How To Compare Builders
If you find yourself beginning the process of soliciting competitive bids, the following may help you get good results.
Insure That All Builders Bid “Apples to Apples"
This means that you must provide the same information to each builder so that the bid prices reflect construction of the same house. This may be obvious, but there are a number of ways that the process can fail. For example, if a brick exterior is desired, but builders assume different types of brick, then the total bid prices may vary greatly and not reflect what you want.
Use Fixed Allowance Amounts
If you do not know the specific items you wish to include in your home, you may specify allowance amounts to be used by the builders in their bids. In this way, you will fix the allowance amount at the same price for all builders, while allowing them to bid competitively on the construction of the home itself. This assures that competing builders are bidding “apples to apples”. Key allowance items should include: landscaping, brick (price/thousand), floor covering, appliances, lighting, plumbing and bath fixtures, cabinetry, and kitchen counters. You may develop a feel for the proper allowance amount by visiting local showrooms of the suppliers of these items.
The Lowest Price May Not Be The Right Price
If you receive bids on the construction of your new home, and the low bid is significantly below the next closest price, you should look very closely at the content of that lowest bid. If it is too low, there may be a reason for it. Be sure that the low bid includes everything that the other bids include. Is the builder using the lowest price sub-contractors regardless of quality? The low bidder may have accidentally left an important item out. Or, the low bid may have been the result of an error in math. In any event, if you award the job to a builder who has made a mistake, the builder may require a price increase after the job has started, or may try to cover his mistake by taking costs out of your job. You may or may not see where the costs are shaved, but the result may be a home of inferior quality. The worst result may be that the builder goes broke in the middle of constructing your home because the financial error made in the bid cannot be absorbed. In addition, if a builder is having serious financial difficulties he may under bid your home to win the job and not have the ability to complete your home.
The Human Equation
Personality bonding throughout the building process is a hidden asset that will control your satisfaction throughout the construction of your home and for many years to come. It doesn’t matter what price you pay if you’re not happy when your home is finished. The trust you develop with your builder, before, during and after construction can not only give you a beautiful new home, it can also give you a new friend for life.
WHEN IT’S RIGHT - IT’S RIGHT - AND YOU’LL KNOW