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Building a custom house - How to start?

ozrepair's picture

 Hi,

Being disappointed with the build quality of our current house and houses we have seen for sale I would like to have a small house built with better craftsmanship and with regards to energy consumption.

I approached one of the local custom home builder and the first and the only question I was asked was my overall budget (we communicate via email during this initial phase).

I feel that the approach should be different. I would personally take some existing basic floor plan matching the customer's required square footage, add significant features like quality doors, windows, insulation, and other easy to add and calculate major upgrades and calculate the total cost less the cost of the lot.

I would present this cost to the buyer so that the buyer can see how much is left for the lot.

Asking for a total budget first seems like going to a used car dealer who asks about the total budget. 

What do you guys think?

Thank you! 

I think asking for a total (post #215885, reply #1 of 14)

I think asking for a total budget is reasonable, in the early stages of negotiation.  Normally, in face-to-face discussions there would be other information exchanged as well, but email is often awkward.


Of all the preposterous assumptions of humanity over humanity, nothing exceeds most of the criticisms made on the habits of the poor by the well-housed, well-warmed, and well-fed.  --Herman Melville

Was in your position 4years (post #215885, reply #2 of 14)

Was in your position 4years ago.

So, bou8ght a small used dozer, other tools I did not already have, etc...

DIY ALL ourselves. Plans,permits, plumbing , elec, framing, roof, etc. 

Unless yu have an unlimited budget, IMO is the ONLY way you can get what you want.  Otherwise, overhead cost and increased material will eat any bulder profit - no reason to build a house for somebody else except t make a living doing it.

Pay up or learn how to do all the trades. 

If you are frugal and shop CL and one of a kind closeouts and use HFH ReStore extensively and count your own time as recreation or 'excercise', you can build for under $20 sq ft Or evenunder $10) that someone in the business would need over $150 sq ft to accomplish!  

Interior shot of 1600 sq ft ADU built for $8 sq ft  (plus about $2 sq ft for permits!  - The fancy window was a return at big box, marked down form $1600 to $192,, etc....

 

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 I would have to quit my job (post #215885, reply #3 of 14)

 I would have to quit my job to have time and energy to build the house myself.  I envy you for being able to do it.

I think without some idea of (post #215885, reply #4 of 14)

I think without some idea of your budget the builder would be wasting his time.  Estimates aren't free to the builder. I've spent as much as 40 hours doing a single estimate (and got stiffed on it).  Everyone has champagne taste but most of us have a beer budget.  Your builder's request is very reasonable and will help you both get to where you want to go.

Florida Licensed Building Contractor, 50 years experience in commercial remodeling, new homes, home remodeling and repairs and all types building maintenance.

I think 40h estimate for a (post #215885, reply #8 of 14)

I think 40h estimate for a first contact with a customer is overkill. It is not that kind of detail I am asking for.

He is probably feeling you (post #215885, reply #5 of 14)

He is probably feeling you out.  If you tell him your budget is 200,000 for a 2000 sq ft "upscale" house, he's going to know he is dealing with an idiot and a PITA......he can shut that "spit" down without even an once of effort on his part.

On the other hand, if you tell him your in for 500,000 for the building cost on that 2000 sq ft he is going to be doing cartwheels for you.

 

....and yes car dealer do weed people out by asking what they intend to spend....no sense putting then in a 90,000 Escalde when they have 20,000 grand to spend.  It just makes the customer unhappy from the very start because they arent going to happy in a used dodge caravan after you have shown them the Escalade.

Why the reverse logic would (post #215885, reply #10 of 14)

Why the reverse scenario would not be appropriate? We build 2000 sq/ft homes for $350,000 and up. For $350,000 you get limited customization, 2x4 framing, economy carpet, etc but high craftsmanship....

I agree, he is feeling me out.

As far as buying a car, what's wrong with this situation:

  • Buyer: I really like the red mustang. How much is it?
  • Seller: It is $25,000

vs the one you proposed below?

  • Seller: What is your budget?
  • Buyer: $35,000
  • Seller: We have this red mustang for $29,000

So, go look at a house he (post #215885, reply #11 of 14)

So, go look at a house he built on spec and ask how much it is.  Do you go to a car dealer and tell him "I want you to build me a car"?


Of all the preposterous assumptions of humanity over humanity, nothing exceeds most of the criticisms made on the habits of the poor by the well-housed, well-warmed, and well-fed.  --Herman Melville

That is a good option, but (post #215885, reply #13 of 14)

That is a good option, but only if the house has A), B), and C). 

He also needs to know what (post #215885, reply #6 of 14)

He also needs to know what your budget is to be able to set your allowances.  He isnt going to know whether to allow you $25,000 for flooring or $50,000 for flooring unless he has a budget to work with.

Imagine how many people he has come up to him expecting a top notch house for an unreasonable budget.

He gave me a range of $175/sq (post #215885, reply #7 of 14)

He gave me a range of $175/sq ft to $300/sq ft. and told me to search for a lot with my budget and sq footage to see if that would work. The lots here are anywhere from $30,000 to $600,000.
 
Will $175/sqft or $200, or $250, or $300 give me the features I want? I have no clue.
 
If I were him, I would learn how to make quick estimates while asking the client what are the most important aspect of the house. 
I would respond with with this list: A) super insulation (2x6 framing or spray in insulation) B) quality windows C) nothing else matter.

The $/sqft budget defines the (post #215885, reply #9 of 14)

The $/sqft budget defines the quality of finish you're talking about, from plastic trim and discount carpet to fancy detailed wood trim with hardwood floors.  There's only a loose connection to floor plan (mainly in terms of the total number of rooms).


Of all the preposterous assumptions of humanity over humanity, nothing exceeds most of the criticisms made on the habits of the poor by the well-housed, well-warmed, and well-fed.  --Herman Melville

Right. So he could simply (post #215885, reply #12 of 14)

Right. So he could simply send me a spreadsheet with prices per sq-ft and quality finish included. Simple. Today, I do not know what I get for doubling the price for example. 

I as a customer do not even need to know their sq/ft per price. If I provide the most important features, as I mentioned A), B), and C) he should be able to plug it into his spreadsheet and give me a price.

In addition, for the area he is servicing, he could give me an average sq-ft price for a lot.

Adding both prices is simple to come up with a rough estimate. 

The price per square foot for (post #215885, reply #14 of 14)

The price per square foot for a lot could be all over the map, depending on terrain, access, view, and a dozen other factors.


Of all the preposterous assumptions of humanity over humanity, nothing exceeds most of the criticisms made on the habits of the poor by the well-housed, well-warmed, and well-fed.  --Herman Melville