When it comes to building homes, every builder knows the phrase cost of doing business. But what’s less often discussed is the cost of not doing business the right way. Especially when it comes to your Online Sales Counselor (OSC) program.

Profit Margins in Homebuilding

According to the National Association of Home Builders (NAHB), the average net profit margin for builders was 7.0% in 2020 and rose to 8.7% in 2023, the highest in more than three decades. Public builders (like D.R. Horton, Pulte, Toll Brothers) often report consolidated net margins in the low-to-mid teens (10–17%). But for most privately held builders, the reality is closer to that 7–9% range, though some are earning in the double digits.

But lets look at this on the low side. That means for every $500,000 home sold, a builder is clearing about $30,000 in net profit at best. Net.

Margins are tight. And in a margin-sensitive business, a leaky lead funnel is a liability you can’t afford.

The OSC Impact on Sales

A well-run OSC program is one of the most significant levers a builder can pull to improve sales efficiency. On average, 35–45% of a builder’s sales begin in their OSC program, with best-in-class programs reaching 55% or more. In some cases, OSCs touch nearly 90% of total sales volume.

By contrast, builders without an OSC, or with a poorly trained program, often see their digital leads converting at much lower levels. In those cases, online sources may only account for 20–30% of overall sales, and sometimes less.

That’s a difference of dozens, even hundreds, of homes per year depending on the size of your operation. As cost pressures rise with materials, labor, carry costs, and incentives, don’t you want to fine tune and energize a program that can help you move homes quicker and more efficiently?

The ROI of Training an OSC

Here’s the math. Let’s assume you’re operating on the low end of net profit (6%). How many home sales would it take to cover the investment in a fully trained, fully functioning OSC program?

• At a $500,000 average home price:
  – 6-month program is paid for in less than one sale (0.84 homes)
  – 12-month program is paid for in about 1.5 sales
• At a $750,000 average home price:
  – 6-month program is paid for in just over half a sale (0.56 homes)
  – 12-month program is paid for in one sale
• At $1,000,000+ home price points:
  – 6-month program is paid for in less than half a sale (0.42 homes)
  – 12-month program is paid for in under one sale (0.75 homes)

In other words: one home sale more than covers the cost of a training and consulting program that can dramatically increase your sales velocity.

The Cost of Not Acting

The “cost of doing business” isn’t just overhead, materials, and land. It’s also the opportunity cost of letting digital leads slip through the cracks. If your OSC isn’t operating at peak performance, or worse, if you don’t have one, you’re leaving hundreds of thousands (if not millions) in net profit on the table.

In a market where margins are single-digit and competition is fierce, the right investment in training pays for itself almost instantly.