When something sounds too good to be true, it often is. Our team just recently went through an interesting exercise that really helped someone see how to compare builders, and we wanted to share it with others who might be in the same quandary. This individual was comparing builders. He’d talked to several of them, and all but one had given him relatively similar numbers. However, the builder who gave him the really great, unbelievable numbers was the one that drew his attention. After all, a really great bargain is what we are all after, right?
How to Compare Builders
This individual wanted to cap his budget for the home at $1.7M. The builder stated that he could build the home they wanted for $50/sf less than any other builder in town. So just to use round numbers, every other builder was quoting, say, a price of $300/sf, and this builder was quoting $250/sf. So what’s the difference?
We started out by looking at some other homes that this same builder had built. It turns out that there’s a lot of publicly available information about previous homes built by a builder, and that’s what we were after. Anyone can say anything! So what we wanted was publicly available data! After searching a bit, we found a home currently for sale with a very similar price range in a similar subdivision that was built by this same builder and used it as a price comparison.
Putting one we recently built side by side with this home was very revealing. Check out the differences between these homes!
Know Thy Numbers
The moral of the story? The “devil is in the details”. The reason builders can quote really low numbers is because they know that clients aren’t willing to accept the lack of details and less expensive alternatives in their higher end homes. So, every time a client says, “I’d like a sink in my outdoor kitchen, please”, that adds to the cost. Also, there are some out-of-pocket costs that could be left out. Things like architect fees, engineering, pool, landscaping, tap fees and permitting fees, can easily add up to $50/sq ft. So just be aware that you need an apples to apples comparison to really know your numbers.