon with Jim Ford.
Sam Carbine and Mitzi Spann.
Sandra Prince, Brandon Wise and Denis Rochat.
Mandy Smith and Kasey King.
Jody Derrick and Derenda Sircy.
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Danny and Tonya Esquibel.
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Marabeth Poole and Marty Maitland.
SPIKE REPORT Life Spikes
Sixteen SPIKES (in bold) increased their recruitment numbers last month. What is a SPIKE? SPIKES recruit new members and help the association retain members. Here is the latest SPIKE report as of February 28, 2014. Top 20 Big Spikes Jim Ford 912 Virgil Ray 819 Bill King 776 Mitzi Spann 667 Jim Fischer 566 Terry Cobb 565 John Whitaker 375 James Carbine 331 Jennifer Earnest 321 Dan Stern 306 Bruce Hancock 297 Kevin Hale 286 Tonya Jones 271 Reese Smith III 259 David Crane 237 Steve Moody 219 Sonny Shackelford 216 Michael Apple 185 Cyril Evers 181 Davis Lamb 180
Jackson Downey 174 Tim Ferguson 165 Jim McLean 164 Louise Stark 163 Harry Johnson 146 Steve Cates 140 C.W. Bartlett 138 Trey Lewis 133 Tonya Alexander 126 Steve Hewlett 119 Tom Kelley 115 Sam Carbine 112 James Franks 106 Carmen Butner 105 Johnny Watson 101 Dave McGowan 99 Bill Kottas 97 B.J. Hanson 96 Lee Santiago 95 Kim Dykes 89 Jeff Zeitlin 87 Duane Vanhook 83 Jordan Clark 81 Erin Richardson 76 Randy Parker 75 Jeff Slusher 70 John Baugh 68 Don Bruce 62 Jim Ford, Jr. 62 Wiggs Thompson 62 Hill McAlister 57 Joe Morgan 54 Gerald Bucy 53 John Broderick 52 Beth Sturm 52 David Hughes 48 Al Davis 47
Sheila Rawlings 47 Bernie Laine 46 Greg Langley 46 Benny Sullivan 46 Kim Nichols 45 Andrew Neuman 45 Bryan Edwards 44 Lori Fisk-Conners 44 Kay Russell 44 Peggy Krebs 39 John Ganschow 37 Chuck Clarkson 36 Frank Miller 36 Andy Wyatt 36 Brad Butler 35 David Lippe 35 Al Hacker 34 Ray Edwards 32 Dan Strebel 32 Steve Wheeley 30 Alvin Basel 29 Michael Dillon 26 Matt Burnett 25 Spikes Christina Cunningham 22 Marty Maitland 17 Jess Dillon 16 Don Mahone 16 Tracy Lomax 14 Frank Tyree 11 Pam Smith 10 Don Alexander 8 Derenda Sircy 8
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APRIL Calendar Sunday
Sales & Marketing Council meeting
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Williamson County Chapter meeting
HBAMT Remodelers Council meeting
Dickson County Chapter meeting
Metro/Nashville Chapter meeting
Chapters & Councils CHAPTERS CHEATHAM COUNTY CHAPTER Chapter President - Roy Miles: 615/646-3303 Cheatham County Chapter details are being planned. Next meeting: to be announced. Chapter RSVP Line: 615/377-9651, ext. 310 DICKSON COUNTY CHAPTER Chapter President - Mark Denney: 615/446-2873. The Dickson County Chapter meets on the third Monday of the month, 12:00 p.m. at the Ponderosa Restaurant in Dickson. Next meeting: Monday, April 21 Topic: to be announced. Price: FREE, lunch dutch treat. Chapter RSVP Line: 615/377-9651, ext. 307 MAURY COUNTY CHAPTER Maury County Chapter details are currently being planned. Next meeting: to be announced. Chapter RSVP line: 615-377-9651, ext. 312; for callers outside the 615 area code, 1-800-571-9995, ext. 312 METRO/NASHVILLE CHAPTER Chapter President - John Whitaker: 615/843-3300. The Metro/Nashville Chapter meets on the fourth Monday of the month, 11:30 a.m. at the HBAMT offices. Next meeting: Monday, April 28. Topic: to be announced. Price: Builders Free pending sponsorship; $10 per person with RSVP ($20 w/o RSVP). Chapter RSVP Line: 615/377-9651, ext. 304 ROBERTSON COUNTY CHAPTER
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Next meeting: to be announced. Robertson County RSVP line: 615-377-9651, ext. 313. SUMNER COUNTY CHAPTER The Sumner County Chapter meets on the fourth Tuesday of the month, 11:30 a.m. at the new Hendersonville Library. Next meeting: to be announced. Chapter RSVP Line: 615/377-9651, ext. 306 WILLIAMSON COUNTY CHAPTER Chapter President - BJ Hanson: 615/884-4935. The Williamson County Chapter meets on the third Tuesday of the month, 11:30 a.m. at the HBAMT offices. Next meeting: Tuesday, April 15. Topic: Special guest Mark McMillen, Williamson County Building Codes Director. Price: Builders Free pending sponsorship; $10 per person with RSVP ($20 w/o RSVP). Chapter RSVP Line: 615/377-9651, ext. 305 WILSON COUNTY CHAPTER The Wilson County Chapter meets on the second Thursday of the month, 11:30 a.m. at the Five Oaks Golf & Country Club in Lebanon. Next meeting: to be announced. Chapter RSVP Line: 615/377-9651, ext. 309 COUNCILS CUSTOM BUILDERS COUNCIL The CBC meets on the second Tuesday of the month, 11:30 a.m. at the HBAMT offices. Next meeting: to be announced. Council RSVP Line: 615/377-9651, ext. 311
GREEN BUILDING COUNCIL Council President - Erin Richardson: 615/883-8526. The Green Building Council meets on the fourth Wednesday of the month, 11:00 a.m. Next meeting: to be announced. Topic: to be announced. Price: free for Green Building Council members pending sponsorship; $20 for non-members with RSVP ($25 w/o). Council RSVP Line: 615/377-9651, ext. 308 HBAMT REMODELERS COUNCIL Council President - Jason Broderick. The HBAMT Remodelers Council meets on the third Wednesday of the month, 11:00 a.m. at varying locations. Next meeting: Wednesday, April 16. Location: Henry Tile. Topic: to be announced. Price: free for RMC members with RSVP; $15 for non-members with RSVP ($20 w/o). Council RSVP Line: 615/377-9651, ext. 301 MIDDLE TENN SALES & MARKETING COUNCIL Council President - Trey Lewis. The SMC meets on the first Thursday of the month, 9:00 a.m. at the HBAMT offices. Next meeting: Thursday, April 3. Topic: Special guest Michael Gass, founder of Fuel Lines, which has been rated among the top 100 marketing blogs in the world, according to Ad Ageâ€™s Power 150. Price: SMC members free thanks to our sponsors ($10 w/o RSVP); $20 for non-members with RSVP ($25 w/o). Council RSVP Line: 615/377-9651, ext. 302.
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