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Old 06-19-2008, 08:21 AM
 
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My DH and I are currently looking for a builder. We live in Elmhurst. When we look at homes being built in the far west suburbs they are much less expensive and seem to be just as well built as the home being built further east. While we realize the land is cheaper it does still seem these homes are quite a bit lower in cost. We can't seem to figure out why. Also do any of you think that some of these builders that are building in the newer subdivisions would be interested in building a home for us outside a subdivision? We were thinking if they were a larger company that perhaps they would get better discounts from their subcontractors and with housing slowing down (although sometimes it doesn't seem like it in most of these suburbs) they might want to keep their subs working. Any thoughts?
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Old 06-19-2008, 08:36 AM
 
Location: Portland OR
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Price is due to demand more so than "cost" to build. This is the free market at work.
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Old 06-19-2008, 09:34 AM
 
Location: Sugar Grove, IL
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many subdivisions in the far western suburbs are builder/developer subdivisions. that means that they are typically the exclusive builder in that subdivision. There are custom home builders out there that can build on your land, or may have lots available in more exclusive subdivisions. There is an excellent, and award-winning custom home builder in Sugar Grove..Ed Saloga Builders. They are currently working on Hannaford Farms in Sugar Grove and I know they also have lots in other areas. Also, Bill Thill Builders, McCue Builders(they do a lot in oswego and yorkville). that is just to name a few that I have seen around here!
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Old 06-19-2008, 10:45 AM
 
Location: Chicago's burbs
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I doubt that a tract builder would build a home on your own lot outside their subdivsion, but a custom builder would. What areas of the western suburbs are you looking?
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Old 06-19-2008, 11:32 AM
 
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There are a whole range things, some small, some significant, that enable a "volume builder" to deliver homes at a lower price point than any one off builder.

The biggest thing is that when it comes to basic material, from lumber and roofing to drywall to flooring and windows the price a volume builder pays is quite a bit lower. Some of this is related to quality (especially for things like roofing and windows), some to transportation (it is easier to sell train loads of lumber & drywall at a fixed priced than pick-up truckfulls), and some to better cost estimation /blueprint optimization(a one off builder doesn't learn the shortcuts the way a crew for a volume builder gets faster and builder with every time they build a "Covington II" or "Regent IV"...).

The another big factor is a volume builder can generally "book" his subcontractors with a lot more precision than a one off. It starts with excavation -- the volume builder can have a company dig out several foundations very quickly, set the forms, pour the concrete and move in an assembly line fashion. The one off builder has to have the excavation company truck in the smaller dozers, more slowly digging the foundation. Truck in forms. Pay a surcharge for smaller loads of concrete -- It is grows in expense as the one off has to schedule plumbers, HVAC, electricians, tile setters, finish carpenters for little projects only to find out they are not able to put a full day because of conflicts with other trades/delays. Labor costs soar when the trades are bumping against one another. For volume builders they can lock in guys for X houses at X dollars and the schedule problems generally end up costing the subcontractors money. Don't forget either that when a volume builder is using labor way out on the fringe these guys will NOT have to drive long distances and generally take a lower wage than guys that may be driving a LONG way AND have to give themselves a lot more cushion that each job may be shorter than hoped with longer gaps between work than a volume builder.

Smaller things are the quality of every material. From lighting to switches to plumbing and trim the one off builder is paying very close to the prices that any Joe can get at Home Depot, maybe higher. If you want nicer stuff the one off builder is going to pay a pretty large premium for that and pass it on to the buyer. The volume builder is going to be paying a price as low or lower than the WHOLESALE of a Menard and most likely will NOT deal with premium stuff as it messes up their ability to schedule things tightly and rely on the large suppliers.

Another smaller thing that is harder to quantify is the basic overhead it takes to be a one off builder full time is harder to spread out than the overhead of a volume builder. The reason it is harder to quantify is that as a builder throws up more houses some of their overhead DOES increase, but more than a bit is fixed. The one-off builder and the volume guy BOTH have to pay themselves and plan for seasonal slow downs. They both need a vehicle and phones and email. The volume builder probably needs a showroom and some staff that the one off guy does not. The volume guy might have the resources the secure VERY large tracts of land at a VERY LOW cost per sq ft, where as the one off guy is basically paying what you would for one lot at a time. Volume builders can and do mark up the land A LOT, even more so when it is way out in the fringes. That mark up (and maybe even some side deals to developers of retail space or commercial property) can go a LONG way to covering ALL the overhead of the volume builder. The one off guy is not making anywhere near that kind of cash even when they build a spec house and quickly profit from it. With so many houses sitting in inventory the economics change dramatically.

As to your second question, hiring a volume builder to do something in an existing neighborhood, several things to think about before inquiring. The most obvious is what sorts of buildings are they constructing -- even a custom builder who is used to working with 3500 sq ft houses that are on lots 150 x 150 is going to freak when he thinks about trying to work with something maybe a third that size. Lets say you have plans from some designer already. If the builder agrees to use those then he is facing a whole different set of rules once that builder leaves the confines of "his" development. They face a lot more scrutiny. The plans need to reviewed by the picky Building Dept of an established community. Permits may require the City Council to sign off on variations. The laborers have to abide by regulations as to when they can work, where they can park, how they can store materials and host of other things that make the job slower and more expensive.

I know quite a few builders active in Elmhurst and other more established suburbs, I even know some builders active in the Fox Valley region. They run different businesses than the large volume builders though I can say that I really doubt there is more than 5% or so to be saved by even talking to them. The 20% or so less that a volume builder can charge is really a function of all the things that they can do when building out ONE large subdivision.

When you add up all the differences it is easier understand a 20% or more difference in the cost per sq ft between a one off and volume builder. There are very real costs associated with building few homes, more slowly, in a more developed area.
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Old 06-19-2008, 04:18 PM
 
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Thanks so much for that very detailed reply! So much to consider.
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Old 06-21-2008, 10:21 PM
 
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I think some good builders are Rite-Way Custom Homes, who is building my friends home in Wheaton, and maybe R. Whalen. They do custom builds in the western suburbs. Homes in the western suburbs are priced lower because of the cost-to-build it is much cheaper to build there than on the North Shore. The North Shore is at least $180 per square foot above grade for a builder maybe $220 for a private party. In the western suburbs it can be around $100 to $120 usually.
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Old 06-23-2008, 04:14 PM
 
Location: Roselle, IL
223 posts, read 719,315 times
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Quote:
Originally Posted by sgresident View Post
many subdivisions in the far western suburbs are builder/developer subdivisions. that means that they are typically the exclusive builder in that subdivision. There are custom home builders out there that can build on your land, or may have lots available in more exclusive subdivisions. There is an excellent, and award-winning custom home builder in Sugar Grove..Ed Saloga Builders. They are currently working on Hannaford Farms in Sugar Grove and I know they also have lots in other areas. Also, Bill Thill Builders, McCue Builders(they do a lot in oswego and yorkville). that is just to name a few that I have seen around here!
My wife and I are also planning on building in the far western suburbs (We have a lot in Geneva).

I looked at the websites for those builders that you mentioned, and if they build houses like they build websites, Ed Saloga definitely stands out .

Does anybody has any personal experience with this builder that you would like to share? (How expensive, quality, etc..)

We are guesstimating/budgeting 250k (275k tops) for a 2500 sq ft house. Is this realistic for a custom home in Geneva?

Edit/Clarification: Our 250-275K budget does not include lot price

Last edited by vandre; 06-23-2008 at 04:32 PM..
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Old 06-23-2008, 04:20 PM
 
Location: Phoenix metro
20,004 posts, read 74,235,339 times
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Quote:
Originally Posted by vandre View Post
We are guesstimating/budgeting 250k (275k tops) for a 2500 sq ft house. Is this realistic for a custom home in Geneva?
Signs point to "NO", but I could be mistaken.
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Old 06-23-2008, 04:31 PM
 
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All depends on your definition of "custom" but $100 a sq ft is an AWFULLY tight budget in northern Illinois. Realistically if you want the stuff that most people seem to -- hardwood floors, porcelain tile, cedar siding/brick, upscale kitchens -- that is hard to do for less than $200 sq. ft.. Deluxe roofing, high end fixtures and appliances push that to $300.

Materials drive a lot of that, but labor too -- any yutz can click together laminate flooring, it takes somebody will skill to tile up the niches in a luxury bath so the grout lines up across four surfaces...
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