As the COVID-19 pandemic continues to impact every industry, the nation’s largest homebuilder is taking steps to help minimize the impact on its business.
Miami-based Lennar Corp. said yesterday that it’s now allowing people to purchase a home completely remotely with the option for “a personal and private tour” prior to closing.
The move comes just weeks after one of the company’s employees, a Seattle-based customer care representative, died from the coronavirus.
Lennar CEO Rick Beckwitt says the company has accelerated its digital platform to accommodate customers’ desires to close on their home “without risk or contact.”
These measures include the implementation of a virtual new home orientation process by which homebuyers can walk and review their completed home from anywhere via FaceTime. Lennar’s title company has also upped the number of digital closings and created an express drive-thru for customers to get documents notarized from their vehicles.
“During the home closing, there is no physical contact with our customer and our closing associates use hand sanitizer, wear gloves, and give our customer a brand new sterile pen to execute the closings documents,” he says.
Lennar actually began shifting to an overall more digital approach several years ago, according to Beckwitt.
It started by enhancing its website and including relevant content such as community details, pricing, video tours, interior and exterior images, and floor plans.
“With the current situation we have taken that a step further by using the technology we have available such as Skype and Docusign to connect the customers to our New Home Consultants and loan officers moving buyers through the sales funnel more conveniently, digitally and seamlessly,” Beckwitt says. “So, it’s essentially taking that digital approach we already had and amplifying it with additional technology we already have at our fingertips.”
He notes that in recent years, Lennar has also invested in several fintech partnerships with companies such as Blend, Hippo, Notarize and CalAtlantic Title “that will provide a digital experience for the resale market.”
“We have also created a digital mortgage lending platform that gets the mortgage process started with one touch of the smartphone app,” Beckwitt adds.
How it works
People interested in potentially purchasing a home remotely start out by contacting an Internet Sales Concierge with Lennar to schedule a meeting. They then meet remotely with a new home consultant. The potential home buyers then can take digital home tours and ask questions. (Here’s an example of one of their virtual home tours). They have the opportunity to purchase the home with a private tour before closing.
I asked Beckwitt if this process applied to both new and existing homes, and he says that while resales will likely use similar technology, “new homes are much better situated to deliver better results because they are much more consistently delivered, whereas a virtual tour of a resale may not identify prominent flaws.” Plus, as Beckwitt points out, Lennar only builds new homes.
A home purchase seems too big for many people to want to make without actually seeing the home first. But Lennar is confident homebuyers will come around and be more open to the idea.
“We have seen a more digital shift prior to the virus,” Beckwitt says. “Our customers like the simplicity, convenience and safety that come with new digital technologies.”
Lennar became the largest homebuilder (by revenue) in the United States following a merger with CalAtlantic in February 2018, according to Benzinga Newsdesk. The company’s homebuilding operations target demographic are “first-time, move-up, and active adult homebuyers,” says Benzinga.
So far, its stock is holding up.
On March 19, Barron’s reported that Lennar reported strong first-quarter earnings of $398.5 million, or $1.27 per share, heartily beating both guidance and analyst estimates. Previous guidance was $0.80-$0.85 per share, while analyst consensus was $0.84 a share, according to FactSet. Its stock was up 7.6% Thursday afternoon and closed up by another 7.8% on March 20 to $34.08 as a result of the robust performance. But it was still down significantly from its 52-week-high of $71.38.
The company also announced yesterday it was suspending guidance “as the world resets and finds its way forward,” in the wake of the impact of the coronavirus pandemic.
Meanwhile, a number of startups are looking at ways to use technology to creatively solve traditional homebuilding challenges. Forbes staff writer Samantha Sharf in January profiled Homebound, a Santa Rosa, Calif.-based founded by tech executive Nikki Pechet and venture capital investor Jack Abraham. The pair, impacted by the California wildfires, set out to reinvent home building with software designed to cut the delays and cost overruns that plague the industry.