On the Block

Joyce and Jeffrey Westphal had been renters for 15 years when they decided in 1999 the time had come to buy their own home. The West Bend couple began looking around for something modest – he’s a mechanic, she’s in marketing – that would suit the couple and their daughter, then just on the cusp of her teenage years. The search discouraged them. “Everything in our price range needed $50,000 worth of work,” recalls Joyce, 36. That’s when they decided on new construction. “We found it was actually cheaper to build.” The Westphals began visiting model homes and soon found…

Joyce and Jeffrey Westphal had been renters for 15 years when they decided in 1999 the time had come to buy their own home. The West Bend couple began looking around for something modest – he’s a mechanic, she’s in marketing – that would suit the couple and their daughter, then just on the cusp of her teenage years.

The search discouraged them. “Everything in our price range needed $50,000 worth of work,” recalls Joyce, 36. That’s when they decided on new construction. “We found it was actually cheaper to build.”

The Westphals began visiting model homes and soon found one they liked, made by Bielinski Bros., the area’s largest homebuilder. “The model we walked into felt like home right away,” recalls Joyce. The couple had a Cape Cod-style three-bedroom home with a three-car garage built on a 1.8-acre lot they found themselves. They tweaked the design some, adding an extra gable, expanding some rooms and adding an additional window required by the subdivision in which they were building. Through it all, the couple found that the firm responded rapidly when glitches arose, and its employees and subcontractors were generally easy to work with. “They’ve come back right away with any problems we’ve had,” says Joyce. Cost overruns? Not a penny. “We got money back,” she says.

Other Bielinski customers report similar satisfaction.

Then there’s Norman and Jane Shelvik. About the same time the Westphals were having their home built, Bielinski was building the Shelviks’ home in Grafton. To say it didn’t go well would be an understatement. To this day, Norman, 42, a software engineer, complains of flooring that was put in crooked (the firm did hire a subcontractor to put in a new floor on top of the old one, with better results), walls that don’t appear to be square and nicks and gouges in woodwork left by subcontractors’ workers. And those were minor compared with the tribulations of the main upstairs bathroom, where tile flooring was put in wrong, a bathtub was set on a slant and a leak erupted after a seal on the tub drain was broken at the time the tub was reset.

“It was just one thing after another,” says Shelvik. While the company did make good on many of the problems – though not all, he says – “it was just very difficult. They were pretty good at coming in and fixing stuff, but it took them a long time to get [it] fixed.”

Still, the Shelviks have no plans to leave. Their children are still young, and the house, from the floor plan up, has many features they like. “We’re figuring we’ll be here 20 years at a minimum.”

The opposite experiences of the Shelviks and Westphals capture pretty succinctly the extremes that turned up on this year’s Milwaukee Magazine survey of homebuilders. This is the second time the magazine has looked at the people and firms who build houses in the greater Milwaukee area. In the four years since we last looked at the industry, a few of its players have changed, but quite a number have remained – and grown.

The list we developed this time is more extensive, thanks to greater response from readers (see “How We Did It,” page 67). It also benefits from more precise statistical analysis.

One thing is immediately apparent from this year’s survey: While a handful of builders grabbed the highest ratings, a much larger number managed to please enough customers to earn better-than-adequate average ratings. There are, our survey suggests, actually quite a large number of builders from which to choose that appear able to deliver a quality product and have a track record of doing so. That is arguably good, both for the industry and the consumer; with many decent builders from which to choose, competition should be relatively keen, helping to sustain quality.

In this year’s survey, Bielinski wound up in about the middle of the pack, scoring on average just below “good,” with respondents who rated it ranging from “adequate” to close to “excellent.” A dozen builders turned up who had stronger surveys, led by some much smaller, family-owned firms, including Woodhaven Homes, Jaeger-Turow Builders, Wolter Brothers Builders and Embassy Homes.

On the other hand, among all but the most highly rated builders, customer satisfaction appeared to vary enormously. It wasn’t unusual for one builder to get top ratings from some customers and poor ones from others.

“I think it’s a matter of personalities,” says James L. Kirschnik, a Brookfield construction lawyer. “Some people are kind of laid back and easy-going and others have very high expectations.”

Kirschnik says a key to customer satisfaction in construction is good communication. “You’ve got some builders where the guy will never return a call and another guy who’s available by cell phone 24 hours a day,” he says. “Basically, customers don’t like surprises or apparent inactivity.”

Builders themselves should take note: How customers perceive service correlates strongly with how they perceive construction quality, our survey found. That is, builders who got high marks for questions relating to the quality of their customer service – communication, timeliness and so on – also got high marks for the quality of the building itself. And, not surprisingly, customers who rated their builders high on either service or building quality were also more likely to say they’d recommend the builder to a friend.

Two years into an economic slump of crashed dot.coms, eviscerated 401k accounts and evaporated jobs, homebuilding is one industry that has continued to prove itself surprisingly strong. Nationally, home starts in 2002 were at their highest in 16 years, thanks to the lowest mortgage rates since the early 1960s. Locally, the picture was more subdued, with home starts down 8 percent in the greater Milwaukee area, according to the Metropolitan Builders Association. This year has started slowly due to winter weather and uncertainties brought on by the war in Iraq, says MBA Executive Director Matt Maroney, but “we are cautiously optimistic” that 2003 will match or perhaps beat last year.

People opt to build because they can’t find what they want in the existing home market, says Joann Glawe, vice president and sales manager for Shorewest Realtors. “They want something fresh, they want the latest design, they’re looking for volume ceilings, more open areas.” Nine-foot ceilings, big windows and vaulted family rooms are all the rage, adds Marsha Roman, a Brookfield-based Shorewest sales associate. Walls built on 2-by-6-inch timbers that allow for more insulation and therefore more efficient energy use are also in demand, as are newer window designs that filter out portions of sunlight that can fade woodwork.

And Roman says the demand is continuing apace. One example: Months before a subdivision in Franklin that she represents was to officially go on the market, offers or reservations had already been made for one-third of the 70 available lots.

Still, some trends are worrying those who watch the industry. Chief among them is the growing expense of lots. Roman recalls one she sold in a Kenosha County subdivision for $49,000 a few years ago; not long ago, the buyer resold it for $85,000. Standard lot prices have crept up to as high as $80,000, and in the Menomonee Falls/Germantown area, $90,000 isn’t unusual.

There are many reasons for this sharp increase. One is simply a shortage of land. Another, says the MBA’s Maroney, is increasing regulation: impact fees and other regulatory mechanisms that are hiking up development costs.

“What ends up happening is those costs get passed along to the end consumer,” says Maroney. “We’re starting to price people out of the housing market, including people who earn good incomes. It’s scary.”

The Top 10
The years 1999 and 2000 – when the homes of the customers we surveyed were built – were a bit unusual for the local homebuilding industry, says the MBA’s Maroney.

For one thing, 1999 kicked off “the boom years for all construction activity in the region – homebuilding and commercial,” he says. One consequence was shortages: in materials, such as drywall, and in the workers to put up homes. The tight labor market led to significant employee turnover; indeed, many surveys indicated that customers faced delays as builders had trouble finding enough workers. Maroney also notes that the high turnover may have been tough on some builders’ records for customer service.

There’s another important – and intangible – factor that can influence how things go between builder and buyer: personality. Just as in every other arena of life, some builders and customers get along better than others. Indeed, that may explain in part why, except for the very highest-scoring builders, most of those we’ve identified on our Top 10 list had their share of complaints from customers whose surveys pulled down their scores.

1. Woodhaven Homes
Woodhaven’s customers were among the most consistent in their assessment of their builder: Virtually all who responded to our survey branded the firm “excellent” on nearly every point, and the large number of responses – we heard from 14 Woodhaven homeowners – confirms the company’s strength that brought it to the top spot in this year’s list of homebuilders.

“We were looking for a builder we could communicate with,” says James Hribar, an executive at Rockwell Automation who screened the company carefully. Hribar deliberately chose a smaller firm, and it paid off. Woodhaven owner Al Eckhart was on top of the project throughout and was consistently available at 7:00 in the morning if Hribar called with a question or problem. Hribar and his family especially liked the personal touch: When the family decided to have a formal “groundbreaking” for the house as a ritual for their children (then 9 and 11), Eckhart and his crew cooperated.

Others in our survey were similarly enthusiastic. One buyer recounted how Woodhaven helped him avoid double payments when the buyer’s old home sold too slowly.

To be sure, you may have to pay for what you get; several of the Woodhaven homes in our survey were at about the half-million-dollar price point, and Eckhart confirms that’s the lion’s share of his business these days. Moreover, Eckhart has scaled back his volume to about five to eight homes a year.

Interested starter buyers may have a chance, though; Eckhart says he’s started two model ranch homes to be priced at around $150,000 (not including lot), and he plans to keep eyeing the entry-level market. “We feel that each end of the spectrum is a good place to be,” he says.

2. Jaeger-Turow Builders
As a self-employed mortgage broker and real estate agent – not to mention a two-time homeowner – you might think Debbie McKay would have a leg up in knowing the homebuilding world. Not so, she insists. If she had any advantage, it was the willingness to do her homework. McKay started with another builder but switched to Jaeger-Turow after she grew frustrated with proj-ect delays. She was glad she did – she found the small firm to be flexible and responsive. “When we didn’t agree on things, we came to a good compromise,” she says.

Another Jaeger-Turow customer had only one complaint: poor post-construction cleanup. (Others, however, didn’t have the same problem.) But where there were problems, said that respondent, “Great responsiveness has made up for the few issues with the house.”

3. Trustway Homes
The vast majority of this higher-priced builder’s customers who wrote us rated Trustway “excellent” overall. One who didn’t was Jennifer Busbey of the Town of Waukesha; she felt the company wasn’t responsive enough when her homebuilding project got waylaid for more than a year in a legal dispute with neighbors over a neighborhood mandate for a full masonry chimney. She also didn’t like the arbitration proceeding before the MBA that was built into the building contract. Busbey, though, said the building itself was well made.

Allen Hron, of Kewaskum, says he thought some subcontracting markups were too high, and he saved by hiring some subcontractors directly. He also wishes he had been told more about available furnace upgrades. But overall, Trustway compared favorably with the competitors Hron considered. “Their quality was good,” he says.

The rest of the firm’s customers, though, gave much better reviews. One, who has used other builders before and now recommends the firm to friends, said simply: “Trustway is one of the best builders in town.”

4. Wolter Brothers Builders
This builder of mid-priced homes – number one on our list last time around – continues to generate an enthusiastic customer following. On this year’s survey, the company’s construction quality scored well and its employees were highly responsive in the eyes of most who returned our surveys. “Subcontractors were excellent and promptly fixed any post-construction concerns,” said one. Another noted that when the manufacturer of defective flooring wouldn’t replace the material several years after the home was built, Wolter did so at no charge – even after the builder’s warranty had expired.

A few buyers we heard from had problems. One otherwise favorable survey reported disappointing slowness in coordinating with a subcontractor in the case of an unusual log home design. Another complained about delays of two or three days to get called back on questions. Such complaints were exceptions, though. More typical was the customer who told us that Wolter “made the experience almost stress free.… We could call them anytime, which wasn’t often, and they were right there to answer questions or get something done. I would build with them in a minute.”

5. Embassy Homes
Embassy, a mid-priced homebuilder, is another repeat member on the list. “Very easy to work with and responsive,” one customer told us.

Ed Mizgala seconds that response. Mizgala, a real estate agent himself, hired Embassy to build a home in New Berlin. He was drawn to Embassy because he liked the company’s Parade of Homes model he saw in 1998, the year before he built. He and his wife modified the design, adding a first-floor master suite, and the builder easily implemented the change. “Everything was on time,” he says, adding that standard hardware fixtures were “top of the line.” “We had a real good expediter who kept us informed and kept everything rolling along.”

6. Kings Way Homes
Kings Way is one of the larger builders on our list and specializes in higher-end homes. (The company operates a separate unit, Kettle Creek Homes, which was rated separately and is in the second half of the top 20.)

Kings Way customers seemed generally satisfied with the company’s work. “Kings Way has taken care of me even after the warranty period,” one told us. While another found a warranty representative “confrontational,” the buyer said the builder did ultimately resolve problems after the home was finished. Still another reported that Kings Way “finished ahead of schedule and under budget.” On the other hand, a couple of other buyers found fault with customer service representatives who were working for the company at the time.

That wasn’t so for Bill Kreuser, a manager for Emerson Electric in Racine, however. He hired Kings Way to build on land in Pleasant Prairie, south of Kenosha. “You can go through packages and talk about the cost per square foot and all of that; every time I walked into one of their houses, I felt like I was at home.” Kreuser visited often while the house was under construction and connected with his home’s carpentry crew on a personal level. “They built a picnic table for themselves to have lunch on and they left it behind for us. We still use it.”

7. Heritage Homes
Another repeat on this list, Heritage was the highest scoring among builders of lower-priced homes. The company, owned by Larry Kaplan, got generally favorable, although somewhat mixed, reviews. A few respondents complained of some quality issues, but they were in the minority. One satisfied buyer singled out the company and Kaplan as “helpful, personable and very low pressure.”

8. Don Belman Homes
Another builder of mid-priced homes, Don Belman is also making a second appearance on our list. While most of the firm’s 11 customers who responded this year gave the company high marks, a few pronounced its work “disappointing,” including one who took the company to arbitration over disputes relating to workmanship. But those were exceptions. Most who responded rated the company “good” or “excellent” – like the third-time builders who told us, “Everyone treated us as though we were important! I’m sorry that we hadn’t heard of Belman before!”

9. Lemel Homes
Lemel Homes, one of the highest ranked when we did our survey four years ago, generally produced highly favorable responses. But like most, it’s not perfect. Mike Czerwinski picked Lemel to build a home when he moved to Milwaukee to take a marketing job. He praised the company’s attention to detail and its flexibility, such as cooperating when he asked that exterior lumber be delivered to the site early so he could paint it himself. Christopher Cherney of Hartford had a contrasting experience, though. Cherney says the quality of his Lemel-built home is mostly good, but he was shocked that the cost of having to provide extra fill in the basement due to unusual problems with his home site was four times the original $6,000 estimate. Although Lemel employees have been out many times to follow up on problems, Cherney acknowledges, “The frustrating part is trying to get them.” Still, most customers we heard from had high marks for the company. Jeweler Donald Dugan noted that when Lemel built his New Berlin home, it was at the same time the builder’s son, Adam Lemel, a high school basketball player, died suddenly of a rare heart condition. “I expected that there would be delays and things put on the back burner,” says Dugan. “Things went on as planned. There was never any lapse. I was impressed with that.”

10. Demlang Builders
The other lower-priced builder on our top 10 list, Demlang is another repeat list member. Among complaints, one respondent felt overcharged for “minor changes” and another felt concerns weren’t taken seriously. But they were in the minority. Said one: “If we were to build again, we would only build with Demlang.”

The Rest of the Pack
The following 10 builders held spots 11 through 20 on our list. Details about survey responses can be found in the main table (page 58).

11. Coventry Homes
12. Bielinski Builders
13. Kettle Creek Homes
14. Badger Home Builders
15. Westridge Builders
16. Pebblebrook Homes
17. Mastercraft Builders
18. Cade Homes
19. Kaerek Homes
20. William Ryan

How We Did It
As in our last homebuilders story four years ago, we decided that the best way to evaluate local builders was to ask their customers. Working with Amerifax Data Corp., a local firm that tracks the building industry, we obtained a list of people who had homes built in Milwaukee and five surrounding counties (Racine, Kenosha, Waukesha, Washington and Ozaukee) and sent a one-page survey to each. (We chose 1999 in order to ensure that people had lived in their homes long enough to discover any defects and for post-construction problems to surface.) We asked them to rate their builders overall and on a variety of specific criteria, ranging from quality of construction and subcontractors to availability of company officials when problems arose. Scores were assigned to each answer, ranging from 0 for “unacceptable” performance on a particular item to 5 for “excellent.” We asked buyers if they would build with the same builder again and whether they’d recommend their builder to a friend.

We received more than 600 responses from customers. Jay Warner, a Cardinal Stritch University statistics instructor and independent quality consultant, helped by crunching the numbers on the survey, and we derived our list of top builders.

Mail-in surveys have limitations since the people who respond are self-selected and therefore don’t necessarily represent a random cross-section of the sample group. Even so, ratings fell all along the spectrum from positive to negative, with a number in the middle, assuring us that those who took part were neither just the complainers nor the most satisfied buyers. For our final calculations, we excluded builders for whom we received fewer than five usable surveys (see above).

(One builder contacted some customers who apparently were missing from our original list and solicited surveys, which were largely positive. But on the advice of our statistical consultant, we did not include those because they weren’t randomly generated the way the other responses were. Because other builders didn’t have an equal opportunity to prompt additional surveys, to have included that builder’s additional responses would have unfairly skewed the results.)

In calculating the results, Warner employed some statistical measures that provided additional useful information. One was the “standard deviation,” which Warner calculated for each builder. That’s a measure for how widely spread apart surveys on a particular builder were. The smaller a builder’s standard deviation, the closer that firm’s customers were to each other in their evaluations. The highest-scoring builders also showed the smallest standard deviations, indicating they provide not just quality but consistent quality.

Erik Gunn is a frequent contributor to Milwaukee Magazine.

Top 10
1. Woodhaven Homes
2. Jaeger-Turow Builders
3. Trustway Homes
4. Wolter Brothers Builders
5. Embassy Homes
6. Kings Way Homes
7. Heritage Homes
8. Don Belman Homes
9. Lemel Homes
10. Demlang Builders

Top Builders by Price Point
As Matt Maroney, executive director of the Metropolitan Builders Association, puts it: You don’t expect the same kind of food or service from Subway as you do from Eddie Martini’s. Homes are sold at various price points, and arguably, a comparison between a builder of half-million-dollar mini-mansions and one that builds $150,000 starter homes really isn’t fair.

While our master list of builders ranks them all against each other regardless of their market, we asked buyers who filled out our survey to tell us in what price bracket their homes fell. Based on the most frequent figure cited for each builder, we broke the list of builders into three broad categories, singling out those who scored highest in their particular pricing niche. For high-end homes exceeding $300,000, we identified five builders who scored better than the rest. For lower- and mid-priced homes, scores were too close to each other at the margins to warrant cutting off the lists at five, so we identified seven mid-priced builders and eight lower-priced ones who scored above their peers. (Badger Home Builders is on both lists because its business appeared equally divided between both categories, based on our survey.)

Keep a couple of things in mind, though. Prices have risen in the three to four years since the homes in our survey were built. Additionally, builders aren’t necessarily locked in to a particular price range; most offer a wide range of models at various price points. Therefore, these divisions need to be considered loosely.

More Than $300,000
These five builders were the top scorers among buyers of higher-priced homes:
Woodhaven Homes
Jaeger-Turow Builders
Trustway Homes
Kings Way Homes
Westridge Builders

These seven builders were the top scorers among buyers of mid-priced homes:
Wolter Brothers Builders
Embassy Homes
Don Belman Homes
Lemel Homes
Kettle Creek Homes
Badger Home Builders
Cade Homes

$200,000 or Less
These eight builders were the top scorers among buyers of lower-priced homes:
Heritage Homes
Zale Homes
Demlang Builders
Bielinski Builders
Badger Home Builders
Pebblebrook Homes
Mastercraft Builders
Kaerek Homes
Get It in Writing

That’s standard advice in any kind of business agreement, but attorney James L. Kirschnik says you can never emphasize it enough.

Kirschnik, who practices in Brookfield and represents both construction firms and customers, says that when it comes to construction, “there are just so many things that can go wrong, whether it’s weather or a bad subcontractor or a builder running out of money and not paying his subcontractors.”

He sees three main problems that can lead to disputes with homebuilders:

• Allowances. Buyers need to be clear about whether allowances – the money allotted in the building contract for features such as fixtures and flooring – are realistic or not, and if they want to go over the price, they need to be prepared to pay the difference. “There are some dramatic differences in a price for a Kohler spa tab compared with some fiberglass thing you can get anywhere,” he says. Builders, too, can cause problems here: “If the contractor is unrealistic in allowance estimates, that can be a problem.” How can you be sure? Generally, Kirschnik suggests checking out the model and making sure the contract and allowances specify the items you find there, unless you want to upgrade.

• Timing. Delays can happen for all sorts of reasons – from weather to the availability of labor. For a buyer banking on getting in by a certain date – and faced with the prospect of living in a hotel after having sold a house in anticipation of the move – things can get strained. Unfortunately, that’s the hardest point to put in a contract. “Most builders won’t time themselves into some minimum period” for completing the project, says Kirschnik.

• Changes. “If you’re going to change things, get it in writing,” says Kirschnik. A minor change that is mutually agreed upon may not need a sign-off, but that’s the exception. Written contracts, including written change orders that specify the details of a change and its cost, are essential. Elementary? Perhaps, but Kirschnik has run into instances where that simple advice was ignored. He still marvels about a buyer he once met who had no contract. “That was incredible.”

But when there’s trouble between buyer and builder, he warns, it can blow up big time. “There are a lot of emotions involved. From the consumer standpoint, people are thinking, ‘This is our dream to build our home.’ Then something goes wrong and it can be very emotional for them.”

Zale Homes
Zale, based in Buffalo Grove, Illinois, received enough favorable reviews to place it at number 8 on our list, but we decided to treat it separately because the family-owned company only builds as far north as Kenosha County. Most of its Kenosha customers’ homes were inexpensive enough to land it in the lower-priced segment of our list, but the combination of higher Illinois real estate prices and price increases on both sides of the border would place it in the medium-priced category these days. Among respondents to our survey, one complained of inadequate cleaning before the ground was graded and landscaped and another took the company to mediation and complained about the outcome. A third, while rating the company “good” overall, was disappointed by a still unresolved warranty dispute. A majority of customers we heard from gave the firm “Good” or “Excellent” ratings, however. “I would definitely use them again,” said one.

High Marks
The following 18 builders definitely made a good impression on their customers; unfortunately, there were too few surveys received for each for us to be sure they were representative of the majority of these builders’ respective clients. Still, based on the enthusiasm of homeowners who did respond, they might be worth checking out. The overall scores, the builders and the number of surveys received are listed for each.

93 The Freeman Group 2
93 Moore Designs2
92 Brookside Builders 2
92 Matt Hall & Son 2
91.5 Meridian Homes 4
91.17 James Craig Builders 4
91 James H. Hoffman Builders 2
90 Anthony Thomas Builders 3
89.83 J. Anthony Homes 3
89.5 Weske Building Corp. 2
89 John Bohn 2
87.17 Joseph Douglas Homes4
86 Colby 2
85.83 Jeff Horwath Builders 3
85 Cobblestone 2
85 Zach Building Co. 2
84 Kingfogl Construction Co. 2
83.7 David & Goliath Builders 3