San Antonio Building Savvy March 2020

ARE YOU DEDUCTING IT?

RAISING THE BAR IN CONTEMPORARY DESIGN

THE PSYCHOLOGY OF THE SALE

San Antonio | March 2020

OSCAR E. FLORES DESIGNER EXTRAORDINAIRE

A Homebuilding Industry Publication

Building Savvy

Building Savvy

Serving new residential home builders in San Antonio and the surrounding area since 1999!

Diamond Plumbing 6055 Woodlake Center San Antonio, TX 78244 OďŹƒce: 210-967-6100 info@dptexas.com www.DPTexas.com License #: MPL-36865

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Building Savvy

Building Savvy

SAVVY’S A-LIST Air Conditioning Classic Services AC 830.358.1499 www.classicairconditioningand heating.com Architectural Photographer Jason Roberts and Associates 210.789.2033 www.jasonroberts.biz Building Materials BMC 512.977.7400 www.buildwithbmc.com Guido Companies 210.344.8321 www.guidoconstruction.com

Custom Stone and Granite Sublime Custom Stone 210.495.1053 www.sublimecustomstone.com

Fireplace Installations Integrity Fireplace Installations 210.294.1383 Garage Doors Hollywood-Crawford 210.494.3434 www.hollywoodcrawford.com

Doors The Front Door Company 210.340.3141 www.thefrontdoorco.com

Home Warranties Centricity 727.385.7599

Electrician MSF Electric 210.781.4112 www.msfelectric.com

StrucSure 210.232.3947 www.strucsure.com

Elevators Home Elevator of Texas 210.340.5702 www.homeelevator.com

Insurance Hotchkiss Insurance 210.581.0420 www.hiallc.com Lighting Turney Lighting 210.308.9966 www.turneylighting.com

S M A RT E R P R O C E S SES

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Painting Texas Quality Drywall and Paint 210.560.2698 www.texasqualitypainting.net Plumbing Diamond Plumbing 210.967.6100 www.dptexas.com Roofer Kendall County Roofing 830.331.2650 www.kendallcountyroofing.com Roofing Supply Beacon Roofing Supply 210.598.5634 www.westendroofing.com Specialty Electronics and Appliances HomeWerks 210.499.5760 www.sanantoniocentralvac.com

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You care about your customer, and so do we.

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DISCLAIMER: Any articles included in this publication and/or opinions ex-

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pressed therein do not necessarily re ect the views of N2 Publishing but remain solely those of the author(s). The paid advertisements contained within the Building Savvy magazine are not endorsed or recommended by N2 Publishing or the publisher. Therefore, neither N2 Publishing nor the publisher may be held liable or responsible

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Lisa Hall

Liz Knight

Regional Sales Manager

Regional Sales Manager

for business practices of these companies. NOTE: When community events take place, photographers may be present to take photos for that event and they may be used in this publication.

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Building Savvy

Building Savvy

[from the publisher] As a member of the home building industry, staying current, relevant and savvy is always a moving target.

Culling through the trends to decide what will be sustainable long term is equally important. As the Einstein quote says, you’ve got to find balance, but you must keep moving. It’s not an easy business we’re in! Â

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This month’s Sales Savvy article by Paul Evans makes an important point about predicting carrying costs and pricing that into your asking price. But we’ve all seen the ill effects of what can happen when a builder miscalculates and keeps a house in his or her inventory far longer than anticipated — possibly due to being too late in updating the style, and occasionally being too early or off the mark in what the local marketplace is ready to embrace. As you read our annual Curb Appeal focus section, it is important to consider the style trends and weigh their long-term appeal and our market’s own unique style preferences as you work with your designer or architect to keep your home styles and material choices fresh and exciting. Â

TO KEEP YOUR BALANCE, YOU MUST KEEP MOVING.�

 � �  ��  ­ € (­ €) ‚­ƒ „……

– Albert Einstein Have you recently been into a home on the resale market and been able to tell by the exterior styling and the interior finishes exactly what decade it was built in?

If remodeling is part of your scope of business, you’ve seen it firsthand — removing yesterday’s glitzy and ornate for the simple, uncluttered, minimalist look. But wait! Have you heard that black is the new gray? Did you know that people are getting tire of safe and neutral, and looking for a little more color in 2020?

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Lastly, and certainly not least, is a remarkable showcase on one the most sought-after residential designers, Oscar Flores. Oscar and his team work with many of the biggest names in town  in the home building business. Take one look at his work, and you’ll see why.

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Building Savvy

Building Savvy

[industry news]

2019 Year in Review As 2019 ends and a new decade begins, we thought it would be interesting to look back on some of the local stories that

By Jim Leonard affected our city and especially city council during the past year.

2019 ended the “Decade of Downtown” coined by then mayor Julian Castro. The goal was to bring more residents and business into the downtown area.

issuing an RFP, and stating they were going to pare down the number of operators and scooters. Ultimately, three companies were awarded contracts to operate in the city.

That goal has been largely effective, with thousands of new apartments built within the city core. The new Frost Bank tower opened in 2019. It is a stunning building. If you have not seen it lit up at night, you should. It was the first significant commercial building built downtown in many years. Other new structures are in the planning stages now.

Mayor Nirenberg and council ended the year at odds with one another. The mayor seems to operate without discussing key issues with council. Several council members have stated publicly that the mayor does not consult or discuss some issues with them.

Currently, the mayor, who sits on the SAWS board, wants to turn over Edwards Aquifer protection to them.

2019 also saw continued growth in single-family housing in the area. Following the housing and mortgage meltdown at the end of the last decade, San Antonio home starts struggled for a few years but finally began breaking out a few years ago. New home starts for 2019 went above 13,000, and the 2020 projection is for somewhere around 15,000 starts. If that were to happen, it would be the third best year in our history nearly matching the 16,000 and 19,000 start pace that happened just prior to the housing bust.

Currently, a one-eighth of a cent sales tax funds purchasing land over the aquifer, and protecting it from development and possible contamination. The mayor wants SAWS to manage that so he can use the sales tax to upgrade VIA. SAWS is pushing back that they do not have the funds to purchase the amount of land that the tax was able to. Council, while they may side with the mayor, is fighting back because they are not being consulted on any decisions. This rancor should go well into the new year and may shape city council meetings for some time.

City Council was involved in numerous challenges throughout the year. The city welcomed Erik Walsh as its new city manager after the abrupt resignation of Sheryl Sculley. Peter Zanoni, who was an assistant under Sculley, left to take the city manager position in Corpus Christi.

Many meetings involved the Alamo and what would take place here to enhance the experience of visitors. One of the more controversial issues was whether or not to relocate the Cenotaph located at the northwest corner of the Alamo grounds. It was finally decided by council to relocate it but not before numerous meetings and concerns by citizens.

The safe and Sick Leave Ordinance was passed in 2018. The city council passed the ordinance to prevent it from going on the ballot later in the year, knowing that the state legislature was taking up the issue and might come up with a state law to address it. In October of 2019, the council made revisions to the ordinance to prevent legal challenges from the business community. But the business coalition challenged the ordinance in court and received a stay. A court date is set for September of 2020, unless the state supreme court takes up the issue as well.

Scooters were a hot topic downtown. At the start of the year, several companies were operating scooters with over 16,000 on the streets and sidewalks. Opponents stated many people were being injured on them, riders were discourteous to pedestrians and that they were being left all over the downtown area, presenting an unsightly appearance. City council decided to get control of them,

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Building Savvy

The Art of the Deal

America Makes Major Gains on International Trade President Donald Trump kickstarted 2020 with two major trade agreements in the month of January: the Senate ratification of the United States-Mexico-Canada Agreement (USMCA) and the phase 1 of a brand-new trade agreement with China, a nation that the United States has never had a formal trade agreement with. No matter who you voted for, these two trade deals are a huge win for the American people. Additionally, they could spell much-needed materials cost relief in the construction and manufacturing industries.

When approaching 2020, it was clear to me that one of the biggest factors for the success of the American economy this year would be

By Trevor Whitney international trade. Texas is especially sensitive to trade, as the Lone Star State ranks number one for all good exported from the United States – to the tune of $138 billion per year to Mexico and Canada alone. That means that a ton of jobs depends on America’s ability to sell goods on the international market.

Over the past two years, the residential construction industry was hardest hit by price increases on raw lumber, most of which the country imports from Canada. By enacting retaliatory tariffs on Canadian lumber, President Trump angered many proponents of free trade. The measures were temporary, he argued, in order to force Canada to the table to renegotiate trade terms between the two long-term allies. While pundits screeched and economists worried, it turns out that Canada was willing to play ball. The USMCA corrects long-term trade imbalances and removes these tariffs. Additionally, labor relations and trade with Mexico saw a major update from NAFTA, which set the stage for North American trade in 1995.

The residential construction industry stands to substantially gain from the passage of USMCA. Materials costs in lumber, which is always one of the largest material expenses in building a home, should equalize during 2020. Additional work permits for Mexican tradesmen to work in the United States should provide seasonal relief to labor shortages. The agreement also creates environmental standards for all three countries, which is a win for many of Trump’s staunchest opponents.

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Building Savvy

In addition to the massive trade agreement here in the Western Hemisphere, President Trump announced the agreement to Phase 1 (of two) trade agreements with the People’s Republic of China, which is the second largest economy in the world behind the United States. When elected, President Trump poked China in the eye with heavy tariffs on steel and aluminum, which impacts every major manufacturing and durable good production in the United States. China had been accused of selling inferior products at below-market prices, a practice known as dumping. Additionally, the United States has had a long-standing complaint that China has manipulated its currency to provide an advantage in international trade, as well as rampant intellectual property theft of American corporate secrets. By striking an agreement with Chinese President Xi Jinping, America forced China to answer to these allegations in order to avoid a devastating new round of tariffs.

While economists largely warned that tariffs would be paid by the end consumer in the United States, the truth emerged that the tariffs did irreparable damage to the Chinese economy, which has a voracious appetite for double digit GDP growth and needs it to maintain domestic tranquility.

While the Chinese economy suffered in silence, Chinese negotiators become more willing to address the major disputes. In addition to agreements on building materials and importation of manufactured goods, the Chinese also made concessions on the manufacture and export of fentanyl, powerful opiod that has wreaked havoc in America’s industrial heartlands and rural areas. The United States had previously identified China as the primary source of all fentanyl, which is 100 times more powerful than heroin.

The Phase 1 agreements are vast and complex, but they set the stage for Phase 2 agreements that could tackle big issues on a long-term basis. America only wins from this, as we cannot ignore an economy the size of China’s.

These victories are not without critics. It is an election year, after all. Many accuse the Trump administration of not doing enough to demand human rights guarantees for China’s minorities, who suffer under repressive conditions. Environmentalists argue that trade agreements do not take climate change serious enough.

Labor unions questioned the wisdom of bringing in more foreign labor, which depressed wages of native-born Americans. All of these critiques have some merit, but could be addressed with follow-up negotiations.

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The Trump presidency has largely fell flat on many of its promises, but our country’s position in regard to international trade has become much stronger at the beginning of 2020. As the year progresses, look for Phase 2 of the China negotiations to wrap up and a new US/UK trade agreement to be discussed as Britain looks to leave the European Union.

MIKE FASSLER | OWNER | 210-294-1383 INTEGRITYFIREPLACE@GMAIL.COM 11

Building Savvy

Building Savvy

[savvy designer]

Raising the Bar in Contemporary Design Oscar E. Flores Stays in Demand

O

Oscar E. Flores is originally from Piedras Negras, Coahuila, Mexico.

He studied architecture in Monterrey, Mexico and later moved to San Antonio where he opened Oscar E. Flores Design Studio (OFDS) in 2007. OFDS provides their clients with a wide range of residential and commercial design services that range from preproject planning services and conceptual design through to oversight. Many custom builders also choose OFDS to work as their custom home designer.

“Ever since I was young, I always knew I wanted to design homes and buildings. For those perhaps just starting out in my field … I would advise them to be patient starting off. It’s not easy at first to convince your teachers or clients about your vision and designs, especially when your ideas are different. If you are really passionate about design, stick to your gut, and believe in your ideas. Sooner or later people will get it.”

Oscar and his team have grown as they set new design trends, which include international and major metro preferences. Although, Oscar favors modern design styles, he masters all traditional styles as well.

He works with client preferences and allows them to try something traditional, transitional or altogether out-of-the-box.

Although design is the skill set, the focus is on client satisfaction and experience. Oscar delivers on the certainty that clients hire him to bring the highest level of expertise, skill, knowledge and service, all while respecting their time.

In the San Antonio area, according to Oscar, there’s been a significant shift to more contemporary and modern design styles in both residential and commercial building. It was previously very difficult to get most HOA’s to approve contemporary and modern designs, but now, many HOA’s have updated their guidelines and welcome these styles.

“I believe that soon we will see more modern residential designs paired with environmentally friendly, or ‘green,’ building techniques,” he continues. “As people learn more about conservation, minimalism, and as the construction industry evolves with eco-friendly and cost-effective materials … you will see more and more custom, green homes with beautiful design elements.”

Oscar’s clients are first given a questionnaire which helps determine their needs, budget, and design style

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preferences. Next, the lot location is finalized and construction budget is started. If a builder is already selected some of the costs may have already been determined. If needed, a lot walkthrough is scheduled so that Oscar can fully understand the environment and take into consideration views or other natural elements on the client’s lot.

“A few of weeks after receiving the client’s questionnaire and meeting with the client, we will provide a preliminary layout for their review. Then, we will make adjustments until we get everything the client needs. After the layout, we will provide preliminary elevations for their review and again make adjustments as needed.”

After the preliminary layout and elevation are approved, OFDS draws up all the plans for the house until a “checkset” is completed. The “check-set” is sent for review to the client and builder

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(if available). These plans include layout, electrical, roof, elevations and several more plans. Once reviewed and necessary adjustments are made, plans are finalized and readied for construction.

Then, 3D renderings and/or walkthrough videos are also completed.

“My ideal client is someone who knows what they want but are having trouble articulating it. I feel I can solidify their ideas and bring their dream home to life in my designs. I like to see my clients happy when they move in to their new house, and it is just what they expected.”

OFDS has won various Summit awards, American Institute of Building Design (AIBD) awards with different builders locally, and some have even won state and national acclaim. OFDS works with many renown builders in and around the area.

Building Savvy

Building Savvy

[sales savvy]

Oscar has also established several great relationships with other designers, engineers and business partners…

By Paul Evans

Understanding the Pricing Matrix:

“His willingness to collaborate with us, and see us as partners in the process … is very refreshing.” – Shea Pumarejo, Younique Designs

“Oscar is very practical, without losing his creative edge. He’s very responsive and quick to connect the right people together to accomplish his goal or to accommodate his clients. He’s a partner with us as we grow our business.”

– Alfred Hernandez, HMB Engineers

“They have a great team, and they’re very professional. Oscar’s deigns are always very unique, very stunning.”

– Keith Norman, Diamante Homes

Hard Cost + Daily Carrying Cost = True Hard Cost

Builders frequently ask me when the best time is to sell a home. What they are really saying is, “I have a good deal in the works and can close today, but should I wait for a better deal later?”

If your hard cost is $200K and you marked up your cost 20%, if you sell it on the day you finish it for $240K, you would make a cool $40K. Now let’s take the same house with $200K in hard costs and say the house sat in your inventory for 60 days before you sold it. If you still sold it for $240K, you would not make $40K. So, back to the original question: If, on the day of completion, someone offers you $235K for that same house, would you take the deal? If you understand what your true hard cost is, you might think, “I may sit on this unit for 60 days (or more). With $235K in hand today, I can start building another house sooner.”

A

Now what if your hard costs were really $180K and your projected sales price included the cost of holding the house for 60 days to get to your $200K in true hard costs? Then, when you sell the house for $240K on the day of completion, your real gross profit is actually $60K because you added the carrying cost factor into your selling price originally. In this case, when you look at a $235K offer on the day of completion, you know you would make $55K.

Anyone selling a product should predetermine their drop-dead price, so they know where they are when an offer comes in. For example, a builder might say, “This house cost me $200K to build, so I am going to put 20% on it, and my drop-dead is 17%.” But when I ask them what the total cost is, including carrying costs to date, they usually look at me like I’m speaking another language!

“Oscar has a gift of hearing what the client wants, and making it work with what us as designers know would work to accommodate the clients wishes. It’s amazing to work with him and be challenged by him, and in the end produce something stunning that the client totally loves.” – Jaimie Anand, designer

“Oscar definitely pushed the envelope on creativity and thinking outside the box. His designs are sometimes extreme, completely different than anything else …but they work. People love his work. And he’s easy to work with!” – Ashley Penix, Capital Hardwood and Millwork

Savvy builders price a unit with all these factors in mind: hard cost, inventory costs, utility costs, and estimated time on the market.

They take into account market health (what the market will bear in that area and/or time of year or season) to set the opening price for the unit. To take the deal or not becomes an easy answer if you know these costs before you start the project.

For example, let’s say you spent $200K to build a home, which is on the market now, and you are building other homes. Every day that finished house sits, it’s costing you money – insurance, taxes, electricity, and so on – racking up dollars that should be added to the hard cost. So, with all these costs compounding, what is the true cost of this house to date?

That answer should be your drop-dead number.

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Paul Evans is a graduate of Lamar University’s School of Engineering and the national VP of millwork for BMC. His book, Life’s Lost Art, offers practical advice for how to turn satisfied customers into loyal customers by listening and responding to their needs. For more than 10 years, he has been an instructor for the NAHB, University of Housing, and the Home Builders Institute, teaching customer service, negotiating, and sales.

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Building Savvy

Building Savvy

[focus section]

By Beverly Smirnis

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The ornate detailing and steep, pitched rooflines of yesterday’s McMansions are out, and cold, industrial designs are just as passé. Simplicity is the name of the game for the new decade, and standing out to make the sale remains a priority. Today’s narrower lots put designers to the test to balance scale, privacy, and garage placement while maximizing natural light influx.

Houses with warm, inviting farmhouse elements combined with sleek, contemporary details were some of the most saved exterior photos by the Houzz.com community in 2019.

Here’s a look at some up-and-coming exterior design trends:

Taller window heights for maximum daylighting capabilities “invite the outdoors inside.”

Mixed-use materials is the leading trend for 2020 exteriors, says Royal Building Products, explaining, “While brick and stone remain popular, these materials are no longer the main focal point of exteriors. Instead, blend the materials with the rest of the home’s exterior design features to present a dynamic look that isn’t overpowering.”

Thin-frame, slim-profile windows clad in black or with textured outside finishes continue to be prevalent across all leading exterior design styles.

Pivot doors provide a bold and modern design aesthetic that sets them apart from any other entrance door.

Natural wood accents are popular, including corbels, brackets, shutters, doors, columns, and variegated plank siding.

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New Ridgefield panels on Wayne Dalton Designer Steel garage doors feature recessed pinstripes. Black is among the premium color paint finishes offered.

Beautiful garage doors, such as glass in clear to opaque finishes, reclaimed wood, and black finishes, are on-trend.

Customize them with hardware accents.

Painted wood accents, such as cellular PVC or fiber cement with a smooth finish, offer the appearance of attractive, painted cedar siding.

Beverly Smirnis is the co-founder of Building SAVVY magazine and publishes its flagship Dallas/Fort Worth edition. She and her business partner and husband, Steve Smirnis, have served as judges for the International Builders’ Show Best of IBS Awards, the Greater Houston Builders Association PRISM Awards, the Greater Orlando Builders Association Parade of Homes, and the Building Industry Association of Okaloosa-Walton Counties’ Parade of Homes.

Building Savvy

Building Savvy

[savvy special report]

Rent Home Price, College Tuition, and Income in the Past Decade *2019 median household income is based on CPI-adjusted data | Source: Yardi Matrix, PropertyShark, usnews.com, U.S. census | RENTCafé®

This Decade, the American Dream is for Rent

2010

GE

N CHA

Owning a home is considered a wealth accumulation tool for Americans.

As The Meyers Edge recently noted, “While the longer-term benefits of homeownership are well-documented, those considering buying a home will often start with the basics: How much will I pay for my mortgage versus how much will I pay in rent each month?”

$1083

Here are a few other highlights from the RENTCafé® report: Housing costs and college tuition saw significant rises. Over the last decade, the national average rent increased by $390, or 36%, propelled by increasingly valuable land, progressively urbane apartments, and a booming job market. The median home price went up by 31% in the same time frame, while the median household income grew by 27%. Additionally, the price of higher education increased even more than housing costs, shooting up by 39%.

The renter population grew twice as fast as the owner population. Since 2010, the number of renters increased two times faster than the number of homeowners, signaling a considerable shift in the American lifestyle. Texas had the most metro areas in the top 20 where the suburban renter population grew the fastest — Austin, Dallas-Fort Worth, San Antonio, and Houston all made the list.

$1473

$179,900

31%

GE

N CHA

$234,983

$28,452

MEDIAN HOME PRICE

39%

$39,513

PRIVATE COLLEGE TUITION

GE

N CHA

$50,046

27%

$63,362

MEDIAN HOUSEHOLD INCOME

Median Rent Payment vs. Median SF Existing Monthly Mortgage Payment Difference* Source: NAR; Zillow; Freddie Mac ; Wallethub; Meyers Research *Assumes the noted down payment, taxes and insurance

Difference of 20% Down

The nation’s most expensive metros have lost residents in the past decade. California lost the most residents. Florida dominates the top 20 metros in population increase, with six metro areas in the ranking, followed by Texas with four.

$1,000

Renting vs. Buying by the Numbers The Meyers Edge concurs that, in today’s affordability-constrained market, the rental market is for-sale housing’s direct competition.

Meyers Director of Economic Research Ali Wolf notes, however, that in today’s low-rate economy, the monthly payment favors homebuying in certain instances. With incomes rising, home price appreciation slowing, and mortgage rates sub-4.0% for the sixth consecutive month, Wolf wanted to explore how housing payments stack up against the rental market. For this exercise, Meyers considered different down payments using a baseline of 4.0% for the mortgage rate.

$200

The math consistently favors owning when the buyer can contribute a 20% down payment. For reference, the median down payment nationally is 12% for all buyers and 6% for firsttime buyers.

below the median rent. The Los Angeles metro is a clear exception, where the shift in down payments makes owning significantly more expensive than renting.

The math can still favor owning with a 10% down payment. A down payment below 20% almost always comes with an extra cost in the form of private mortgage insurance. Even still, there are many metros where the estimated mortgage cost is

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GE

N CHA

AVERAGE RENT

More high-earning Americans are making the choice to rent.

Nationally, the number of households earning more than $150K per year who rent increased two times faster (+157%) than the number of high-earning homeowner households (+78%) since 2010.

“While the Great Recession may have pushed people to rent out of necessity, the economic expansion that followed, coupled with changing attitudes toward family and homeownership, led to the rise of the renter by choice. The share of renters now makes up 34% of the general population and is the largest it’s been since 1960, when 36% of Americans were tenants. Rentership rates expanded across the board — from young families to seniors, from city cores to suburbs, many Americans have shifted away from homeownership,” says RENTCafé’s recap of its end-of-decade report. Developers have responded to demand with a construction boom unseen since the ‘80s, and apartment buildings themselves have become increasingly sophisticated to accommodate quality-seeking lifestyle renters.

36%

2019

vs.

Difference of 10% Down

Difference of 3.5% Down

$800 $600 $400

0 -$200 -$400 -$600

Los Angeles/OC

Las Vegas

Dallas

Orlando

Phoenix

Charlotte

Houston

Finally, Wolf notes that monthly payment is rarely the end-all. Shoppers will consider, among other things, market conditions, projected appreciation, the ability to use tax deductions, anticipated length of stay, cost and time associated with maintenance, and bang for the buck.

The monthly cost of owning is generally more expensive with a 3.5% down payment. Meyers’ simple calculation illustrates what we already know: Entry-level demand is financially challenged. In some cases, however, the difference between the two payments is equivalent to just one dinner out a month.

The Meyers advisory team urges builders to remain laser-focused on keeping their average selling price down by introducing smaller products at lower prices and, in some cases, being willing to help with closing costs. “In the meantime, let’s hope the ‘Bank of Mom and Dad’ opens its doors to help their down-payment-constrained children,” Wolf concludes.

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Building Savvy

Building Savvy

[designer’s perspective]

The Psychology of the Sale 939 NW 34th, San Antonio,Tx 78228 diamondmasonry1@yahoo.com Julio (210)630-1171 We are proud to be a 2nd generation family owned and operated company started early 1990's.

Find out what a difference that kind of experience and dedication can make. Give us a call!

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by Shea Pumarejo

In todays’ market, it is important to identify your company’s value differentiator.

You know, the thing that sets you apart from the competition. The reason a consumer would choose you over the other guy. Without it, it is impossible to compete on anything other than price, and that’s a losing game. There is always someone else out there who is willing to do it for less.

I

making choices based on logic and rational analysis of data, we all make decisions to purchase based on emotion.

In order to determine what your value differentiator is, you first need to ask yourself what it is you sell. If you answered new homes or renovation, you are missing the boat. Before you ask yourself, “Who is this crazy chick telling me I don’t sell houses?”

Just hear me out for a minute.

Emotions that may drive consumers to purchase one home over another will of course vary depending on the individual, but may include things like how “happy” a house feels with all the natural light coming in the windows. Perhaps the buyer sees themselves in a home designed for organization with a place for everything.

They may be frustrated with their current home because there is limited storage and they dream of an easier, clutter free life. Maybe the consumer is looking to move into a more prestigious neighborhood which they are hoping will make them feel important, as if they have achieved a certain status.

In order to understand consumer purchase behavior, you must first begin to understand human emotion and the influence those emotions have on decision making. According to Forbes magazine, emotions play a role in influencing and sometimes completely determining the outcome of decision making. As anyone who has been in the home building/remodeling industry for more than five minutes can tell you, it’s an emotional process for the consumer! Consumers go through the whole range of emotions at some point during the process.

Regardless of what the driving emotion is, when you begin to evaluate the emotion behind the decision-making process, you can begin to evaluate your companies value differentiator in a different light. We have long been told that to sell something, we need to point out the features and benefits. While it remains true that homebuyers will be looking for certain features, their reason for wanting those features are often connected with the emotions they want to feel.

So why is it important to understand the consumers’ emotions, and what does that have to do with selling houses? The answer is everything! Psychology Today says that “the most important characteristic of emotions is that they push us toward action. In response to emotion, humans are compelled to do something.” Something like make a purchase. Truth is, even though we as consumers may think we are

And they are willing to spend the money necessary to get the things they believe will give them those feelings. Taking this into consideration, you may re-evaluate the thing that sets you apart and the way you speak to potential clients about features and benefits and even reconsider what it is that you sell.

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Building Savvy

Building Savvy

[savvy finance]

Are You DEDUCTING It?

By Steven Bankler, CPA

widening in industries like construction as Baby Boomers retire and new technologies are incorporated. If you’re feeling the pressure in this area, consider this tax deduction as a way to help mitigate the cost of up-skilling your workforce.

Running your own business? Small business deductions can really add up for entrepreneurs. And while many business owners are on top of deductions like meals and entertainment, mileage, and payroll taxes, dozens of other deductions can be overlooked. Don’t forget to log the following expenses for consideration when tax time rolls around:

Side businesses: Do you have a hobby or passion project that has started to earn money? If so, you’ll likely benefit from turning that hobby into a business. The recent tax changes have disallowed the deduction of hobby expenses due to the suspension of miscellaneous itemized deductions. So to take deductions – and to claim losses on a side business that made money for you in the past – you’ll need to turn it into a business entity.

Advertising and promotion: Have you launched a new website? Printed brochures or giveaways like T-shirts or mugs that feature your logo? Placed an ad in the local newspaper? Expenses that are considered advertising and promotion are 100-percent deductible as long as they aren’t tied to lobbying or political causes.

Taxes and licenses: Don’t forget to deduct all the added taxes and licenses that come with running a business. They can include real estate taxes paid on business property, sales taxes, excise taxes, fuel taxes, and any business license or permit needed to carry out your work.

Business insurance: Have you considered the sheer variety of insurance that can be deducted? The IRS allows deductions for insurance that covers fire, storm, theft, accident, and similar losses; credit insurance that covers losses from business bad debts; group hospitalization and medical insurance for employees including long-term care insurance; liability insurance; malpractice insurance; business interruption insurance; and more.

Large business purchases: Any time you purchase equipment, vehicles, furniture, and other business assets, consider how you’ll want to deduct the cost on your taxes. Any purchase under $2,500 can be deducted in the first tax year. More expensive purchases, however, are subject to either a Section 179 deduction or a 100-percent bonus depreciation. New vehicle purchases are subject to additional write-off rules.

Your customer wants a home built for the world of today – and tomorrow.

From toll-road fees to the cost to troubleshoot a business process challenge, there are many other business expenses out there just waiting for you to deduct. In the end, it’s essential to evaluate every expense you have and bring them to the attention of your tax consultant. You might be surprised how those expenses can add up to significant tax savings.

Bank fees and interest: Businesses can deduct bank fees and interest — including annual or monthly service charges, transfer fees, and overdraft fees. Your business may also deduct the merchant and transaction fees associated with using a third-party payment processor like PayPal or Stripe. But since individuals cannot deduct these same fees on personal accounts, be sure to keep your business and personal bank accounts, credit cards, and payment accounts separate.

Steven Bankler has more than 42 years of experience in the accounting industry. Steven’s expertise lies in consulting, planning, tax, and asset protection as well as exit strategy services for closely held businesses. He also provides litigation support (both as a testifying expert witness and a consulting expert), business negotiations and estate planning. Visit www.bankler.com for additional tax strategy tips and to learn more about Steven Bankler, CPA, Ltd.

Training: Any time you pay for classes, seminars, certifications, or reading materials to help increase expertise and skills within a current profession, consider it a potential tax write off. The skills gap is

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TX_San Antonio Building Savvy

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