Builder Asking About Budget on House?

How well defined are the features? Like is the type of carpet selected or does he include that on his bid?

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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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yes, it is normal. First, the builder wants to make sure it's possible to build the house you want built with the budget you've set. In addition, he may select a different sub-contractor in certain areas based on budget. He also wants to make sure his time putting together a proposal is worth it.

The key to building a house is to understand that the builder is your partner, not your adversary. The more he knows about your budget, timeline, etc., the better job he'll do. (or she)

Honestly, time is money. I grew up in a contracting family. Most established contracting businesses are there not because of screwing their customers, but by taking good care of their customers. If your contractor/developer is well established, has a nice portfolio and you can drive through an area and see the quality of their construction, then they deserve to make a profit for providing you with a partnership in the process. A good contractor will work with you and help you come up with the best value for your money and will be able to help you not make poor decisions.

A good contractor wants to insure that 5, 10, 20 years down the road, your property is retaining substantial value.

If you are soliciting quotes, and don't have experience in determining the best quote (not the least expensive, but you can sometimes be surprised), there are people who can advise you. Contact the local office of the Home Builder's Association and request referrals for a qualified appraisal of the quotes. Good builders do all the right things and marginal builders skip small details, use cheaper materials and cover up mistakes instead if doing things over to be done correctly.

Tell the potential builder your budget. It helps them to know if they can reasonably meet that budget and provide you with a quality end result. You should do your homework in advance to find out if the builder has a good reputation and to view some previous properties they've built to see how they're holding up. If you get good reports on the builder, don't sweat the price. A good contractor is worth the price they quote you, as long as they can stay in your budget.

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How well defined are the features? Like is the type of carpet selected or does he include that on his bid?

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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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who is the builder?

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I'm not going to name him at this time. Just because the general tone of the discussion is "is this legit?". I wouldn't want my name mentioned if I were him.

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o me the % makes sense because things which are logistically more complicated are more expensive. So a percentage makes more sense than a flat fee in terms of executing a project.

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Depends on what items you mean. $3/sq wood flooring vs $10/sq exotic wood shouldn't make much of a difference. GE appliances vs Viking/Subzero doesn't make the contractor work any harder. High end marble throughout vs granite etc.
I am paying my builder a flat fee but I am the contractor on paper so it is a little different.

Not a builder, but if you brought me plans for a 3500 sq ft house and told me your budget was 200k, I'd rather not waste my time or yours. If you told me it was 700k id know not to bid laminate floors and pre fab cabinets when pricing things out. Knowing the budget is really the best way to get the most accurate cost of the scope of the project. The builder knows or should know you're bidding it out, so that will keep everyone in check. Otherwise it's just this time wasting guessing game, and the guy who guesses right, but may not be the best guy for the job, wins

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Cost plus fee is the way to go

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Depends. You've got to know builder materials pricing. Is the average person really going to question 2x4 and Sheetrock cost? No

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ForeLSU

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Builder to GFunk: Here's the names of a couple of my competitors, I'm sure you'll be happy with your house. ...snickers, gets back in truck

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Thanks your for your time, shakes your hand, and looks you right in the eye. Wonders why I need to tell you what my budget is without you telling me how much money you'd make off my budget?

Oh well...

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Cost plus fee is the way to go. That way if you get nicer windows/ lighting fixtures/ floors, etc then he doesn't make more money off of you. In addition, the builder will not buy the cheapest wood/sheetrock/shingles, etc because it will not affect his profit margin.

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I agree. The only way I've ever built is a cost plus deal. Of course you have to trust you builder. If you don't do cost plus you are begging to have your builder cut corners IMO as it will improve his bottom line as mentioned above.