By Jon Solomon
In the Pricing section of our Custom Home Planning Guide, we chronicle the two different ways you can approach the building process. In today’s blog post I’ve shared this chapter.
Before I get to that, I want to share some “best practices” to follow before your builder meeting. By following these ideas, you’ll have a much more enjoyable experience and a better outcome.
Before You Meet
Put your ideas for your custom home into three categories:
- Needs: Those things you need to have in your home or it’s not worth the time, money and effort.
- Wants: These would be considered “Nice to have but not a deal breaker”. You should be able to get most of your wants within your budget.
- Wishes: Why not! Have some fun and write down those items and design elements you’d love to have. You may not be able to get many, but you could be surprised!
It’s important to create this document and stick to it. There will come a time when you’ll need to cut back to stay in your budget. By categorizing each item, you’ll know what not to touch and what may need to get a line item veto!
The First Meeting
You should have one goal and one goal only the first time you meet with a builder. You need to answer this question:
“Would I consider partnering with this builder to build my/our home?”
If you don’t trust the builder, get some bad vibes or they’re too much of a loose cannon – don’t be afraid to tell them “no thanks!” This is the single largest purchase you’ll ever make and you’re going to be “married” to this builder for several years via your home’s warranty period. By picky!
Custom Home Planning Guide – Chapter 16: The Building Process
3 Bids (Low Price)
This is normally the advice a parent would give you. When your parents built a home they didn’t have access to the internet, customer reviews or services like the Better Business Bureau. Obviously things are different today. Home builders, including myself, can’t hide behind our logos and “dupe” people with an advertising campaign. You’re going to have a pretty good feel of 3 different builders before you ever talk to them.
Even with all the readily available information today there are still some people (maybe you’re one of them) that want to go this route. If that’s you, here’s what you need to know.
In a bidding scenario, you visit 3 to 4 builders, find similar sized plans, make an options list and have each builder provide a bid. The goal is getting the lowest price on an “apples-to-apples comparison.” Here’s what you REALLY need to know…
- You take the responsibility for the accuracy of the plans, scope of work and specifications. Without intimate insider knowledge of the industry, this is nearly impossible to do. Only by retaining an architect and paying thousands of dollars in fees to develop a plan, detailed scope of work and specification documents can this be achieved.
- Any builder, including us, can “buy” a bid. A builder will cut corners where you’ll never notice and bring in their B and C level subcontractors to meet the bid.
- Bids are as good or bad as the contractors understanding of the plan and specifications. This is where you’ll find a lot bait and switch tactics.
- It’s the contractor who ultimately controls the quality of the products and craftsmanship through finding the cheapest products, subcontractors and installation methods.
Building your home using a low-price bidding process is the equivalent of buying a USED car based on the paint job. The question you always have on your mind is, “Am I REALLY aware of what I’m buying/getting?” Your home, just like that used car, looks shiny and barely used today, but watch out for huge repair bills in the future – or what we call a high cost of ownership.
This includes accelerated maintenance and remodeling costs for poor installation methods, cheap products and poor design. And you have to keep in mind higher monthly utility bills too.
Finally, while it may be possible to compare one bids price-per-square-foot to another, it’s impossible to make an apple to apples comparison. Home building is a service industry. You’re buying the human component of each builder. That includes the built-in expertise of the design and construction staff – something that is unique to each company and is the difference between a great experience and home and a nightmare that never ends.
Design Build (Low Cost)
The design/build process is the opposite of bidding. Together, we work off agreed upon design, specifications and installation methods. You are aware of everything – no assumptions are made. In other words, you’re in control.
- Together we verify ALL specifications and prices. We never make a choice just to meet a bid.
- Our Scope of Work is fully disclosed and you understand how installation methods affect long-term performance/maintenance.
- You have ultimate control over the price. Our focus is on a low cost of ownership (better performing design, workmanship and products due to your involvement).
- We’ll make all the decisions prior to construction which offers minimal variations from the initial to final price. Typically the price varies by less than 1% including the changes from start to finish. In other words, no surprises!
This is the process we use at Javic Homes. We want to be as transparent as possible and work collaboratively with you to design and build a home that fits your lifestyle and budget.
This is the end of this Chapter 17 in our Custom Home Planning Guide. If you’d like to receive additional chapters of the guide via email, click on the image below.
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