Q&A / 

New Home Construction Cost Breakdown

Evidently, I have become numb to the wonder of building a home. What I mean is that it is no great shakes to me to take a vacant piece of ground, dig a hole, pour some concrete, transform stacks of lumber into a frame and then complete the job with glowing lights and a fire in the hearth. Just the thought of having the ability, knowledge, and know-how to do this really excites some people I talk to. They REALLY want to build things. Maybe I have been doing it too long......

I can say that certain aspects of the process create a fantastic feeling of self satisfaction. For example, there is no feeling (a good sneeze comes close...) quite like that of cutting and fitting complex roof rafters instead of using trusses. Some jobs require this and I LOVE to do roof framing. I also enjoy installing cast iron plumbing waste lines and black iron natural gas lines. Rough plumbing is like a 3 dimensional puzzle. It is very challenging to install piping so that it looks great, functions perfectly with no leaks, and doesn't compromise the structure one bit. I'm getting excited just writing about it! No doubt about it, construction work is fulfilling!

Be Careful Out There

The home-building process is comparable to skydiving - tremendous thrills but at a great risk. This is even true for experienced builders and skydivers. Building a home is complex. There are many things that you can't completely control. Here are just a few: the weather, production of cabinets & tops, inventory of items at the local supply houses, the schedules of sub-contractors, the quality of the vast amount of materials you are expected to install.

Stop and think of how many different trades and different parts go into a house. You or the builder needs to be familiar with each one. If a mistake is made early in the job (say an out of square foundation), it will handicap the rest of the project. What about hidden mistakes? I know of a job where a builder failed to inspect the inside of a fireplace heatilator. Hidden inside was a plastic bottle. Once the fireplace was built and a fire placed in it by the homeowner, a horrible odor was generated. Guess how much trouble that was to fix! In other words you or the builder must always be on your toes.

The Project Foundation

Houses require excellent foundations. The same is true for the entire home-building process. The foundation of the process is an excellent set of plans and written specifications. Many people think that any plan is a good one. There is something magical about blueprints. Unroll any set in front of some people and they start to dream. A bad or incomplete set of plans that has little detail allows a builder to construct an incomplete job.

Great plans leave little to speculation. They include lots of detail, there are separate pages for electrical and mechanical layouts, and there are many schedules or tables that outline what is supposed to happen where.

Specifications are a must. Written specifications are just detailed notes and explanations about various aspects of the actual drawn plans. For example, there can be a paragraph about the exact nature of the mortar used for the brick. Other notes can mention the process of finishing the hardwood flooring. Think of specifications as the written instructions you find on any installation guide as you assemble a model, toy, lawn mower, or outdoor grill. The assembly instructions come with drawings AND words. Specifications are words, lots of words!

Always make sure that the drawings and specifications have a date on them. You'll see why in a moment.

Contract Documents

If you are building a home, you need a simple, clear contract. There is little need to include lots of words about what is going to be built if you already have an excellent set of blueprints and specifications. You simply need to make sure the plans and specifications are PART of the contract. You can do this easily with a simple line in the contract like this:

"Bozo the Builder agrees to construct the house for the Smiths exactly as outlined and described in the plans and specifications dated (insert plan & spec dates here) _________. There are to be NO deviations or changes made unless authorized in writing by the Smiths."

Technically, I am not allowed to practice law. I am not an attorney. So, you need to run this clause by your attorney to make sure it fits in your state. If you are going to invest $250,000 in a house (it is really more like $650,000 when you make ALL the mortgage payments...), don't you think it is worth $250 - 500 to get a solid contract from an attorney? You BET it is! Where do you get a good contract attorney? Find an attorney in your town that specializes in contracts. How do you do that? Well, you call and ASK them what is their specialty? "Hello. Mr./Ms. Attorney, I was wondering what your specialty is. Do you do lots of divorces? Defend lots of criminals? Or do you practice tax law?" See how easy it is. Don't let the attorney start asking the questions. You want to be in control of the conversation.

Once you have found two attorneys that do contracts, ask for 2 references. That is, ask for the names and phone numbers of two clients who have had construction contracts produced within the past 6 months. What? He/she can't produce those names? Keep looking! Get another attorney! Once you find one, call the homeowners and ask if the contract appears well written. You think this is hard and too much work? Then you better turn back now.......

Building your own home whether you do it yourself or use a builder is one of the toughest jobs you will ever do. It can be lots of fun and filled with excitement IF you are prepared. If you don't get ready for the experience, it will be like going down a mountain road with no brakes..... Sub-Contractors - They Make or Break the Job

Who really does the work on the job? It is the sub-contractors. These are the soldiers in the trenches. When I was still building everyday, my subs helped me do the finest work. It took me nearly 15 years to locate the best subs in Cincinnati. When I did find them, I took care of them and they did the same to me.

You can find good subs by going to the specific supply houses where builders and subs buy materials. Remember, we DON'T always go to the home centers! That is where YOU go..... In just about every town you will find specialized supply houses that sell just to plumbers, electricians, roofers, etc. In other words, the supply houses have specialized inventory - just plumbing or roofing stuff.

Go to these businesses and see if you can't talk with the general manager or owner. Tell them what you are looking for - the names of 3 top subs. Here is what you ask: What subs have been in business for over 12 years? What subs buy your top quality products on a regular basis? Which subs pay their bills on time? Which ones routinely take advantage of your 2 percent quick-pay discount? Which ones would YOU (the owner / general manager) have work on your house? In many instances they will offer up names for you.

Construction Tips - Nip Problems in the Bud

If you want a solid house with few problems, then you are going to have to work side by side with the builder. This means that you will need to do lots of reading. Many of the aspects of construction are well documented by numerous associations. In other words, if you want to know some details about concrete, why not contact the Portland Cement Association or the American Concrete Institute? I list all of the building associations on my website. There are simply too many to list here.

You might also want to read all of my past columns and builder bulletins. If you do, I guarantee you that you will have more knowledge than 98 percent of the builders out there. You can decide to read two columns and two bulletins per night. If you do this, you can get through all of them in about 3 months....... See what I mean about time..... Read them in order of construction. In other words, don't read the hardwood flooring ones first. The flooring will be one of the LAST things installed in your house.

Major Points

Your foundation MUST be square! Your footer needs to be at least 8 inches thick with 2 number 5 bars run continuous. Spend the extra money and get vertical steel in addition to the horizontal steel in your foundation.

Don't allow the house to be built too deep into the ground! I always make sure that the top of foundation is a MINIMUM of 18 inches above the highest point of soil within 10 feet of the foundation. This allows me to leave 6 inches of foundation exposed and provide 1 foot of slope away from the house within 10 feet. You use the dirt from the hole to create this slope. If done correctly, it will appear that the house is on nearly level ground.

Use cast iron pipe for your plumbing drain pipes that carry water within the walls. You will have a quiet house!

All roof flashings must be tin or copper and be soldered! 95 percent of all roof leaks happen at flashings. Make sure yours are the best and installed properly.

Watch for my upcoming book on building a new house!

100 Plus Item Cost Breakdown List

One of the biggest nightmares with new home construction is failing to identify a cost item. I once goofed up on a bid (I was in a rush), because I was using a hand held calculator with no tape instead of my own list! The mistake cost me $8,000! Ouch!

To obtain an accurate total price, you must have two things: 1. Each major and many minor items listed 2. Accurate prices for each item - not guesses or allowances! I don't list every single nut and bolt item, however, I'll bet that you will be surprised at the detail of the list. If you have a specialized job and know of an item I could include, please contact me. I have provided extra blank spaces at the end of the list in case you need to add items.

To obtain a copy of this helpful New Home Checklist, click here to view the details.

Column B211

SPONSORS / 

4 Responses to New Home Construction Cost Breakdown

  1. My husband and I would like to have our home built using ICFs. We do not have anyone locally who has experience with ICF, but have found at least one subcontractor who specializes in ICFs. We will not be doing any of the actual building ourselves but would like to work with a general contractor and hire our own subcontractors. In your article NEW HOME CONSTRUCTION COST BREAKDOWN, you had a link to a New Home Checklist. I was unable to get the site to come up. Could you please tell me how to get the checklist. Also you mentioned your upcoming book on "build a new house". I do not know the date of this article or if your book is out. If you would, please provide me with suggestions on getting a book which would walk us through the process of building a new home. I will thank you in advance.
    Sincerely,
    Lynette

  2. My brother has just completed building a home. There was never a contract involved in this job. The builder said that he doesn't work like that!! My brother was very careful to hold back money as the job progressed. Now that it is about finished, there is a major problem with the wood flooring through the home. It's wavy due to dampness issues which were not addressed. We still have money that we're holding. If we refuse to pay the remainder unless the floors are repaired, what recourse does the builder have?

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>