Comparing Builders Apples To Apples

When embarking on the journey to build a Custom Home, one of the most critical aspects is comparing different Builders effectively. It can be a daunting task given the uniqueness of each Builder’s offerings and pricing structures. To ensure you’re making an informed decision, you need to learn how to compare “apples to apples” by understanding the standards and pricing offered by different Custom Builders. Failing to compare Builders in this manner could lead to:

JT Custom Builders has a few suggestions to help you avoid those. The Big Four areas to compare are: included standards, method of rough pricing, what is included in the cost, and allowances.

The TLDR (too long, didn’t read) version: 

• • Included Standards are almost never the same

• • Builders do rough pricing differently so make sure you’re understanding how it was compiled

• • Verify what is included in the cost that is provided

• • Determine if allowances are realistic or just placeholders that you’ll exceed

We’ve added a lot of additional detail below for those who would like to read on. Either way, JT Custom Builders knows and cares about these things, so don’t hesitate to contact us TODAY to learn more about our process and to get started.

Included Standards

It’s no secret that there are thousands of options when it comes down to the various selections that will be made for your home. From tile in bathrooms to cabinets in the kitchen to what is included for flooring and how many paint colors are allowed on your walls, there are just so many things to decide (and compare).

Take flooring for example. Unless you’re talking about exotic hardwoods which can be VERY expensive, most wood flooring options are $3.50-10.00/SF. So, while you may have your eyes on a nice white oak floor that is around $7.00-$8.00/SF, your Builder indicating “Hardwood included” may have only included the low end option. This meets the “standard” they may be referencing, but it’s a far cry from what you were looking for. To get what you want, you could be looking at a very expensive change order.

With cabinets, two Builders may say they have included white painted, shaker-style cabinets, but are the qualities the same? Is the layout the same? Do either of them include roll out shelves, drawers, etc.?

It helps to ask your prospective Builder the question of “what exactly is included?”, but even better is a Builder who is transparent about it from the start.

At JT Custom Builders, we recognize that there are so many options, and while it’s nearly impossible to have every single item nailed down Pre-Contract, we at least look to share what we have included and also include what is appealing to most of our Customers. In the case of the flooring above, one Builder may “appear” to be, say, $10,000 higher, or perhaps they are more thoughtful about what is being included.

Method of Rough Pricing

When you start searching for a Builder and are in the process of your initial evaluation, inevitably, the question of “how much is this going to cost?” will come up. 

The challenge for YOU is that this is the critical point where you’re likely deciding: can I afford this? What is this project potentially looking like from a cost and feasibility perspective? And which Builder is going to help me achieve this dream?

The challenge for the BUILDER is that we typically operate with limited information, cannot invest all of the necessary time and resources to develop a thorough and detailed price, and need to provide some meaningful information that’s: not too high, or we risk losing a potential customer and not too low or we risk upsetting a customer if the price ends up coming in much higher.

With this, Builders will approach this early rough pricing differently. Some will simply take a cost per square foot ($/SF) multiplier and just leave it at that. Some will compare it to previous projects for similarities. Some will perform a very quick estimate with the plans in hand. Almost no one will perform detailed take-offs, estimates, and competitive bidding this early, so how do YOU compare which rough price is the most accurate and thorough? Ask questions!

• • How did you come up with that price?

• • Do you have similar projects that you were able to draw on to develop this price?

• • Are you typically successful with this early pricing when final pricing is completed?

At JT Custom Builders, we recognize the challenges on both sides. While we do not perform detailed pricing at this stage (we have a Pre-Construction Agreement which outlines how we handle this part), we do review available plans and information seriously and as thoroughly as it makes sense. Typically, we spend a little bit of time performing a combination of the methodologies mentioned above to garner a sense of confidence with the pricing we are putting forth. The rough pricing will always include a disclaimer that we just don’t know exactly what your project will cost at this stage, but we do make every attempt to be as accurate as possible to help prevent challenges down the line.

What is Included in the Cost

This may sound similar to the included standards mentioned earlier, but this is much different. It actually piggybacks on the previous point about the method of rough pricing. When you receive rough pricing from a Builder, it’s important to understand if they are including EVERYTHING that will be needed to complete your home, or if they are only including the house. Different Builders call the costs to finish the lot/land different things, and some give it a fancy name to further separate it from the house cost. 

In other words, when you provide a set of house plans to one Builder, they may say: this will be around $__/SF to build. You do some quick math and think “great! This might actually be more affordable than I thought.” You then send to another Builder, just to do your due diligence, and this Builder is significantly higher. Deflated, you are upset with the second Builder and think they must just be in it for the money, so you start talking to Builder one. As your discussions continue, you realize that they only included the literal costs to build your home, but didn’t include a septic system, well connection, driveway, seeding, etc. They may have not even included estimated impact fees (which vary by County).

As you can see, these costs will add up, and perhaps Builder two was including estimated costs for these in their first pricing, whereas Builder one adds them as separate costs later. BOTH methodologies work and can be appropriate, but it’s very important for YOU to know which one is being used.

Allowances

Our last big point to suggest looking in to when comparing Builders is allowances. First, are allowances used? And Second, are the allowances used generous enough to get what you want.

Believe it or not, some Builders will give a one-page contract with a bunch of allowances and call that good enough. Run far, far away from them. Some Builders will give a bit more detail, but tie up all of their selections in allowances. This is fine (not great), but it’s important to then pay attention to the point below.

Allowances are only good allowances if they allow for what you want! What does this mean? Similar to the flooring example before, it is great if your Builder is including an allowance for tile in the bathrooms, but if they include up to $2.00/SF, is that really going to give you any options? Imagine going to the grocery store these days with $20 in hand to buy food for the week. It just isn’t possible unless you’re living off water and microwavable soup.

The problem is that if it’s in the contract, YOU will be held to it.

Ultimately, with selections, there are two big points:

1. 1. YOU will be the one paying for the items you want. Builders know this, so the ones who are transparent and up front with what’s included, will be more trustworthy and better to work with in the long run. The final price may end up the exact same, so why not get there with less angst and stress?
   2. A caring and collaborative Builder who knows your taste and budgetary preferences will be able to recommend items that work within or close to your budget that may not be exactly what you want, but satisfy a middle ground.

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To summarize this information, it is vitally important to find a Builder who recognizes these points and helps to make your experience as enjoyable as possible. At JT Custom Builders, we build your home for YOU. We know that a collaborative approach with a good, trusting relationship is the best way to approach such a large investment. 

If you’d like to hear more about our process and how we work to provide you with the clearest, most transparent information possible, contact us TODAY!