We hope that all of you have been enjoying our mini series as much as we have enjoyed creating it. Building a custom home should be a an enjoyable experience and a process you remember with fondness. We hope that our first three articles provided you with tools that will help you conquer your next build. As a recap, we have talked about selecting a building site, the creation process, and the design phase; and we’re not done yet. Now it’s time to talk about obtaining a bid from your custom home builder.
One major thing we highlighted in our last article was how important it was that we have our architect in-house. Because we have our architect in-house, we’re able to make adjustments to a client’s floor plan without having to charge them for a redraft. That advantage becomes critical during the bidding process. If for some reason we came in a little too high or too low, we can always add or take away components to the plan.
When it comes to the actual process of bidding, we usually take one of two approaches with clients. We either bid out the project with our standard allowances, or we go with a customized approach.
The Standard allowance approach is what most home builders will use. It’s the industry standard, and pretty straight forward. That standard allowance process is where a builder will draw up a client’s plan, and then based off of that plan they will start bidding the house as if the client were to put the standard components in their home. As the building process occurs the builder will then send the customer to their preferred vendor, tell them what the bid allowance is, and then have them pick components (such as light fixtures or appliances) that fall within that allowance.
The advantage to the standard process is that it speeds up the bidding phase and gives the client a little more time on making a final decision on paint color, counter tops type, floor coloring, etc. However, the main disadvantage to this process comes when a certain product a client actually wants is not in the allowance budget.
We’ve heard stories of individuals who got a bid from their builder and thought they were getting a steal of a deal. The contractor gave them a price based off the builder’s “standard allowance”, the contract was sign, the customer was excited, and the building commenced. Unfortunately, when it came time for the customer to pick out the features they wanted, they realized that the bid they were quoted only allowed for features they absolutely did not want. The customer ends up having to file 5 or more change orders and that killer price that they thought they were getting starts to climb very rapidly.
Ultimately the customer is left dissatisfied.
The Customized Approach
While Dennis Miller Homes will certainly bid a home using the standard-allowance approach, we typically prefer clients to use a customized approach. When we build your home, especially a custom home, we want you to have the features and components you want. Therefore, rather than give you our allowances, we instead send you to four or five of our main suppliers and have you choose the features you want in your home first. After you’ve picked out what you would prefer to have in your home we then provide a bid.
We feel the main advantage to obtaining a bid this way is two fold. First, if for some reason the bid comes in higher than you like, we can start changing features in your home while keeping the ones you absolutely can not live without. Second, once the bid is finalized, few change orders will have to be processed and the price you received at the beginning will be very close to the price you actually pay. Overall, this creates a better experience for both you as the customer and us as the builder.
Remember, building a home needs to be fun. Most customers are surprised at what kind of features they can actually afford; so don’t be afraid to splurge a little. If you are quoted using the standard approach, make sure you understand what the standard allowance will get you. If at all possible try and use the customized approach. It will make your building experience a lot more enjoyable.