Tuesday September 19, 2017
Home Price Reality Check
Consulting with a builder before drawing the plans will save money and headaches.
(Adapted from a blog post by Castle Homes of Nashville, TN).
Most custom builders have had prospective clients show up at their office with a set of finished plans that will cost 25% to 30% more to build than the client’s target budget. It doesn’t have to happen this way. Asking a custom builder to develop a “pre-budget” can eliminate surprises and help you get the home you want without blowing up your budget.
You shouldn’t base your cost expectations on average square foot prices that you learned from a friend, on the Internet, or in advertised prices of homes in new developments. “Spec Houses” in new developments are value-engineered from stock plans that eliminate features that don’t increase the home’s appraised value, such as high-end, built-in appliances. Think of a spec house development as an outdoor factory. Each house uses the same materials and finishes, allowing the builder to get volume pricing from distributors. Also, because all floor plans are similar, crews can assemble them quickly. Repetition works to keep prices down.
At Turnstone, we work in a far different world. Each home we build has a unique floor plan as well as products and materials that are, well, custom. The homeowners get exactly what they want, but pay more compared to a spec home of similar size.
As a Design/Build company, Turnstone can take your project from initial concept to a completed home, without ever losing sight of your budget. If you prefer to use outside design resources, you can still ask us to review your vision before you have plans drawn. We can generally spot a disconnect between your wish list and your budget very quickly. We will suggest ways to value-engineer the home, and ways to save money on products and materials.
While we can’t buy products in bulk, we are skilled purchasers and will work hard to get the best-available pricing. We often suggest lower priced brands and models that look and perform as well as higher priced options.
Once the design process begins, it’s a good idea to have a builder do spot checks at different stages. A Design/Build company Like Turnstone will do this as a matter of course, and many architects will involve a contractor in the design. Be sure to ask
If you will be seeking bank financing, a pre-budget is a vital reality check. Banks generally won’t lend more than 80% of the home’s appraised value, which is based on the price of comparable homes. Expensive kitchen appliances and nice landscaping packages add cost, but may not fully increase the home’s value in the bank’s eyes.
The bottom line is that involving a professional custom builder at the earliest stages of the design is an investment that should easily pay for itself.