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We just received a price from a custom home builder in the Hill Country Area to build a 3,500 sq foot home in a development where we already own the land. How should we proceed in negoiating a better price with the builder?
Best bet is to get competetive bids - but first let him know that you're going to do so. That is sometimes enough to get them to go back and "review" their pricing structure. If not, proceed w/getting the bids and then evaluate things. Having said that, bear in mind also that you've apparently already spent time selecting a specific builder - these guys often are already mindful of their pricing, and do their best to remain competetive. Being independent, a "threat" of going out for bids can backfire, because they may decide that you're going to be problematic throughout the building process and simply dig in their heels on the price given.
Look at the price given you already - what's the sq ft cost? Then compare it to what you can see elsewhere - talk to folks in the neighborhood to see if they will tell you who built theirs, what the cost was, and what their satisfaction is with the job done. While you're doing that, look closely at the quality of workmanship you can see in their home - if things are "just a little off" in terms of being square/level, etc. - you have to wonder what's wrong that you CAN'T see. Cheaper....usually is!
As said before, just bid it out to several builders. Don't get a builder on board, and then try to hammer them down on price, because you're not just getting the price down, you're losing quality and amenities.
Lots of people think builders make a huge amount on each house, but reality is, the percentages are very small. And then take into account paying staff, subs, etc. The builder is left with very little.
Don't make the mistake of trying to negotiate down more and more, because you're screwing yourself. The builder knows what they have to make to make it worth their time and effort. They're not going to keep dropping their percentage, because they'd be building your house for free. When you negotiate down, you're not negotiating down on their percentage. You're negotiating down on your amenities and quality.
my parents have had 2 homes built and another with a large addition
the first thing you need to let ALL that bid know is that you will be coming by DAILY to inspect the work, MEASURE THINGS, look over the install quality, and approve things
let them know you will be picky RIGHT UP FRONT PERIOD
The one house my parents had built was custom plans built in Hunters Creek in San Antonio......while the builder did a good job in the end they also did things like just put an upstairs wall in one room a foot further in than it was in the plans.....FOR NO REASON AT ALL other than they thought it was "better" being there......my mom simply said NOPE MOVE IT WHERE THE PLANS SAY TO.....THAT IS WHY THERE ARE PLANS
my mom also made them save trees, ROPED THEM OFF, made sure they built a bricked in sunken area around one nice oak......the builder thought it would have been so much better and easier to just tear it out
nails through the wall into a pocket door.....sub contractor thought some spackle and turd polish would be ok for the hole in the door AFTER my mom pointed out that there was a nail driven in where the pocket door was recessed into the wall.....the builder already KNEW that was not going to fly with my mom.....so a new door went in
trying to reconfigure closets and other storage spaces to be "like the spec homes" when my mom had specific plans for those areas.....nope it was redone to the plans specifications
you WILL need to show up at least every other day.....you will need to know what suppliers you can choose carpet, tile, flooring, fixtures from and what the price ranges are for the price you have been quoted......if you pick much cheaper tile than the price range......don't be scared to ask that be reduced slightly on the final price
you need to measure EVERYTHING starting right with the size of the foundation, to the rooms and on and on....I don't mean every inch, but if the foundation is 50 feet long in the front and 50 feet on the sides.....measure it when the form boards are up......remember there needs to be room for brick ect.
if you think you just turn over a set of plans to anything but the highest end builders and end up with a custom home when you show up 4 months later then my advice is save yourself the aggravation and the 2 month delay and just have a spec house plan built
if you want a custom home you need to be there DAILY if at all possible to check up and you need to let your bidders/builder know you WILL BE THERE right up front......and you expect the home to be built to plans.....with the recessed cabinets, the laundry shoot, the nook closets for towels and linens and on and on.....otherwise much of that will be ignored until it is too late so sorry
if you want a custom home you need to be there DAILY if at all possible to check up and you need to let your bidders/builder know you WILL BE THERE right up front......and you expect the home to be built to plans.....with the recessed cabinets, the laundry shoot, the nook closets for towels and linens and on and on.....otherwise much of that will be ignored until it is too late so sorry
Oh yeah. My boss at my former employer had a custom home built several years ago in a gated San Antonio subdivision. He told me he showed up one evening after the crews had left for the day to check their progress. He walked in the front door to the sound of running water coming from upstairs. He walked up the stairs into one of the bathrooms to find the tub filling with water, which was about an inch from the top! Disaster averted just in the nick of time.
On another occasion he was doing a walk through with the builder, and he commented that one wall didn't have any electrical outlets, even though the plans showed it was supposed to. The builder agreed, and went and got his hammer and knocked a hole in the wall where the plans showed the outlet was supposed to be. Bullseye! There was a box behind there with the wires in it. The builder said that happens sometimes.
my parents have had 2 homes built and another with a large addition
the first thing you need to let ALL that bid know is that you will be coming by DAILY to inspect the work, MEASURE THINGS, look over the install quality, and approve things
let them know you will be picky RIGHT UP FRONT PERIOD
The one house my parents had built was custom plans built in Hunters Creek in San Antonio......while the builder did a good job in the end they also did things like just put an upstairs wall in one room a foot further in than it was in the plans.....FOR NO REASON AT ALL other than they thought it was "better" being there......my mom simply said NOPE MOVE IT WHERE THE PLANS SAY TO.....THAT IS WHY THERE ARE PLANS
my mom also made them save trees, ROPED THEM OFF, made sure they built a bricked in sunken area around one nice oak......the builder thought it would have been so much better and easier to just tear it out
nails through the wall into a pocket door.....sub contractor thought some spackle and turd polish would be ok for the hole in the door AFTER my mom pointed out that there was a nail driven in where the pocket door was recessed into the wall.....the builder already KNEW that was not going to fly with my mom.....so a new door went in
trying to reconfigure closets and other storage spaces to be "like the spec homes" when my mom had specific plans for those areas.....nope it was redone to the plans specifications
you WILL need to show up at least every other day.....you will need to know what suppliers you can choose carpet, tile, flooring, fixtures from and what the price ranges are for the price you have been quoted......if you pick much cheaper tile than the price range......don't be scared to ask that be reduced slightly on the final price
you need to measure EVERYTHING starting right with the size of the foundation, to the rooms and on and on....I don't mean every inch, but if the foundation is 50 feet long in the front and 50 feet on the sides.....measure it when the form boards are up......remember there needs to be room for brick ect.
if you think you just turn over a set of plans to anything but the highest end builders and end up with a custom home when you show up 4 months later then my advice is save yourself the aggravation and the 2 month delay and just have a spec house plan built
if you want a custom home you need to be there DAILY if at all possible to check up and you need to let your bidders/builder know you WILL BE THERE right up front......and you expect the home to be built to plans.....with the recessed cabinets, the laundry shoot, the nook closets for towels and linens and on and on.....otherwise much of that will be ignored until it is too late so sorry
While you need to keep up on the house and it's status, it's not near that bad. Your parents didn't get a hold of a great builder is what it sounds like.
Yeah, you keep up on your investment, but you don't need to live there. Talking to your builder and knowing when to stop by before the next phase of construction is the key.
While you need to keep up on the house and it's status, it's not near that bad. Your parents didn't get a hold of a great builder is what it sounds like.
Yeah, you keep up on your investment, but you don't need to live there. Talking to your builder and knowing when to stop by before the next phase of construction is the key.
well the houses both held up, the punch out list was short and simple and people were always saying "oh I wish I had done this"
the house in Georgia my mom wanted built the way she was use to in Texas and some of the ideas in GA were different so she had to be on them too
in SA it was when they were crapping them up left and right and even though nothing in Hunters Creek looks spec the fact of the matter is pocket doors are not that commonly used even when they should be, "builders" always sub things out and subs have turn over, my mom was picking all the carpets, fixtures, tiles ect and sometimes you need to be there if a light won't fit before the subs just put it were it is easiest not where it needs to be or a different light needs to be picked
pass through fire place, room upstairs that was not finished out, but was designed to be finished out was looked at as more of an attic at first VS an actual room that had been "designed" and making sure nooks ect were left open instead of walled off like they would be in a spec built so they could be shelved in instead of just dead space
both of these houses were before CAD was so common and there were manufacturers templates for various features
builders have only gone down hill since then for the most part.....again if you want to pay top dollar for someone that makes mistakes and then eats them because they charge top dollar fine
but there are a lot of good builders that can be had for less cost if you are up front with expectations and don't let them get away with things or try and tell you well it is too late
the best things to have when you tour your under-construction house is a sturdy hammer, spray paint, and a camera
use the hammer to knock out studs that have too many knots--because they will dry and fall out--or where items have been nailed together improperly---
gets their attention--usually only have to do it once or twice
subs usually mark where elec outlets and plumbing runs are supposed to go--but spray paint gets their attention as well
and a camera to document how everything looks at the stud stage and after the sheetrock has gone in
for my two cents
it is worth it in long run to make sure you have superior insulation--that means FOAM in 2x6 framing and a foamed/enclosed attic--
not what most buiders are doing in TX--they think that a ventilated attic is best--
but if you foam the attic then all of your HVAC ducting is in insulated space and the whole house has an insulated envelope
you have to get someone who knows his business because if done wrong it adds to problems with trapping moisture which leads to mold/poor air quality but it will save on energy costs from the get-go...
even better than that is an ICF house but that is really specialized constuction--
however that can be done much more quickly for construction time--
it just has to be planned pretty thoroughly and you needto know specifically about your plumbing runs and electric--because to make changes is WAY more expensive than conventional construction=
do water catchment--as much as you can afford
better quality vinyl windows and wide eave overhand to shade windows--
orientate for passive solar and design ventilation flow with window location--including top venting if there is second story with staircase...
might think about some solar panels as well
Thanks for all the feedback. We went with Anderson Jenkins Custom Homes and are pretty happy. We hired our own inspector to make weekly visits who takes photos and provides great feedback.
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