You’re ready to build your dream home. You’ve done your research and you’ve narrowed it down to a handful of builders. As you get ready to meet with prospective builders, its important to know some key terms that you will hear in your consultation.
Terminology. All this builder lingo can get confusing. Here’s a primer-
Budget is how much a person can afford to spend or how much a person wants to spend on a house. If you set your budget at $500,000.00 then the total cost to construct the house should not exceed $500,000.00. At Stockell Homes we can accomplish this for you.
Bid is a fixed price for some specified item to be done. For instance; we ask a plumber, how much exactly, would it cost to install an Insinkerator, model 33, under my kitchen sink? Total price to include removing and disposing of the old one. He gives us a fixed price, not to exceed, based on a specified item and task – This is a Bid. At Stockell Homes we get very accurate whole house bids when selections and clear specifications are made up front.
Estimate is a guess, based on similar finishes, style and square feet. An experienced builder can look at a picture and a floor plan, and knowing the square feet, guess fairly well – within about 20% or so. This is based on previous houses they have built. For example, the last house we built with a similar style and similar finishes cost about $170.00 per square foot. The plan you have is 2,800 square feet. So, we estimate the house will cost $476,000.00.
Selections are all the individual components that are used to build and finish your home. These are owner choices and these choices determine the cost of the home. The first choice is how big and what style. 4,000 square feet or 2,000 square feet? French provincial, American Arts & Crafts or other? Do you want a basement? 9’ or 8’ walls? 2×6 framed walls or 2×4? 8’ ceilings or 10’ ceilings? Asphalt shingles or slate? Brick, stone or vinyl siding? Vinyl or wood windows? Custom cabinets & granite or stock & Formica? Etc. All these selections determine the cost per square foot.
Allowance is a guess about how much an item might cost or how much a group of items might cost. It is also based on similar houses, with similar finishes. For instance; if I am talking to a client and we discuss an allowance for cabinets, I might say, the last house we built like yours, the total cost of cabinets was $30,000. This could be used as an allowance. It is only a guess, because the new client has not selected the cabinets yet. The new client might want much nicer cabinets and they may end up costing $45,000.
Allowances are used for cabinets, countertops, flooring, plumbing fixtures, lighting fixtures, siding, etc…
Folks are in a hurry these days and they want to get construction started as soon as possible. Many builders do not let their clients know, that using allowances creates an “estimated” cost of construction. It is usually a frustrating ordeal trying to build when decisions have not been made. It slows things down and creates tension, anxiety and it creates budget concerns, because some of the things they are now selecting are more than the allowance the builder or architect gave them. At Stockell Home we insure this does not happen to you. We fully inform our clients of the pitfalls of allowances. Stockell Homes prefers to use the following best practice.
Best Practice. The best-case scenario is for the client to take a little time up front and with the guidance of Stockell Homes to actually make some real selections. We advise our clients on who the best and most competitive vendors are, who to see, addresses & phone numbers. We suggest that our clients go to the siding company and select the siding, to the cabinet company showroom and select the cabinets they want, to the plumbing supply house and select the tubs, toilets, and faucets, to the flooring center and select the flooring, etc. All this information is then forwarded to your personal coordinator at Stockell Homes who enters it into selection sheets and then sends the selection sheets along with the plans to the various trades and solicits real bids. In this way we provide our clients with an accurate cost of construction. Our clients can upgrade or downgrade different items to stay within the budget. Once they are content with their final selections and they know the total cost of construction, we move forward toward an enjoyable building experience. It’s comforting to know that everything is selected and ordered and things just hum along. No surprises! That’s the Stockell Homes difference. We have proven systems in place. We’ve been doing it for years.