Home Building Costs
Those of you who are headed down the pathway of custom building, be aware it can be slippery and financially dangerous. There are all sorts of briers and brambles that can slow you and your builder down as the job moves towards completion. Delays cost money, hidden upcharges, burst budgets, etc. all can contribute to a bitter building experience.
Detailed plans need to be done early in the planning stage
But wait, you can build a new home, enjoy the experience and be left with some change in your pockets. The key to having a smile on your face from the planning stage until move-in day is do your homework early in the process.
What is the biggest common denominator is building overruns?
When I perform autopsies on building experiences that have crashed and burned, the most common denominator is rush to action. All too often homeowners and builders alike want to get the job moving even though many decisions have been pushed aside. For example, who cares what kind of light fixture is going to hang next to the mirror in the bathroom? You have months to decide that, right? Wrong.
To get a firm and iron-clad grip around the true cost of your new home, you and your builder must know exactly what your house will look like when complete. But to do this, you must cooperate by making hundreds of decisions and product choices before the plans are completed.
The need to do this should be apparent in these following examples. Let's say you don't give much thought to your front door lock. A set of door hardware is a set of door hardware you think. Well, what happens if you finally decide to install a top-of-the line full-mortise lockset that costs hundreds of dollars and requires a skilled carpenter hours of labor to carefully install it? Imagine what the upcharge is going to be when you discover your builder has figured a standard tubular model that installs in less than an hour. The extra cost to you might be $400.00 or $600.00 for this one item.
How can you prevent delays in construction?
What happens when you go out to choose light fixtures five weeks before you need them? Imagine your displeasure when you are told the ones you like are special order and will be at the jobsite in ten weeks. Waiting to make decisions can significantly limit the available choices.
The other budget breaking scenario is the rough-in nightmare. If you haven't decided upon the exact light fixtures for your bathroom at the time the electrician is roughing in the wiring, the electrician mounts a box at a given location hoping it will work. When the fixture finally is installed and is either too close or too far away from the mirror, hangs too low, etc. and the box behind the finished wall surface must be moved, who do you think pays for this mistake? Yes, you do.
But the trouble is, many people are unaware of these potential financial booby traps. Many builders don't always discuss them. But rest assured there are builders who understand the problems and they will try to get you to select all things before they break ground.
How do you make sure each bid is quoting on the same items?
There is another huge advantage in making all of your selections before you put your job out to bid. If you tell all builders exactly what cabinets, countertops, wallpaper, locksets, etc. you want, then the bids coming back will be a true apples to apples comparison. House plans and specifications that contain lots of allowances (because decisions have been delayed) create bidding confusion.
How do you avoid overcharges?
The other hidden trap in bidding with allowances comes after you sign the contract. Once you finally decide upon a particular faucet, wallpaper, even simple woodwork, the builder can say that it is going to cost more to install what you picked out. He may say that he only figured installing a simple faucet, not one that is more complex. In all fairness, he may be right.
If you do have all product selections made before the bids are submitted and the builder comes back later asking for more money because something is harder to do than anticipated, you can say, "Look it says right here in the specifications this is what I wanted. You knew the job was dangerous when you took it."