How You Can Assure Your Home Builder Doesn’t Give You An Incorrect Bid
By Ryan Siebert
I’ve been working in residential construction for the last 10 years and have had the privilege to take part in over 450 projects. At one point in time or another during each project there was at least one contractor that took advantage of the job by either delaying the project or completely missing on the construction bid they promised. The worst part for me early on was that I had no clue what was right or wrong, even when it came to paint and carpet rehabs. I was constantly at the mercy of the so called experts and found the increased costs from missed timelines and mis-bid projects to be borderline insanity, which is why I made the decision to change from a developer to a home builder.
As I dug down into the numbers I started to realize that subcontractors generally try to make a profit of 20-25 percent. As a development company without licensed employees, I realize we are at the mercy of paying the subcontractors for their work, which is fine with me, they should get paid for good work. Unfortunately there were too many times when the contractors were asking for more money after their work was completed because they mis-bid the project in material or timeline costs. There was no way I was going to be able to spend the next five years of my life figuring out how to measure a 2X4 for framing the house or taking an electricians class to get my license. I had to come up with another solution.
What I realized was that we needed to systemize our bidding system to decrease bidding fluctuation, and clarify the expected timelines for our projects. Each project that we take on today goes through a three step process to assure our projects will come in at budget and on time. These are a few of the areas that you need to be looking closely at when getting a bid for your custom build.
- Identification of trades needed – Whether it is a basic project or a review of full architectural plans you and your builder will want to be able to identify the needed tradesmen that will be needed on your job. Specialty projects with custom work will require more tradesmen; elaborate stone, circular stairs, radiant flooring, design build landscaping, etc. Once you have your blueprints developed review closely with your potential builders and architect to assure all tradesmen needed are included in your bids. If one builder is not including a few of the tradesmen be sure to clarify to them. A forgotten tradesman can lead to thousands of dollars in missed costs. If you are not sure which trades you can use, then you can download our tradesmen list here:
- Identify Material list – Don’t end up getting yourself upset about the cost of materials for your project after you are already too far into it. Setting realistic budgets for your project is a must. You need to know what your style is for a home. Are you looking to spend $2,000.00 in tile for each bathroom, or $10,000.00? If you have no clue, do yourself a favor and measure out the flooring and bathroom square footage in your current bathroom. Then price out tile selections that meet your tastes. Also, take into consideration the amount of total project that you are looking to spend. Your material costs can change and make a huge dent in your budget. We have an extensive material list that we use for each room of the house so there are no surprises or missed material. You can download this list here:
- Questions To Ask Your Builder and to be sure the subcontractors are asked as well – The final and yet most important part of your bidding process is to interview your builder. The questions that we find the most value in are:
- References from recent jobs – Names, emails, phones, pictures, videos. Get information about your builder and do your due diligence before signing the paperwork.
- Recent work to view, pictures, or in person views of homes.
- How do they process cost overruns – They are going to happen, but are they going to drop the invoice your way at the end of the job site, or are they going to issue a change order before going over budget?
- Does their bid include materials and labor, or just material? – This seems like a simple question, but make sure that you know the difference so you don’t end up budgeting for a $5,000.00 roof, only to find out that you are paying for the shingles separately.
- Current Availability – How many jobs can they handle with current crews? How many jobs do they currently have? More importantly how available are they for communication? Do they answer the phone on weekends? Email availability? Use of technology to communicate job updates. How you communicate with your builder and how they communicate with their subcontractors is a huge determinant of your transparency throughout the job. The more that you are aware of what is going on, the less stress you will have throughout the project. If you would like to set up a free consultation with us to talk more about your potential custom home building project fill out the attached form and we will set up a day and time to meet you asap.