re: Builder Asking About Budget on House?

If you have defined the scope of the project well you are ok

Ive only done a flat fee.

Thanks for the detailed explanation. I'll have to talk more with the two builders I've spoken with concerning what you pointed out about financing. Based on your explanation they're both offering cost plus arrangements. The one who asked about my budget asked if I'd talked with any financial institutions concerning financing. I have talked with my bank but probably need to go back now that I have a better idea about the cost.

Cost plus contracts? Let's see? Hmmmm.

Builder buys from supply houses his brother-in-law owns, his friend runs or his fishing buddy manages billing. Nope, no room for fraud here. This is SURE to get you the best deal EVER!

The fellow I used is with Siegen 7. Name is Dale Cobb. He did good with us. From the time he scrapped the lot, till we were in the house was around 51/2-6 months. Did everything he promised and actually finished a little quicker than we thought he would. We ended up 4% over budget which we thought was pretty good.

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We basically sat down and discussed every aspect of the house plan. All the materials such as counters, flooring, insulation, veneer, roof. We discussed our property where it would be built, etc.

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I was going to say the budget is likely used due to not having a defined scope and idea of the quality of materials/appliances you're looking for, but if you discussed the project in this much detail I'm surprised he asked for a max budget.

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Is it normal when soliciting bids from builders for them to ask how much money you're looking to spend

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Absolutely. Why should a builder (and his subs) waste time bidding your plans and meeting with you when you might have unrealistic expectations? I can't tell you how many people think they can hire a contractor and have this $100/sqft price stuck in there head. I've met others that think they can build a mansion for $90/ft. Sure, you can build a decent house for $100/ft, but you could also make the same house nicer for $115/ft or cheaper at $90/ft. It's all in the details.

Proper planning is the most important part of any construction project. The final budget is a major key in planning. How can a builder gauge your needs without knowing your budget?

Advice for selecting a builder:
- don't hire someone you don't trust well enough to discuss your budget
- don't hire someone that isn't reputable (too many fly-by-night guys)
- if possible, don't hire a builder that isn't building other houses near you. they are more likely to neglect your house if it is way out of their way.
- don't let someone talk you out of what you want. most builders don't like to get out of their comfort zone. they don't like doing something that is different from their other houses. If you want something, stick to it.
- avoid builders that will build your house in 4 months. speed allows them to hide imperfections before you catch them. Fast, Good, Cheap... pick two.
- get at least 3 bids and make sure you compare apples to apples. are the allowances and materials exactly the same?
- even if you trust your builder, it's important to stay active in the process. Check on the house regularly and make sure things are done properly. If you suspect something is done wrong, ask a third party for their opinion.

Absolutely. Why should a builder (and his subs) waste time bidding your plans and meeting with you when you might have unrealistic expectations? I can't tell you how many people think they can hire a contractor and have this $100/sqft price stuck in there head. I've met others that think they can build a mansion for $90/ft. Sure, you can build a decent house for $100/ft, but you could also make the same house nicer for $115/ft or cheaper at $90/ft. It's all in the details.

Proper planning is the most important part of any construction project. The final budget is a major key in planning. How can a builder gauge your needs without knowing your budget?

Advice for selecting a builder:
- don't hire someone you don't trust well enough to discuss your budget
- don't hire someone that isn't reputable (too many fly-by-night guys)
- if possible, don't hire a builder that isn't building other houses near you. they are more likely to neglect your house if it is way out of their way.
- don't let someone talk you out of what you want. most builders don't like to get out of their comfort zone. they don't like doing something that is different from their other houses. If you want something, stick to it.
- avoid builders that will build your house in 4 months. speed allows them to hide imperfections before you catch them. Fast, Good, Cheap... pick two.
- get at least 3 bids and make sure you compare apples to apples. are the allowances and materials exactly the same?
- even if you trust your builder, it's important to stay active in the process. Check on the house regularly and make sure things are done properly. If you suspect something is done wrong, ask a third party for there opinion.

Great post.

Thanks for that post. I hadn't thought about the hiring someone building houses exactly where you are thought. I've been looking at builders in the Baton Rouge metro area but not specifically Prairieville where my property is located.

The price per square foot thing seems to be a useless metric to me. It refers to living area correct? But still it contains the cost for garages, driveways and other non-living area costs. I've already had this first builder come back and say look I think I'd have to bid this project at $125 a square foot so apparently builders think it's worth using.

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I've been looking at builders in the Baton Rouge metro area but not specifically Prairieville where my property is located.

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BR to Prairieville may not be too bad depending on the builder. A few years back a friend had his house built by a contractor that lives/lived near Zachary. This guy was building houses in Zachary, Central, BR, St. Francisville, & Prairiville at the same time. In my opinion, that is too much time on the road, and I'd rather a contractor that can check on my house daily. The builder would try to convince you that he could handle it b/c he has good subs, but I'd never let someone stretched that thin build my custom house. Ftr, this builder (far as I know) was a one man band. Some contractors have superintendents/foremen that allow them the ability to spread out some.

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The price per square foot thing seems to be a useless metric to me. It refers to living area correct?

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You are correct on both accounts. It is what most people use even though it's a terrible method. The problem is there really isn't a better metric to 'ballpark' costs. This is why detailed bids are so important.

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I've already had this first builder come back and say look I think I'd have to bid this project at $125 a square foot so apparently builders think it's worth using.

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It's useful only b/c there isn't a better way to do it, and it's the same language that everyone speaks. When bidding a single project, the price per ft isn't a bad method. The problem is people get hung up on it. Dig through old threads on here and the OT and everyone loves to brag about their price per sq. ft. It's virtually useless when comparing separate houses. My house was about $10/ft more expensive than one of my neighbor's house. Take one walk through each house and you'll understand why the difference: (higher ceiling, better finishes, custom shower, bigger porches, outdoor kitchen, unfinished bonus room, etc).