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Construction Articles

Home Plans and Design for Custom Homebuilding

HOME PLANS and DESIGN

 Home Plans & Design

The right home plan coupled with great design allows you to build the home you always wanted while helping you control costs.

  • Home plan designers – The Good and The Bad
  • Different costs for different types of home plans
  • Cost-effective home plans

Home Plan Designers

With financing and a budget, it’s time to talk about who designs homes and how they are designed. There are five main categories of home plan designers.

Architects

When people think of custom homes, often the first thing they think of is residential architects who design home plans for their clients. Leading residential architects design and draft beautiful home designs. In producing these stunning designs, working with an architect can present several challenges. First, an architect is hired by and works for the home buyer. The architect’s only priority is (or should be) to satisfy the desires and dreams of their client. The challenge is that their work product is not tied directly to the project budget. This often creates a final project cost (as bid on by a homebuilder) that exceeds the client’s budget — often by tens or even hundreds of thousands of dollars. Another challenge is that the design often uses expensive and non-production construction methodologies that can drive up the home price even more. Finally, architects are not cheap. Typically, fees range from 8% to 15% of the project cost. For a $500,000 home, for example, architecture costs could run from $40,000 to $75,000. (This is part of the reason custom homes tend to be 20% to 30% more expensive than comparable spec homes.)

Online Home Plans

 The second category of home designers is the online home plans sold just about everywhere. There are numerous issues with these plans. The primary issue is that online home plans are designed for a general audience and any changes and modifications can be costly. Every region has different building codes, and online plans do not address this. Most online home plans will need to be redrafted by a local draftsperson to adhere to local building codes and requirements. Any money you might have saved by buying a plan online will be spent to redraft the plan for your specific location. Save your money: Do not buy online home plans.

Local Drafters

The third category of home designers is the local draftsperson. Often, they will have a plan book of stock home plans that have been designed for the local market. The good news is that a local draftsperson knows the local codes, is available, and is often cost-effective. The challenge can be the design element (stock plans that may be years old), and there is no direct relationship to final pricing. As with architects and online home plans, pricing is handled by the homebuilder, and budgets can be overwhelmed quickly.

Homebuilder Home Plans

Local homebuilders will often provide their standard home plans to clients in return for the construction of the home. This fourth category can be effective because the homebuilder provides a fixed price. The downside is that any kind of customization is difficult and expensive to make, if allowed at all. Often, these home plans have been built many times in the region, so your new home would not be unique.

Design/Build Home Plans

The last category of home designers is the true design/build homebuilder. While fairly rare in new construction due to the experience, design staff, and technology required, the design/build process can be very rewarding. The key element is that the design is directly linked to the final cost. Directly linking design and cost is the responsibility of the design/build homebuilder, which produces a project that is within budget. If the budget is not met, the homebuilder doesn’t build the home. One thing to keep in mind is that the design / build homebuilder will control project square footage and construction products to meet the budget. Good communication between the home buyer and the builder is essential for a successfully design/build program.

NewHomes.House is a true design/build firm. With hundreds of homes designed and built for clients over the last 30 years, we know how to design beautiful homes and keep costs low.

Types of Home Plans and Their Costs

Home buyers often ask about square-footage cost to understand total project cost. Unfortunately, you can only compare the same type of home with similar home types and products to make an accurate determination of value.

Types of home plans are categorized as follows (no basements):

  • Single-story homes(often called “ranchers”)
  • Two-story homes
  • Two-story homes with a main-floor master bedroom

The best way to understand this is with an example. Consider a 2,000 square-foot home.

The most expensive part of a home is the foundation. In our example, a single-story home would have a 2,000 square-foot foundation. A 2,000 square-foot two-story home would have a 1,000 square-foot foundation (assuming 1,000 square feet per floor). The same would be true for the roof system. The single-story foundation and roof would cost twice as much as the foundation and roof for the two-story.

A two-story home with a main-floor master bedroom is the most expensive type of home plan. Why? Because a main-floor master bedroom requires a main floor that is the same size as a single-story (for the master bedroom and any secondary bedrooms), and you are adding a second floor.

With proper design, there are ways to minimize costs by utilizing certain elements of a plan for additional finished square footage. For example, smaller single-story home plans with a lower-level walkout basement are a popular design to maximize square footage and minimize costs. For two-story homes, utilizing space over the garage is a great way to add additional space inexpensively. And both designs increase resale value if you ever decide to sell.

Cost-Effective Home Plans

Cost-effective home plans efficiently utilize all available space and minimize the foundation and roof systems. While your budget might be more flexible, it’s helpful to understand the costs associated with different types of floor plans.

The main design criteria for cost-effective plans include:

  • A small foundation
  • Living space above all the foundation components (including garage space)
  • Building up or down (basements and/or walkout basements) to minimize the size of the foundation
  • Minimizing interior space where you don’t spend much time, such as grand foyers, dining rooms, and long hallways
  • Utilizing great design by bringing the exterior view inside to provide a larger living experience

The following types of home plans are ranked lowest-cost to highest-cost:

  • California split-level
  • Three-story (or four-story)
  • Two-story
  • Single-story
  • Two-story with a main-floor master bedroom

Great home design does not have to be expensive. The best way to stay within budget is for one firm — a design/build homebuilder — to design and build your custom home. Otherwise, the home design can quickly exceed the budget because our dreams and desires are limitless, but our budget is not.

We Are Here To Help

At CDAhomeplans.com, we believe in providing our home buyers with as much information as possible so they can make the right decisions for their custom home.

Please contact us to schedule a call so we can answer all your questions — it’s free, and there is no obligation. We love to talk construction!

Call or text us at (509) 289-5305.

Todd J. Sullivan and his dog Loki in Coeur d Alene, ID

Todd J. Sullivan and dog, Loki in beautiful Coeur d’Alene, Idaho

Specifications and Selections for Homebuilding

SPECIFICATIONS AND SELECTIONS Specifications & Selections  How is your house built? What types of materials are used? How are those materials installed? What decisions do you make as the home buyer? What decisions does the home builder make? These are all...

Home Plans and Design for Custom Homebuilding

Home plans and design for custom construction How To guide with CDAhomeplans.com

Construction Process for Custom Homebuilding

The construction process can be hectic and chaotic. Lean about custom homebuilding and the process of building with cdahomeplans.com

Construction Financing for Custom Homes

Learn about financing your custom home with a variety of different loan programs for home design and custom homebuilding with CDAhomeplans.com

Construction Contracts for Custom Homebuilding

Construction contracts are critical to custom homebuilding. Learn about the components of the custom construction contract with CDAhomeplans.com

Change Orders for Custom Homebuilding

The Good, the Bad, and the Ugly in Custom Homebuilding Change Orders.
(208) 298-5305 TEXT me direct for Custom Construction with Sullivan Homes PNW
Categories
Construction Articles

Construction Process for Custom Homebuilding

The CONSTRUCTION PROCESS

Nature of the Construction Process

 For an outsider, the construction process can seem chaotic, hectic, and uncertain. Some activities go fast, and some drag out. The physical dimensions of the home appear to change. The foundation might appear smaller than envisioned, the framing might create larger spaces than anticipated, and then the sheetrock seems to shrink everything again.

 Some days, multiple crews will be onsite. Parking might be difficult, and garbage and construction debris pile up. On other days, no one is there.

 It often seems like there is little rhyme or reason to the construction process, and chaos rules. Home builders are masters of taming chaos. It’s what we do.

 Without excellent management systems, tools, and experience, it is easy for the process to overwhelm a home builder, especially if they have multiple projects going on at the same time.

 Subcontractor Management

 The vast majority of home builders rely on subcontractors to do the work. The subcontractors are separate entities, normally comprised of a small crew. Subcontractors can be foundation crews, plumbing crews, framing crews, and crews for roofing, sheetrock, painting, trim work, and finish work. The reason for independent subcontractors is that it is not economically feasible for a home builder to employ such a large labor force with the disparate skills required to build a home.

 There are advantages and disadvantages to subcontractor crews. The advantages are scalability, access to quality work crews, and the ability to build in different locations and on different projects. The downside of subcontracting the work is scheduling. Most subcontractor crews need to be scheduled well in advance of their scheduled activity. They also work for different home builders. If one subcontractor does not finish in their allocated time, the next subcontractor might not be able to start work on time and will go to another job for another home builder. This creates a chain reaction with the schedule.

 (This is another reason to avoid change orders! A change order stops the construction schedule, and it might take several weeks before the next scheduled subcontractor starts work.)

 That’s why some days there might be several crews onsite, and other days, none. The home builder understands this and provides a buffer in their construction contract for such delays and issues. A 6-month project with daily activity will typically extend another month due to the nature of the labor force. Add other potential delays for product delivery, weather, inspections, etc., and a 9-month contract to build is common.

 Components of a Construction Schedule

 Although home builders use many different scheduling systems to schedule the hundreds of individual activities, most schedules are broken down to the following general categories.

  • Permitting: Depending on the jurisdiction, permitting can take several weeks to several months. The average time for permitting is an important question to ask, because the home builder’s schedule does not start until after the building permits are released. Remember, the clock starts ticking on your construction loan as soon the loan closes — not at the start of construction. A 9-month construction contract should have a 1-year loan-maturity date to protect the home buyer.
  • Excavation and Foundation: The home builder will lay out the foundation and elevations. This is a critical component for the home buyer to approve. Once the foundation is excavated, it is very difficult to change. If there is a basement, the drain lines will be placed prior to the basement slab being poured.
  • Framing: Floor systems, exterior walls, and interior walls are framed. Toward the end of the framing job, trusses are delivered and installed, along with windows. Roof systems are then installed to secure the building frame against the weather.
  • Rough-In: Installation of the plumbing, HVAC systems, and finally, electrical rough. It is important for the home buyer to physically inspect the location of the HVAC and electrical outlets and future fixtures prior to sheetrock being installed. It is a good idea to document completely all systems with photographs prior to installing the sheetrock.
  • Sheetrock, tape, and texture completed.
  • Interior/exterior painting competed.
  • Hard-surface flooring, cabinets and doors, base, and case installed.
  • Tile and other hard-wall surfaces (showers, etc.) installed.
  • Soft goods and appliances installed.
  • Final plumbing, HVAC, and electrical fixtures installed.
  • Final cleaning and home builder correction list completed.
  • Final walk-through by home buyer and home builder.
  • Final “punch list” completed.

Move in!

We Are Here To Help

At CDAhomeplans.com, we believe in providing our home buyers with as much information as possible so they can make the right decisions for their custom home.

Please contact us to schedule a call so we can answer all your questions — it’s free, and there is no obligation. We love to talk construction!

 Call or text us at (509) 289-5305.

Todd J. Sullivan and his dog Loki in Coeur d Alene, ID

Todd J. Sullivan and dog, Loki in beautiful Coeur d’Alene, Idaho

Specifications and Selections for Homebuilding

SPECIFICATIONS AND SELECTIONS Specifications & Selections  How is your house built? What types of materials are used? How are those materials installed? What decisions do you make as the home buyer? What decisions does the home builder make? These are all...

Home Plans and Design for Custom Homebuilding

Home plans and design for custom construction How To guide with CDAhomeplans.com

Construction Process for Custom Homebuilding

The construction process can be hectic and chaotic. Lean about custom homebuilding and the process of building with cdahomeplans.com

Construction Financing for Custom Homes

Learn about financing your custom home with a variety of different loan programs for home design and custom homebuilding with CDAhomeplans.com

Construction Contracts for Custom Homebuilding

Construction contracts are critical to custom homebuilding. Learn about the components of the custom construction contract with CDAhomeplans.com

Change Orders for Custom Homebuilding

The Good, the Bad, and the Ugly in Custom Homebuilding Change Orders.
(208) 298-5305 TEXT me direct for Custom Construction with Sullivan Homes PNW

Categories
Construction Articles

Construction Financing for Custom Homes

CONSTRUCTION FINANCING

CONSTRUCTION FINANCING

 Ideally, financing your custom home is first step you take in the custom homebuilding process because it establishes your budget and helps you prioritize the “must-haves” vs. the “nice-to-haves” for your new home. There are 3 ways to finance your custom home:

  • Cash
  • Buyer-Financed Construction Loan
  • Builder-Financed Construction Loan

 Cash

 The old adage “cash is king” is not necessarily true in custom homebuilding. While cash is great to have, it does not protect the home buyer and home builder the same way that a buyer-financed or builder-financed project does.

 All parties to a construction contract should make an initial determination that answers this question:

 What happens if the other party becomes incapacitated, or unable to perform, for any reason?

 For a home builder, the loss of revenue during a construction project can have devastating effects.

 For the home buyer, the questions that need to be answered include:

 How is the cash disbursed each month to the home builder?

  • How are monthly progress inspections made?
  • How can I guarantee there are no outstanding liens?
  • What happens if the cash runs out?

 If it is a cash transaction, home builders will often require a third party to handle inspections and disbursements. Typically, a law firm will handle the transaction, and a required amount of cash must be in the construction account for disbursement every month. “Cash in fund” is typically two (2) months of construction activity. Every month when there is a draw against the fund, that amount must be replenished within 5 working days. This ensures that:

 There is always cash in the fund to pay the home builder.

  • The money is disbursed only after a third-party inspection.
  • If there are issues during construction, a third party can assist in solving them.

 Buyer-Financed Construction Loan

 Buyer-financed construction projects are the most popular type of financing. Often called “construction loans” or “custom home loans”, the key element is that the home buyer — rather than the home builder — takes out the loan. 

 Key Elements

  • The contract is a personal-services contact between the home buyer and the home builder to build the home.
  • It is not a real-estate transaction.
  • Each month, the buyer-financed loan pays the home builder only for the work that was completed and inspected by a qualified, third-party inspector.
  • Home buyers typically save significant amounts of money when they finance construction of their home. (When the home builder finances construction, the financing costs are added to the total project cost, and the home buyer ends up paying more as there are two loans vs. just one loan when the project is buyer-financed.)
  • An average savings between a buyer-financed project and a project financed by the home builder can vary between 2% to 4% of the total cost.
  • Many buyer-financed loans provide an initial “soft draw” that is used by the home builder to pay initial costs such as engineering, blueprints, permits, mitigation fees, and any commissions or franchise fees.
  • If any issues do happen to arise during construction, the bank can act as a third party to resolve the issue, and the home builder’s concern about timely payment is mitigated.

 Builder-Financed Construction Loan

 Builder-financed projects are real-estate transactions because the home builder owns the land and construction until the project is completed. Many home builders prefer a builder-financed project because it allows them to control the entire process from start to finish. If there is an issue, the home builder is in control. 

 Key Elements

  • It is a real-estate transaction.
  • The home builder controls the construction project because they are financing it.
  • The home buyer is limited to making minor changes (if any) to the home. (The home builder assumes that if their client does not purchase of the home once it is completed, the home builder will have to resell the home.)
  • The home builder’s cost to finance the project is added to the total cost of the project — and it often exceeds 4% of the contract price. (For a $500,000 home, for example, this means an additional $20,000 is added to the cost of the home.)
  • The home buyer’s mortgage to pay for the home is an additional cost for the home buyer.

We Are Here To Help

At CDAhomeplans.com, we believe in providing our home buyers with as much information as possible so they can make the right decisions for their custom home.

Please contact us to schedule a call so we can answer all your questions — it’s free, and there is no obligation. We love to talk construction!

 Call or text us at (509) 289-5305.

Todd J. Sullivan and his dog Loki in Coeur d Alene, ID

Todd J. Sullivan and dog, Loki in beautiful Coeur d’Alene, Idaho

Specifications and Selections for Homebuilding

SPECIFICATIONS AND SELECTIONS Specifications & Selections  How is your house built? What types of materials are used? How are those materials installed? What decisions do you make as the home buyer? What decisions does the home builder make? These are all...

Home Plans and Design for Custom Homebuilding

Home plans and design for custom construction How To guide with CDAhomeplans.com

Construction Process for Custom Homebuilding

The construction process can be hectic and chaotic. Lean about custom homebuilding and the process of building with cdahomeplans.com

Construction Financing for Custom Homes

Learn about financing your custom home with a variety of different loan programs for home design and custom homebuilding with CDAhomeplans.com

Construction Contracts for Custom Homebuilding

Construction contracts are critical to custom homebuilding. Learn about the components of the custom construction contract with CDAhomeplans.com

Change Orders for Custom Homebuilding

The Good, the Bad, and the Ugly in Custom Homebuilding Change Orders.
(208) 298-5305 TEXT me direct for Custom Construction with Sullivan Homes PNW

Categories
Construction Articles

Construction Contracts for Custom Homebuilding

CONSTRUCTION CONTRACTS

 CONSTRUCTION CONTRACTS

It’s the heart of the matter. The controlling document if things go wrong. The most important document in your relationship with your home builder

Nature of the Construction Contract

A construction contract is not a real-estate transaction. It is a personal-services contract between the home builder and the home buyer for services to be rendered.

This creates interesting differences between a typical real-estate contract that many home buyers are aware of and a construction contract.

Differences Between Real-Estate Contracts and Construction Contracts

  • Construction contracts are not recorded like real-estate transactions are.
  • As a non-recorded contract, the actual amount of the construction contract is private and not recorded in any county record.
  • Because there is no record of the value of a custom-home contract, the value is not available for appraisal purposes. This can become an issue, because custom homes are often more valuable than similar production (tract) homes, and appraisers can only access new homes that are real-estate transactions (builder-financed) for valuation purposes.
  • A savvy custom home builder has recent transactions they can provide to appraisers for valuation purposes. Failure to provide such information may result in a low appraisal and project failure.
  • Construction contracts have a specific duration.
  • Typical construction contracts range from 9 months to 2 years, depending on the project’s complexity and the home builder’s schedule.
  • For typical construction contracts, the clock starts ticking when the building permits are issued.
  • If water availability (from a well) and septic engineering must be completed prior to submitting a building permit, this can add significant delays to the start of the project.
  • If there is a delay due to pre-permitting requirements, the construction loan will start to run at the signing of the loan documents. This can create a situation where the home builder is within their contractual time limits, but the loan expires prior to project completion, and the home buyer is forced to renegotiate the loan. This results in an additional expense for the home buyer. If the construction contract is for 9 months, it is good practice for the construction loan to be for 1 year.

 Components of a Construction Contract

Although every construction contract is as different as the home builder creating it, most contracts will include the following items:

  • Recitals: Who the parties are, addresses, and the intent of the contract.
  • Contract Price: The actual contract amount which should include the taxable amount. (Taxable amounts are often broken out for the client to understand how much tax is paid.)
  • Home Builder Services: A recital that includes the complete construction of the home, what is included, and what is excluded
  • Home Buyer Responsibilities: A recital that includes the responsibility for the home buyer to make timely payments to the home builder if the lender fails in their responsibilities.
    • This clause can be an issue if the lender is not timely with their inspection and payment processes and systems.
    • Typically, the home builder submits a draw sheet for approval by the home buyer for the prior month’s work completed and then submits the signed draw request to the lender. The lender then orders an inspection, and once completed, finalizes the amount requested and approved for payment to the home builder.
    • The home builder typically submits the draw sheet at the end of the month and makes all payments to their subcontractors and vendors by the following 10thof the month.
    • If the lender is not timely in paying the home builder, most construction contracts require the home buyer to make the draw payment to the home builder after X days. The home builder is not in contractwith the lender but is at the lender’s mercy for prompt payment.
  • Allowances: The construction contract should state the key allowance categories and their respective amounts.
  • Home Builder Disclaimers: Include items that, if they occur, the home builder is not responsible for them. Common disclaimers include excavation of rock, encountering water, strikes, “acts of god”, weather-related issues, and material shortages.
  • Warranty Section: Information about how the home builder warranty works and how the product and installation warranties work.
  • Boilerplate: The legal components that make the contract viable, including jurisdiction, mediation requirements, etc.

A good construction contract is designed to define, explain, and mitigate issues that might arise during the course of construction. In case of either party’s failure, the contract provides a legal framework for the resolution of those issues.

We Are Here To Help

At CDAhomeplans.com, we believe in providing our home buyers with as much information as possible so they can make the right decisions for their custom home.

Please contact us to schedule a call so we can answer all your questions — it’s free, and there is no obligation. We love to talk construction!

Call or text us at (509) 289-5305.

We Are Here To Help

At CDAhomeplans.com, we believe in providing our home buyers with as much information as possible so they can make the right decisions for their custom home.

Please contact us to schedule a call so we can answer all your questions — it’s free, and there is no obligation. We love to talk construction!

Call or text us at (509) 289-5305.

Todd J. Sullivan and his dog Loki in Coeur d Alene, ID

Todd J. Sullivan and dog, Loki in beautiful Coeur d’Alene, Idaho

Specifications and Selections for Homebuilding

SPECIFICATIONS AND SELECTIONS Specifications & Selections  How is your house built? What types of materials are used? How are those materials installed? What decisions do you make as the home buyer? What decisions does the home builder make? These are all...

Home Plans and Design for Custom Homebuilding

Home plans and design for custom construction How To guide with CDAhomeplans.com

Construction Process for Custom Homebuilding

The construction process can be hectic and chaotic. Lean about custom homebuilding and the process of building with cdahomeplans.com

Construction Financing for Custom Homes

Learn about financing your custom home with a variety of different loan programs for home design and custom homebuilding with CDAhomeplans.com

Construction Contracts for Custom Homebuilding

Construction contracts are critical to custom homebuilding. Learn about the components of the custom construction contract with CDAhomeplans.com

Change Orders for Custom Homebuilding

The Good, the Bad, and the Ugly in Custom Homebuilding Change Orders.
(208) 298-5305 TEXT me direct for Custom Construction with Sullivan Homes PNW

Categories
Construction Articles

Change Orders for Custom Homebuilding

CHANGE ORDERS

CHANGE ORDERS

Change orders are an important tool for a home buyer during the course of construction. It is important to understand exactly what a change order is, how to control change orders, and how to ensure your home builder is not using change orders as a significant profit center.

To Change the Past

A change order is a written directive to the home builder to make a change to the project which will affect scheduling, cost and material, or activity that has already occurred or has been scheduled and material ordered. For example, windows are installed in the framing of a home and the home buyers decide that the family room windows need to be larger.

A change order should not be for a future change.

Often, a change order will consist of the cost of the change, including home builder profit, and a penalty. The penalty can range from small (~$250) to large amounts, depending on the home builder and their change-order policies. Be sure to ask your home builder how much the change order fee is before signing the contract.

To Change the Future

Changing a selection is not a change order. Changing a selection is making a change to something selected for the future. For example, your custom home’s plumbing fixtures were initially selected as Moen Chateau in chrome. Prior to ordering the valve assemblies (at the start of framing of the home), you want to change the plumbing fixture to Moen Eva brushed nickel finish. This change in selection should not be a change order because it is for a future (selection) change. Consequently, there should not be a penalty for making such a future change.

There is often confusion about change orders because many home builders will use the term “change order” to indicate a change in selections. The way to determine if it is a change of selection or a change order is whether there is a penalty fee associated with the change.

THE GOOD, THE BAD, and THE UGLY Change Order

Home Builders

Home builders are a diverse group of entrepreneurs. Most homes are built by home builders with fewer than 5 employees. Knowing what type of home builder you have selected will make your custom home experience wonderful — or a nightmare. By understanding your home builder’s policies regarding change orders, you will have valuable insight on your relationship with your home builder. The information below is subjective, but with 30+ years of homebuilding experience, we have an exceptionally good understanding of our industry.

Of all the information we are providing in our blogs, this might be the single most important bit of insight for a home buyer to understand when selecting a home builder.

The Good

The good home builder is transparent with all information and actions. Although no home builder shares their actual cost to build your home with a fixed-price contract, most margins are similar for a region.

The goal with a good home builder is to build a quality home for their client and minimize conflict and issues. Full disclosure on all specifications and selections, contracts, scheduling systems, change orders, and what a client can do (and, just as importantly not do) during the construction process is important. Everything is in writing or available from online systems that can easily be reviewed and verified.

A home builder’s specifications and selection documentation should be extensive and presented clearly and concisely. Change of selections and change orders are straightforward and easy to understand.

A good home builder’s business philosophy regarding change orders is that a change order is used when something has gone wrong and needs to be corrected. It is not used as a tool to make more money or punish the client. Common change orders include moving a framed wall, enlarging windows, changing door locations, etc. These types of changes are initiated by the client who simply did not understand the blueprints or wants to change an item in the home.

A typical change order will result in stopping certain work on the project to change the requested item. This can have many consequences, because once work is stopped, it needs to be rescheduled, and subcontractors are often scheduled for several weeks with other projects before they can return to the job.

The goal of a good home builder is to minimize change orders, not create change orders for additional revenue.

The Bad

The bad home builder will often use change orders to fix construction mistakes that originated from poor information, lack of communication, or hectic and confused scheduling. Instead of taking the blame and fixing the issue (which can be an expensive proposition), the bad home builder will place the blame on the client and try to recoup the cost by enforcing a change order. This creates conflict in the construction process.

Often, it is difficult to determine if your home builder operates this way prior to the start of construction. We strongly recommend that, before hiring a home builder, review that builder’s documentation, selection system, scheduling system, etc. If the processes and systems are poorly documented and confusing, you might have future issues.

To make choosing a home builder even more challenging, there are great custom home builders who only build several projects a year and are onsite and hands-on throughout the project. They might not have great documentation or systems, but they are excellent home builders that care deeply for their clients.

The Ugly

The ugly home builder is easy to spot. They bid low on projects and make up the “lost” revenue in change orders and extras. There are a lot of home builders who operate this way. The typical relationship between the ugly home builder and their client is one of stress and conflict.

It is important to understand that most home builders pay similar rates for material and labor. Profit margins are standardized in the industry. If you receive a low-price bid relative to the other bids, do your research and look very closely at the home builder. Once you sign the construction contract, it is too late to back out without significant penalties and legal action. Nothing in this world is free. You really do get what you pay for when you build a custom home.

Another red flag for the ugly home builder: Their initial price is low, but they require “home buyer help”. We have seen certain home builders who provide a very low price, but they require the home buyer to excavate, paint, hook up utilities, and more. While the low price may seem appealing, the ugly home builder depends on the client not being able to do the work on schedule, which the ugly home builder will gladly complete — for a large premium. That is where their profit comes from, not the original contract price.

The ugly home builder has done more harm by far to the overall reputation of home builders and the homebuilding industry than anything else. We cannot emphasize this strongly enough: Beware the ugly home builder.

We Are Here To Help

At CDAhomeplans.com, we believe in providing our home buyers with as much information as possible so they can make the right decisions for their custom home.

Please contact us to schedule a call so we can answer all your questions — it’s free, and there is no obligation. We love to talk construction!

 

Call or text us at (509) 289-5305.

Todd J. Sullivan and his dog Loki in Coeur d Alene, ID

Todd J. Sullivan and dog, Loki in beautiful Coeur d’Alene, Idaho

Specifications and Selections for Homebuilding

SPECIFICATIONS AND SELECTIONS Specifications & Selections  How is your house built? What types of materials are used? How are those materials installed? What decisions do you make as the home buyer? What decisions does the home builder make? These are all...

Home Plans and Design for Custom Homebuilding

Home plans and design for custom construction How To guide with CDAhomeplans.com

Construction Process for Custom Homebuilding

The construction process can be hectic and chaotic. Lean about custom homebuilding and the process of building with cdahomeplans.com

Construction Financing for Custom Homes

Learn about financing your custom home with a variety of different loan programs for home design and custom homebuilding with CDAhomeplans.com

Construction Contracts for Custom Homebuilding

Construction contracts are critical to custom homebuilding. Learn about the components of the custom construction contract with CDAhomeplans.com

Change Orders for Custom Homebuilding

The Good, the Bad, and the Ugly in Custom Homebuilding Change Orders.
(208) 298-5305 TEXT me direct for Custom Construction with Sullivan Homes PNW