194 Educating New Construction Home Buyers - Arthur Chapin Dec 6 2023

Greg Bray: [00:00:00] Hello everybody and welcome to today's episode of The Home Builder Digital Marketing Podcast. I'm Greg Bray with Blue Tangerine.

Kevin Weitzel: And I'm Kevin Weitzel with Zonda and Livabl.

Greg Bray: And we are excited today to have joining us on the show, Arthur Chapin. Arthur is the Chief Growth Officer of Move, Inc. who is the operator of Realtor.com. Welcome, Arthur. Thanks for being with us today.

Arthur Chapin: Thank you. Delighted to be here.

Greg Bray: Well, Arthur, let's start off and just give us that quick background of who you are and tell us a little bit about yourself.

Arthur Chapin: Let's see. I got into the industry about a year and a half ago. Before that I spent [00:01:00] 21 years in travel, working at Expedia, where I started as their first intern, helping them actually move servers out of the Microsoft campus into their first new building. My sort of final responsibility there was I was running product technology and strategy for all of their lodging businesses. So, this includes the Expedia brands, but also Travelocity, Orbits, hotels.com, VRBO, et cetera. So, definitely a really fun 21 years in travel.

And after that, it was really hard to think about what industry next. The real estate space just really piqued my interest cause I think it's such an impactful area of people's lives. And ultimately, it's a lot more fun to work on products that really matter to people. Found my way here, and now I look after our new construction business as well as our rentals business at Realtor.

Kevin Weitzel: That is silly cool. But before we deep dive further into this, we need to find out something personal about you that our listeners will find out on our podcast that has nothing to do with work.

Arthur Chapin: Nothing to do with work. I am an avid [00:02:00] builder. And so, I spent much of my work career building digital things. Before I actually became full-time at Expedia, I'd built motorcycles, During COVID, and I think it was just not traveling as much, like, I wasn't as busy, so I had more evenings to myself, et cetera, and I got the bug of building things again. That has turned into an incredibly addictive hobby, where I now have a super large shop and I built some furniture and do a lot of welding projects and I'm starting to plan doing another bike. So, I'm a very hands-on builder, welder, et cetera, in addition to knowing a few things about computers.

Kevin Weitzel: So, motorcycles, are you talking about like you're fabricating the frame and dropping an S and S motor into it? What are you doing?

Arthur Chapin: So, I never fabricated my own frames. I think there's a big liability there, and I was a young, inexperienced, not very good welder at the time. A lot of it was complete teardowns of a Harley. So, I would take a part of Harley, strip the frame, often stretch it or modify it, and then rebuild, basically of everything custom, but the idea of keeping the [00:03:00] reliability and the rideability of a Harley. I also wouldn't mess with the geometry much because I don't love those heavily raked-out bikes. I think, you know, it's impossible to turn around in a parking lot.

Kevin Weitzel: So do you have a key bike that you like? Is it the panhead, a flathead?

Arthur Chapin: FXS was the one that I would almost always, yeah. So, it's basically their soft tail standard.

Kevin Weitzel: Okay. So, evolution, what era of motor are you working with?

Arthur Chapin: oh, it's been so many years since I was in bikes. Well, I mean 2000 to 2006 ish. It's the first generation of fuel injected.

Kevin Weitzel: Either the evolution or the 103. It's one of the two.

Arthur Chapin: evolution. I'm pretty sure.

Kevin Weitzel: Yeah, Evolution. Nice.

Arthur Chapin: I haven't ridden for ten years since my son was born. So, now all my bikes sit randomly around the house because my partner is nice enough to let me, like park one next to the pool table. So, definitely appreciate her for that.

Greg Bray: Well, Arthur, you probably don't know that Kevin's got a history in the motorcycle world. He's definitely more connected to that than I am. Those are the ones with the two wheels. Right? That's what we're talking about? Is that?

Kevin Weitzel: Yes.

Arthur Chapin: Right.

Greg Bray: Okay. Got it. All right. Got it. Well, Arthur, tell us a little bit more about what attracted you to wanting to be [00:04:00] with Move specifically and kind of in the home building industry, given kind of that technology background that you've got.

Arthur Chapin: Yeah. I started with what are the industries that are most impactful to people and real estate, especially when we think about what we can do to help first-time homebuyers achieve that dream of home ownership, was really, really interesting. And I had known a couple of people who had gone to Move and started with just really asking questions and that became a role through conversation.

One of the things that really drew me to Move specifically and to realtor is the opportunity to lead rentals and new construction, and kind of think about it as getting to work on the product where people early in their journey are trying to find their first places to live. So, this is the rentals product and the product that's bringing new supply into the market or sort of, like, the beginning of the life of a home with new construction. And both of those are just really fascinating spaces. We can use technology to significantly increase the [00:05:00] information that people have, the confidence that they have, and hopefully create smoother, faster journeys to home ownership where that's right for somebody.

Kevin Weitzel: Let me get this straight. Greg, let me just do one thing here. It's in my brain. Arthur, you spent how many years at Expedia?

Arthur Chapin: Twenty-one.

Kevin Weitzel: Revolutionizing the way that people literally find airfare and hotels and car rentals, and then you came to the dinosaur industry that the home builder industry is?

Arthur Chapin: I wouldn't say it's dinosaur, but I have seen a few areas that maybe it's not quite as cutting edge. You know, I think we need to take some big swings and really try and re-envision, how people go about finding the right place for them. I think this is especially true in new construction, where there is a lot of preconceived notions of what new construction is. There's not a lot of people who really understand all of the aspects of why new construction might be right for them. The full sort of picture on affordability things like that. It's a cool space and it's an area that I do think is ripe for some bigger leaps forward as [00:06:00] opposed to just incremental.

Greg Bray: Let's peel that back a little bit more then. What is one of those aha moments you went, gosh, we should look at this or we should look at that could make a difference for this industry as a whole?

Arthur Chapin: Well, first is I'm still learning and still trying to listen to our consumers. I'm a big fan of you really do need to put yourself in the shoes of your consumers to come up with big sort of evolutions or even bigger leaps forward. So, still in the process. But if I think about the areas specifically, there's a lot that could be done around accessing audience, and really audience that is younger, more first-time home buyer-centric. And I think this is especially true within the new construction space.

There's obviously a lot of conversation and talk about Google and spend on Google, but a lot of the newer generation of homebuyers are going to be on other platforms. Whether it's Meta or even something like Twitch, which I have to admit, I had to do my own research to figure out exactly why are people watching [00:07:00] other people do things. But it has a massive audience, and I think there's a real opportunity for us as an industry to really connect in with a younger generation of potential customer.

And then it comes down to what can we do to inform them and inform them in a way that they consume information. I still believe that there is a perception of new construction that actually doesn't fully cover everything that new construction can offer. Education is a huge opportunity for us in the space.

The other piece that I'm thinking about is just the number of new technologies around actually building. Whether it be 3D printed homes, et cetera. There's a lot happening there and it's not coming together in a way where there's like one place that you can really learn all of the different options to create a home. That is something that is going to happen over time. We'd like to be a big part and a leader in that.

Greg Bray: I've heard people in the industry get a little frustrated with the idea that we compare resale homes and new homes kind of like head to head. Whereas, [00:08:00] like, in the auto industry, there's very much a segregation between new cars and used cars or resale cars, What's kind of your thought on whether that's good or bad for these home buyers to kind of put that new versus used, if you will, or resale next to each other when the price per square foot just isn't quite a fair comparison when something's brand new versus got some use put into it. Any thoughts on that?

Arthur Chapin: I still think they need to be compared side by side because ultimately a consumer is making a decision of where am I going to live. You know, and certainly if you get into like classic cars, et cetera, you can get cars that are absolutely sort of pristine and beautiful, but, you know, there tends to be a really, really big difference in terms of walking into a dealership and buying a brand new car versus a used car. As far as I understand the industry, people do consider sort of like the one or two-year-old car in the same bucket. It goes through their [00:09:00] mind of, do you buy something that's one or two years old that still has a warranty, et cetera versus a new car.

For homes, the location is such a big deal. We know it's one of the biggest deciding factors. I just don't see how you get out of the fact that you're going to be comparing all of these homes, eventually, on a map or location-based. To me, it's really about education. I think that the car-buying community is actually a lot more informed around, like, hey, if there's a warranty, I don't have to pay for this. And then, you know, oil changes are covered or, hey, it's a Tesla and it actually doesn't even need an oil change and sort of all of those things.

I really don't think that the consumer base is educated in the home buyer world. I see that as a huge opportunity, taking an audience who's struggling, especially right now where inventory is really, really low, rates are really high, and people are struggling to find the right home for them, and educating them around the benefits of new construction. And maybe they're willing to take a slight sacrifice on location for a [00:10:00] nicer, newer place that will have a lower total cost of ownership, and in many cases includes incentives to help them actually get into that home. They're going to be compared side by side, no matter what we do, just because people are thinking about it as a home, and it's a little different than a car.

Kevin Weitzel: But you know, Arthur, there's certain things you can't compare side by side, pounds of dead skin, number of grams of toenail clippings in the carpet. Because new homes don't have those. They're zeros. Anything compared to a not is an ot.

Arthur Chapin: Absolutely. I have yet to see one of those commercials that really called that out. So, let me know how that works if you hear of anybody buying that. But I just think that there's a big perception change that needs to happen in the industry. And as I talk to consumers, I often hear them associate new construction, especially sort of community level built new construction as lower quality, and it's just simply not true.

There's a lot we need to do to actually sort of have people think about, do you really want to live in a house that somebody else has lived in? Toenail clippings maybe one thing. I [00:11:00] personally would only have hardwoods in a place partially because I think, you know, definitely don't want to live in used carpet. But, I think that there's also the element of what level of maintenance has been done in the past. Was it regularly maintained? Were the fixes done and fully permitted? Like, there's just so many things that I don't actually don't think people consider when they buy a house. They sort of get enamored with the floor plan and the view, if you will.

Greg Bray: And Kevin, just a reminder that we're trying to keep this a family-friendly show. So, if you could keep the visuals, you know, toned down just a little bit.

Kevin Weitzel: True, true, true. But it's funny because Arthur, you bring up two points that actually glide right together. And that's one is classic cars. You do have that level from full gut to completely restored. But when people look at old cars, they're like, Oh, I wish we made cars the way we used to. It's like, no, you don't. They weren't safe. They didn't get good gas mileage. They broke down far too often. Their lifespan was much, much shorter. There was nothing great about old cars, except they look really cool. Trust me. I own one. I own a 65 MG and [00:12:00] trust me, they're a pain in the butt.

Arthur Chapin: Does that have synchros in the clutch?

Kevin Weitzel: It does not. Yeah, shifting gears is not fun in those.

Arthur Chapin: Horrible. Absolutely horrible.

Kevin Weitzel: Yeah, they're horrible. Hey, Arthur, let me talk negatively about my car, please. Let me be the only one that does it because when other people do it hurts my feelings. But no, when we look at homes, you know, you can look at an older home. They had old-growth wood. We can talk about the benefits there. But, they also had horrible insulation. They have leaky windows that were not very efficient for energy consumption. So, you're on it. You're on it 100%.

Arthur Chapin: That's an area where I see a real opportunity around really expanding when people think new construction, also expanding what they think about. There's some really cool stuff happening in the modular space in terms of bring your own lot sort of concept. And so, I think, in addition to the opportunity to really drive more people to larger sort of home builders, there's a big, big opportunity to have people start to really have a better understanding of all of the options when they're looking to buy a place.

The build option, it's a super interesting [00:13:00] one. I'm actually starting a process myself. And you're right, you know, you look at the newer installation techniques, the home is going to be five times more energy efficient. I'm making that up. I'm not sure that's true. You know, than the house that I live in now. I think that there's a lot we can do to help inform.

Greg Bray: I think one of the areas that builders miss on all this is the whole warranty concept, the new home warranty comparatively to an older home. Often, I see builders try to kind of, oh, that's something we have to do, or it's something that costs us money or something. It's like, well, if you're going to do that anyway, let's turn it into an advantage, a differentiator.

Why would you get something that could break down tomorrow when this one, you're going to get all this stuff fixed if something goes wrong for some period of time, and even figure out how to offer that even longer? You know, you look at some of the cars that now do the 10-year instead of the standard 3-year type of thing as a differentiator, right? They play their odds. They do good work. They don't have to fix things as often. And I don't know, I think there's a missed opportunity there from a new versus used [00:14:00] kind of comparison as well.

Arthur Chapin: I think it's an interesting point. This is where I would almost wonder, is it a warranty or do we need to change how people think about the guarantee that goes behind a home that's less about the company standing behind it when something goes wrong and is also about the quality of the build itself. That's where warranty almost has a bit of a people are worried about warranties of cars because they all break down.

Just really talking about new building techniques, better methods of construction, better appliances, et cetera. Does that lead to not only a situation where they'll take care of you if something goes wrong but more importantly, things just don't go wrong nearly as much? And that is a much more stress-free life than living in an older home that has something every single year going wrong a bit and trying to figure out you know, what's the process to find a roofer to come and fix this leak, et cetera. I think there's a lot that could be sold and really branded around the quality of the [00:15:00] construction itself, in addition to them standing behind it.

Greg Bray: So, where do you see realtor.com's role in this educational process from an industry standpoint? Is that something that you guys are trying to create content around, or is it more about just kind of, Hey, builders, you should send us better descriptions? What is kind of your vision there?

Arthur Chapin: The answer is probably yes to that. Like we'd love better descriptions. We'd love more content. Certainly, anything we can do to help better inform somebody of the community or the house before they go there is a positive thing, and it's going to increase the quality of the lead and the quality of that contact. From our standpoint, we've been building this business, right? So, we have a couple of different offerings now for builders, and really, we do see education as a big next step for us.

Right now, it's interesting because of such a low level of houses on the market, new construction makes up a big percentage now of what's available within the realtor marketplace or any marketplace.[00:16:00] I see it as not only just education about the community itself or the house itself but also education to help people make those comparisons. So, they're not thinking apples to apples when they look at cost per square foot, which you brought up earlier, but really helping to educate them through that search process. Which will hopefully open up the number of things that they are willing to consider.

And that's really a big opportunity that we're thinking about right now and sort of referring it to is every time a consumer feels like they might be at a dead end, right? They've done a search. They don't see any houses they think are right for them. What can we do to help them open up their search horizons and really help them discover something new and something that is hopefully going to meet their needs for a home?

That's really where we're putting our energy into now. But I would love to have us over the coming years, really invest into a lot of education as well around things like build your own lot and a lot of modern newer building techniques that can just help to increase the number of options that consumers have.

Greg Bray: Arthur, tell us just a little bit more just [00:17:00] again about what realtor.com is offering to builders beyond just hey, list your inventory in the MLS and it will show up on the website. I think over the last few years, you guys have really embraced that new construction has a different set of needs than just put the stuff in the MLS, which is where it used to be not that long ago. Tell us just a little bit more about kind of what you've got today and where that's headed and how somebody takes advantage of it.

Arthur Chapin: Yeah, absolutely. So, we have two key products within the new construction space. The first is called Sales Builder, and this is a listing product. The leads go directly to the community. You know, our audience is about 75 million, so a really big audience that we're accessing. And one of the more unique things about this product is the pricing model. And what we did was put caps on the number of leads that we charge for. And this allows, communities to have a very set budget, and can plan on it. But it also means for really popular communities who get 10, 20, 30 leads, well, they're only paying for three. We only charge for [00:18:00] the first three leads. So, we've seen a lot of success with that and really strong, positive reactions from our partners.

In addition to that, we've launched a media product, and this is really creating native ads for builders to help to get their brand out and to do some of the education and awareness within RDC, but then also at realtor. com. But then also, we have a smaller offering around Facebook retargeting. So, those are the two products that we have right now.

Greg Bray: When you look at builders that are trying to send content to you, do you see any patterns of like common misses, things that they're just totally not getting? Or man, it's like you guys are just the bare minimums here. What else would you want from them?

Arthur Chapin: I don't have like one piece of specific content that we're not getting. I will say we don't do a very good job as an industry talking about the neighborhood and sort of what is it like to live in that area. I think there's a lot more that could be done around that. You know, people are not only [00:19:00] buying a home in a specific location, they're also buying into that community and to everything that it offers. I will say the scenario that builders do fairly well, because often communities have, you know, a lot of amenities that they talk about. But if we think about even outside of that. What is the lifestyle that comes to that community? So, I think there's an opportunity there.

And then certainly the more and more that we can create digitized experiences of viewing that property is just going to increase how qualified somebody is when they actually come out to look at it. And so, we'd encourage builders to continue to really invest in the area.

Greg Bray: It's interesting that you say more about lifestyle, more about community because we've done some research at Blue Tangerine that talks about the number one thing people are looking for when they come to a home builder's website is location information. And you mentioned location already. You guys are very location-structured in the way that you put your data out there, which totally makes sense. But so many builder websites are actually very lifestyle-oriented so [00:20:00] much more that you struggle to figure out where they even build.

You know, they have all these pretty pictures of all the amenities, all the smiley, happy people going down the sidewalk, and it's like, is this in Texas or California? I can't decide. You know, it's like they hide it almost. Not that they don't want people to know where they are, but they don't make it easy to find. And so, for you to talk about this idea that, gosh, we need more about the community, it's kind of interesting to me to see that because of the way the platforms are structured, that people kind of come at it a little bit different.

Arthur Chapin: Yeah. Because when I think community, I think location is so key to that. It really is beyond what are the amenities that are offered in a community. It's actually, Hey, how far is this from my work? There's some really simple questions that we as an industry could be a lot better at helping you search and discover around. Whether or not it has a pool is great, but really, when people are thinking about what is my living experience here, what is going to be that experience, so much of it comes down to where is it actually located and what is around it that's probably on the outskirts [00:21:00] of that planned community. Am I going to easily be able to get to a grocery store? Is my work commute easy? Are there places that my kids can go ride their bikes? There's a lot of questions that people have that none of us do a great job answering.

And part of the challenge there is for all the marketers, well, guess where consumers go? They go back to Google, they do a search, and then they end up clicking on a paid link again when they start to get interested in whatever they find and we just keep on repaying for customers.

Greg Bray: So, Arthur, I'm old enough to remember when Expedia was a new thing. All right, and the whole buzz of gosh, this is going to ruin travel agents forever, right? This is just going to disrupt and destroy them. When you think about kind of the journey you went through there, and now you look at homes and selling homes online and some of the potential opportunities that come as we digitize more and more of that buyer journey, do you have some thoughts about where you see that kind of heading given your experience in the technology world?

Arthur Chapin: I'm [00:22:00] starting to form some hypothesis in terms of where we might want to invest. I think at a very high level, I see a real opportunity to help people understand all of their options. And you could imagine what an experience like that might look like. But the challenge in building something like that is not building the digital experience, it's actually going and acquiring all the content and building all of the relationships to be able to provide a one-stop shop to answer your question of, how do I get a home in X area? So, that's an area that we're really starting to think about is like, how would you tackle that content challenge? Because once you do that, it's off to the races. Building a really immersive digital experience, that's something we'll just learn into.

But the other piece is, I'd say the real estate industry as a whole hasn't really changed much in a long, long time. I suspect that at some point, something big is going to change it to really improve the whole experience. And so, what we've talked a lot about is just, like, the early stage of how do you get [00:23:00] somebody interested in place? That is a big area that's ripe for disruption. But I also think streamlining the process, from sort of like, yes, I want this place to the time that you open that door with your keys for the first time. What does that process look like?

And actually, there's a lot of startups out right now that are doing cool stuff around, okay, well, now you've opened that door to your house, you're in it. How do I manage it? How do I make that as low-stress as possible? So, there's a bunch of areas that I'm sure are going to have disruption but ultimately, it's only going to happen if we start to really go back to watching our consumers and putting ourselves in their shoes because I think that's where the insights are going to come from that will be disruptive. Otherwise, we're just going to keep on doing slight iterations and improvements on what we have today.

Greg Bray: Well, Arthur, it's been great for you to spend so much time with us today and we appreciate it. Do you have any kind of last thoughts or words of advice that you'd like to leave with our listeners today?

Arthur Chapin: I'll sort of go back to that concept of putting our feet in our [00:24:00] customer shoes. It's something that this industry I think could really benefit from. And there is a lot of research that I see done but I wonder how much is being done to be there with people while they shop to really understand what they're thinking about what they're talking about.

There's a famous story from Clay Christianson, who was a really amazing scholar at HBS, wrote The Innovator's Dilemma around work that was done to try and figure out how you sell more milkshakes. What I think is so impactful about that is that it gives an example of how all the obvious stuff had been tried, and it wasn't until they were there at the restaurant every day asking questions and really trying to get to the root of what somebody was trying to accomplish, that they were able to figure out that the route to sell more milkshakes wasn't intuitive. It was more about what job was that milkshake doing.

As I think about our job as a portal and really helping people to, let's call it, we want to get them to the point where they're pretty sure that [00:25:00] they want this thing. And then it's obviously our partners' jobs to get it over the line and to sign a contract and ultimately get them in the home. But what are the unmet needs? What are the things that we're not doing well for consumers that cause them to have to feel like they don't have all the information, that cause them to go out to Google with a ton of different searches? That's just the thing I would push on is what can we do to really listen more to the deep underlying needs that our customers have?

Kevin Weitzel: Arthur, you know what we're not doing right now? We're not listening to our consumers and selling milkshakes for breakfast is what we're not doing.

I remember your speech at IBS. All of this fancy electronic and virtual and digital capacity that we have in this world, if it ever fails, we always have a fail-safe. We can always put Rick Baldonado in one of his dapper suits and just have him be a spokesperson for every single community on the planet.

Arthur Chapin: Absolutely.

Kevin Weitzel: Done. Right?

Arthur Chapin: It's gonna be my retirement plan.

Greg Bray: Yeah. [00:26:00] We all love Rick. Right. We all love Rick. Well, Arthur, thanks so much again for spending time with us. If somebody wants to get in touch and connect with you, what's the best way for them to reach out?

Arthur Chapin: LinkedIn. Happy to take any connection requests on LinkedIn.

Greg Bray: Awesome. Well, thanks again. And thank you everybody for listening today to The Home Builder Digital Marketing Podcast. I'm Greg Bray with Blue Tangerine.

Kevin Weitzel: And I'm Kevin Weitzel with Zonda and Livabl. Thank you. [00:27:00]