For years, it was taken as a given at Kaufman & Broad Home Corp. that people in Denver liked snuggling up in front of a fire on snowy winter evenings. Fireplaces were standard in all the homes K&B built there.

Then, last year, the company did something new: It asked potential home buyers which features they actually wanted in a house. To K&B's surprise, half the respondents in Denver said they would willingly forgo a fireplace, especially if it meant they could shave $2,000 off the price of a $130,000 house. So K&B no longer offers them as standard features there.

Surveying consumer preferences may be fundamental in most industries, but home builders are late catching on. Like its rivals, K&B's longstanding policy was to build first and hope for the best. Builders filled developments with a handful of cookie-cutter designs that could be mass-produced economically. If a given model didn't sell, they simply knocked down the price.

That all changed in 1996, after K&B spent $110 million to acquire a small San Antonio home builder that was doing things differently. Rayco Ltd. attributed its 40% share of the local market to its strategy of building to suit customer tastes, which it gleaned through extensive surveys.

At around the same time, K&B's chief executive, Bruce Karatz, happened to overhear one of his salesmen making a high-pressure pitch to a prospective buyer. The buyer, looking to save money, didn't want a kitchen island counter. But because the island was standard in the home she was considering, the salesman was pushing to change her mind.

"We were building what we thought this customer needed," recalls Mr. Karatz, adding that builders should "not be so presumptuous."

That insight led to a K&B survey of 600,000 recent home buyers around the nation. The findings have changed many preconceived notions about what people really want in a home. And they have transformed the way K&B does business.

Like other developers in Denver, K&B used to routinely build houses with basements. K&B's surveys showed many people prefered doing without. Losing a basement and a garage can cut the cost of a single-family home by as much as 20%. Says Glen Barnard, K&B's division president in Colorado: "The preferences about basements were probably there for years, but we never bothered to ask."

The same approach is changing K&B in its other biggest markets, in California, Texas, Utah, and Arizona. In Phoenix, for example, a covered porch was considered mandatory until surveys revealed that less than half the buyers cared. Fireplaces may be out in Denver, but they're hot in the San Francisco area, so they are still offered in K&B homes there. And everywhere, it seems, people prefer square footage to vaulted ceilings, and large master bedrooms to formal dining rooms.

Those preferences are showing up in new K&B designs. At the same time, K&B has started offering buyers greater choice of add-ons. Want a coffee bar in the master bedroom? That'll be an extra $150 to $300. Prefer a "loffice" -- a combination loft and office space for a computer? That could run as much as $900 extra.

Uniform, off-the-shelf houses traditionally helped builders keep a lid on costs. But K&B says its big volume -- last year it built 11,500 homes -- lets it hold down prices even while offering some custom touches. Its strategy is to price its base model aggressively, undercutting prices of similar homes in a given neighborhood.

The strategy is helping revive K&B's fortunes, after a prolonged real-estate slump in its biggest market, California. Sales in 1997 were more than double what they were in the early 1990s, when the company sold under 5,000 houses per year. And it has ambitious goals: to sell 13,500 houses in 1998 and 16,250 in 1999.

For the 1997 fiscal year ended Nov. 30, K&B earned $58.2 million on revenue of $1.89 billion, its best showing since 1989. In 1996, the company reported a net loss of $61.2 million, which included an after-tax noncash charge of $109.3 million for disposal of certain assets. The stock is trading near its year-high, closing yesterday at $26.563, up 50 cents on the New York Stock Exchange.

K&B's chief national competitors, Pulte Home Corp. and Centex Corp., have taken up market research as well. They offer buyers choices, but don't purport to do it at rock-bottom prices.

"We won't have the lowest price in the market," says a spokesman at Bloomfield, Mich.-based Pulte, the nation's largest home builder. Instead, it claims the best value for the money, such as brand-name appliances.

Kathryn Hulka, 49 years old, recently bought a four-bedroom K&B house near Scottsdale, Ariz. The computer executive says she was attracted to the $200,000 home because it wasn't loaded with "a lot of garbage that really doesn't mean a lot."

Likewise, when Kristine and Robert Fangman began looking at retirement houses, they quickly tired of the high, vaulted ceilings they saw in home after home. The ceilings "looked beautiful, but there was a lot of wasted space," says Mrs. Fangman. Plus, they "would have been impossible to paint."

The Fangmans opted for eight-foot ceilings in a $110,000 four-bedroom house in the Las Vegas area. For a few thousand more, they souped it up with custom-designed doors, upgraded appliances, enclosed bathtubs and ceiling fans. Comparable houses cost $115,000 or more, Mrs. Fangman says, even though they're in less-desirable neighborhoods.