Show time: a show home can put your company in the spotlight

Custom Home, July-August, 2002 by Gerry Donohue

Every custom builder has heard the stories. A builder signs up to build a show home with a magazine or a charity. He quickly finds that the architect hasn't a clue about market realities, that the magazine requires that all of its advertisers' products go in the house, and that he gets carried away by his own excess. The house keeps getting bigger while the budget and schedule won't budge. And then the house doesn't sell--even a loss.

Given this scenario, why would any custom builder sign up to build one of these homes? And then sign up for a second? Despite the pitfalls, there are a lot of good reasons to build a show home. "There's no other way you can get as much promotion for your company as you can with a show home," says Lowell White of Calvert & White Custom Homes in Lake Oconee, Ga. White built Southern Living magazine show homes in 1992 and 1999. "Being affiliated with Southern Living is a huge plus. They have a very loyal readership."

Other custom builders who've successfully completed show homes report substantial benefits from the experience. It has pushed their companies to the forefront of their markets, improved their operations, and been a personal and satisfying challenge. Then there's the residual impact. Even three years later, Derrick Koger, who built Southern Living's 1998 Florida Idea House in Celebration, Fla., near Orlando, meets with people who were among the 64,000 who walked through his open house. "It gives us a leg up," he says. "We automatically have more credibility."

Of course there's risk as well as reward. A builder who works with a magazine carries all the financial liability on the show home, though he doesn't have control. It's like having custom home clients who are spending your money. "Most custom builders are used to making the final call," says Joan McCloskey, builder editor of Better Homes & Gardens magazine. "On a show home, the editors have that right."

And when building a show home with a charity, as Tom Dannenbaum of Classic Stellar Homes did in 2000 with the American Cancer Society in Scottsdale, Ariz., there's a danger of putting in all the bells and whistles and creating a white elephant.

By their very nature, though, show homes are meant to go over the top. On magazine homes, the architect typically donates his services, so he wants to make a statement. The magazine builds these houses to showcase advertiser products and create beautiful pictures for its pages. The manufacturers want to put in their latest, best, and most expensive products. With all these agendas pushing and pulling on the builder, bankruptcy may seem like a pleasant alternative. "We've worked with builders who ended up going bankrupt toward the end of the project," says McCloskey, "but most builders come out well."

So who's suited to this kind of high-pressure, high-profile project? Though it can be ego-boosting, show homes go smoother when egos are kept in bounds. "We're looking for someone who really wants to be a team player," says Bill McDougal, who manages the show home program for Southern Home magazine. "You have ourselves, the sponsors, the interior designer, the architect, and landscape architect. The builder has a very important role, but he has to understand that he's just part of the team."

Koger says successful show home projects are anti-ego. "You need architects and builders who are doing this for the right reasons. Carson Looney [of Looney, Ricks, Kiss in Memphis, Tenn.] was the architect on our project, and he is totally a team player. He listened and he understood."

The builder also must bring his good name and industry connections to the project: McCloskey looks for builders who have "a good `Dun and Brad'--a sound business with an excellent reputation. We also want them to be very promotion-minded and have good contacts with the local manufacturers and dealers."

For his part, the builder must be equally choosy about who he will enter into a show home project with. Ralph Haskins, who built Better Homes & Gardens' 2000 Home of the Year in Des Moines, Iowa, believes key to his project's success "was having a good architect and a good magazine staff on the project. When they made a decision about the design, they knew that I was paying for it."

And that brings up the final component for a successful project--a custom builder with open eyes and a strong backbone. "At the end of the day, the builder is paying for the house," Koger says. "You have to give them the budget on what the house can stand and stick to it."

When magazines plan to do a show home, they typically interview a half dozen or more builders to decide who has the right stuff for the project. On show homes for charities, the process is reversed; the builder goes looking for a charity he wants to be affiliated with and that wants to gain the proceeds from the show home. "It's not as easy as you might think," says Dannenbaum, whose company has built two show homes for charities. "They tend to be very careful about what they get involved in. They can't afford to make a mistake."