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re: Builder Asking About Budget on House?

Posted on 3/2/14 at 7:29 am to
Posted by guttata
prairieville
Member since Feb 2006
22525 posts
Posted on 3/2/14 at 7:29 am to
I wouldn't go with that builder. You should be looking for a flat fee builder. Someone who says I will charge you x amount to build that house. I've never understood the % guys. Why should they make more money just because you picked more expensive hardware or better flooring?
Posted by ForeLSU
The Corner of Sanity and Madness
Member since Sep 2003
41525 posts
Posted on 3/2/14 at 8:12 am to
quote:

You should be looking for a flat fee builder. Someone who says I will charge you x amount to build that house. I've never understood the % guys. Why should they make more money just because you picked more expensive hardware or better flooring?


If I were a home builder, the only way I would ever do a "flat fee" project is if the buyer agreed that once we signed the contract, the next time I would see them would be at closing. Flat fee means fixed and final scope, and an inflexible project schedule. Otherwise you're going to need a clear understanding of how change orders will work and what the builder will charge for them.

The problem with the "expensive upgrade" scenario is the builder typically incurs added project management overhead with custom items. Lead times are longer, provisions have to be made for installation, finishing, etc. An elaborate chandelier that you had imported from Italy is a much more complex install than a cheap pendent you picked up at Lowe's.
Posted by BeerMoney
Baton Rouge
Member since Jul 2012
8503 posts
Posted on 3/2/14 at 10:33 am to
quote:

I wouldn't go with that builder. You should be looking for a flat fee builder. Someone who says I will charge you x amount to build that house. I've never understood the % guys. Why should they make more money just because you picked more expensive hardware or better flooring?


Well the second builder told us his mark up is 12% which is supposedly the minimum recommended by their association if you want to stay in business long term.

To 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.
Posted by BeerMoney
Baton Rouge
Member since Jul 2012
8503 posts
Posted on 3/2/14 at 6:58 pm to
guttata what builder did you use? I ran across another one of your posts in an older thread and it seemed like you had a good experience.
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