Q&A /

# Cost Breakdown

In other words, a tract builder KNOWS he can get drywall hung and finished for so many cents per square foot.  So all he does is quickly calculate the board count - number of sheets which can then be translated into square feet - of the house.  Did you know that a quick way to get the board count of a typical home is to multiply the square footage of the finished floor space by 3.5?  Try it and see how close it comes to an actual take-off calculation!

The point is simply that many costs can be quickly calculated by large builders.  But what do small builders do?

The Sometimes Guess.....

Small builders often have to guess at numbers.  It can take 30 to 40 hours of time to develop a really accurate number for a custom-built home.  If you want a solid estimate, the builder needs to circulate the plan to the various subcontractors and material suppliers to get firm cost figures for the job.  This is often required because the smaller builder may not get the same price protection that larger builders get from their subs and suppliers.  Costs can go up and down depending upon whose truck/boat payment is due.

Small builders may not have the time in their schedule to get accurate numbers.  They may start to guess at what things cost.  This is not a good thing as surprises can happen as the job progresses.

This happened to me once. I once lost \$6,000.00 on a job before I even started. In my haste to prepare a bid, I used a hand-held calculator. Without a tape from an adding machine or the accuracy of automatic addition provided for in a computer spreadsheet, I failed to add in the allowance figure for a large built-in bookcase. Ouch! The owner got the bookcase and I was \$6,000.00 poorer.

Swings Both Ways

You could be poorer if you don't get accurate itemized bids.  Why?  An itemized bid allows you to see if all of the cost items for the house have been listed AND if a number has been associated with each task.  Multiple quotes allow you to see if the numbers for each item are fairly close.  A close spread means the individual numbers are probably accurate.  A huge difference in numbers means someone is guessing!

How Would You Like....

Imagine if you could get an itemized Checklist for your new home project that has well over 100 different cost categories, specific questions that the builder has to answer, and much more? Imagine if you could purchase a fancy Microsoft Excel spreadsheet that used colors to show you the high and low bid number for each and every line item? I have been selling these products and people love them! You can get price breakdowns from various new home construction books and pamphlets, but I have never yet seen one that has the detail mine provides.

The newest addition is the fancy spreadsheet. This is a high powered graphic tool that lets you quickly spot where each builder is high. But keep in mind that the high number in each line item COULD be the accurate price! If the busy builders guess low and the high number is accurate, you will find out when you ask HOW the high number in each line item was arrived at. See the benefit? You can quickly identify which cost areas to quiz each builder about.

Go to the opens in a new windowChecklist section of my Online Store.

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