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Old 10-20-2008, 11:10 AM
52 posts, read 293,211 times
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I heard among all the various buiders, some are called production builders and some enhanced builders. Can you give examples as who is who?
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Old 10-20-2008, 09:50 PM
Location: Houston, Texas
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I have never heard the term "enhanced builders" but I assume you mean custom builders. Production builders refers to those like Pulte, KB, Ryland and the like who basicly take the same 4 or 5 home plans and build nothing but those homes. Sometimes the home plan is slightly modified from tract to tract but they are the same plan. These production builders do offer some options for huge additional fees but will never ever make any major modifications. These builders have what they call a "take off" which is a pretty exact materials list with almost no waste to build a specific model. They built this model so many times that they have it refined to a science as far as materials. This also helps keep the cost of the home down having little to no waste.

On any custom home the builder charges a 10% waste fee which you will never know about. It's all built in to the price quoted you.

A custom builder is just that. They will build anything your wallet allows. Even here, many custom builders have a portfolio of maybe 10 home plans and will refuse to build anything but those 10. Again... familiarity with a specific plan they built many times saves them money. They will however modify these plans to your taste for a fee.

The true custom builder will start with an Architect sitting down with you and draw a home to meet your wildest desires. Then the builder will quote you a price. You can expect to pay 3 or more times the normal price per square foot of a tract home. Most times the Architect will actually run the job actiing as a superintendent seeing the new home from the first shovel to the last nail. His fee for this is 10% of the total price you are charged by the builder. And it is well worth it. The builder agrees but rarely does the homebuyer because they balk at the cost.

Hope that helps.....
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Old 10-22-2008, 09:10 AM
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Actually custom builders usually make less than 10% profit on a home, usually about 5-7% which is usually a lower profit margin than even the production or tract builders. The higher costs are because 1. they don't bring as much business to suppliers to their prices are a little higher 2. they use higher quality materials and subs, and 3. the houses are usually a lot harder and more expensive to build anyways.

In most parts of Houston you are paying only about 20-40% more per square foot, nowhere near 300%.

We built with a custom builder. We worked with the architect to design a custom home, selected the lot we wanted, and ended up paying about $100/sq ft for a fully custom home with all the trim work, stone work, etc. that it entails. Our neigborhood has a tract home section that they have similarly sized homes selling for about $90/sq ft, so while more expensive, we felt the slight premium was worth it. Of course, there are some homes that are $140/sq ft in our section, but then again, not a 300% premium. They of course are more expensive, not because the builder is making a killing, but if you just walk them you can tell why it costs $140/sq ft. Wood floors everywhere, Viking appliances, Granite in every bathroom, marble in the bathrooms, media rooms already built out, outdoor kitchens, 2 full bedrooms down, domes and arches in the ceilings, high end paint and textures, stained wood study, wood stepped stairs, wrought iron stair bannisters, pattern marble backsplashes, huge crown moulding, large base, built ins everywhere, etc. Heck, the trim carpentry bills on these houses must be $40K by themselves.

I think it all comes down to the fact that you get what you pay for in most cases.
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