Payne Family Homes Revamps, Builds Neighborhoods

By Jerri Stroud, BBB Editor

Ken Kruse, president on Payne Family Homes, brings considerable homebuilding experience to the St. Louis-based homebuilder.

Ken Kruse, president on Payne Family Homes, brings considerable homebuilding experience to the St. Louis-based homebuilder.

Payne Family Homes was a sideline for David Payne, owner of PayneCrest Electric Co., when Ken Kruse met Payne in 2009.

“He had a homebuilding operation that he and his brother-in-law had started, and it needed new leadership,” said Kruse, a former audit manager who had spent more than a decade working first for The Jones Co. and then for Centex, a national homebuilding firm that bought out Jones in 2002.

“It was an opportunity to rev up the operation,” said Kruse, who joined Payne Family Homes as president. But the housing bubble had burst, and climbing back out of the recession would be a challenge. In early 2009, Payne Famly Homes had closed on one house. It owned 400 home sites.

Kruse said he set about getting the houses redesigned to be more in tune with buyers’ desires. Homes started selling, but without Payne’s financial backing, the company would have continued to struggle.

By the end of 2009, Payne had closed on 32 homes. Last year, Payne sold 161 homes, five times its volume in 2009. That growth landed the company on the St. Louis Business Journal’s list of the area’s fastest-growing companies three years in a row. Payne expects to sell 200 homes this year.

Payne Family Homes builds in the starter to move-up range of the market, selling homes priced at $160,000 to $400,000. The average sale price is $285,000. Most of the homes are in St. Charles County, but there are two locations in St. Louis County.

The firm has 50 employees, including a management team of five. Most have significant homebuilding experience, which is important, but Kruse wants people who ascribe to the company’s belief “that the customer is what provides us the opportunity to work.”

Because setting customers expectations is key to satisfaction, salespeople get monthly training on setting them. The company has a checklist of everything they must do as they go through options with the client and reach a final contract.

After that, there’s a meeting with the salesperson, the project manager and the customer, where they go over everything to make sure all is in order and there are no questions to be answered as the project moves from sale to production.

“It’s never as easy as checklists,” said Kruse. The key is having experienced people who believe in Payne’s product and its process, he said.

Once a closing date is set, Payne is committed to meeting that date, with nothing unfinished at closing. “The home will be complete when you move in,” he said.

A month after closing, Payne’s customer service representative walks through the house with the homeowner to check for any problems. There’s another walk-through at 11 months. Problems are addressed quickly, and Payne helps coordinate with subcontractors so they all come at the same time.

The company recently hired independent survey firm Woodland, O’Brien & Associates to evaluate how well it was satisfying customers. It scored well within the highest range in every category, and customer comments on the surveys were overwhelmingly positive.

BBB Accreditation is important because so many customers check BBB before they buy, Kruse said. “It’s important to have a great online reputation, and that helps.”

It’s not all work and no play at Payne. Cornhole tournaments in the warehouse it shares with PayneCrest Electric are an ongoing phenomenon after work, and the company has an annual softball tournament with its sister company.

dream house for St. Jude Children's Research Hospital

Payne Family Homes was the builder for this year’s St. Jude Dream Home, which benefits St. Jude Children’s Research Hospital in Memphis, Tenn. The home is in the Ohms Farm subdivision in St. Charles County.

The company sponsors an Alzheimer’s Association walk and it has sponsored baseball teams. This year, St. Jude Children’s Research Hospital chose Payne Family Homes to build the St. Jude Dream Home for the St. Louis area. The company built the home at a significantly reduced price, and many of its subcontractors donated part or all of their work.

Kruse said he was reluctant to take on the project at first because he didn’t want to pressure contractors to donate their time or materials after recent lean years in the homebuilding business. “They just did,” he said. “It was great to see.”

For the last four years, Payne Family Homes has ranked in Builder Magazine’s top 100 homebuilders nationally, coming in at 173 in 2013. It has won numerous awards from the Home Builders Association of Greater St. Louis.

“We established ourselves as one of the premium production homebuilders in the United States,” Kruse said. “We build neighborhoods.”

Profiles of BBB Accredited Businesses and BBB Accredited Charities are created as part of BBB’s TORCH Award process and are not intended as an endorsement. This year’s TORCH Award Luncheon will be Oct. 14 at the Chase Park Plaza Hotel in St .Louis. For more information, click here.

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