Beware of Unrealistic Builder Quotes

Here's what most people don't know and may never know, and I share this as an insider who has practiced in real estate sales and law for almost 30 years, including as an adviser to builders and contractors:
  1. There is a vast difference in the quality of homes built from contractor to contractor.
  2. Advertisements of low construction costs based on the cost per square foot is a Trap for the Unwary homeowner.
 As a real estate lawyer, I saw many clients who had been planning for years to build their dream homes or their retirement homes. These clients, who were good people, successful people, and intelligent people, hired their builders based primarily on one factor: cost per square foot. The reason these clients were seeing an attorney is because of two main problems: their homes were not being built with the quality materials and workmanship they expected, and there were so many surprise extras that the cost per square foot originally quoted in the advertisement that brought them to the builder had increased substantially. How does this happen?

Initially the homeowner talks to the builder about his incredibly low cost per square foot advertisement, and as he goes over what they want, and as they have several more meetings, the homeowners come to accept the fact that they will have to pay probably $20 to $30 more per square foot than the advertised rate in order to get the home they want. So they sign a contract, and then what?

THERE IS A VAST DIFFERENCE IN THE QUALITY OF HOME CONSTRUCTION

The above average couple who plans to have a new home built are simply not knowledgeable about construction standards, the difference in the quality of materials that a builder chooses at his discretion, the shortcuts that some builders take to make more profit at the expense of the homeowner, the "little" things that a builder can leave out of the contract discussion and then, as though they were unexpected later during construction, suddenly require $5,500 more for drainage permits and work, $3,200 for a couple of additional windows that should really have been in the original design, $4,750 for a change in the flooring materials, $7,200 for kitchen cabinet upgrades, $2,100 for appliance upgrades, and on and on. The homeowners did not think the builder was going to use the cheapest generic brand appliances, but he was. The homeowner thinks these are unexpected surprises for the builder, too, but the builder has "been there, done that." There are few surprises for an experienced home builder. The only one who gets surprised is the homeowner, who has to somehow come up with a lot more money than they planned in their budget.

This is how the homeowner gets sucked into a contract, and ends up paying as much or more than what they would have paid another builder who gives honest quotes up front and builds a true quality custom home.

True story. Two homes were built adjacent to each other, one by a quality home builder and the other by the discounter. The quality home builder had the home completed in five months, and the homeowners moved in very pleased with the quality and the guaranteed contract price. The discounter next door did not complete that home for over a year, and those poor homeowners were kicking themselves for hiring the lowest bidder, because in the end it cost them more money, more time, and a lot of stress. What's interesting is that they originally talked with the quality builder, but his bid was higher than the one they hired.

Who are you going to hire as a builder? The lowest bidder or the best builder in Sequim or Port Angeles? Realize that ultimately the best builder may actually be the lowest bidder per square foot, but it won't sound that way when you are being sold by a discounter. I recommend getting some inside help on how to do your due diligence in selecting a builder. You will be very glad you did.

Who is the best home builder in Sequim or in Port Angeles? I know some good builders, some great builders, and . . . well, some who have had unhappy clients. Email or call me, and we can talk about what kind of home you want to build and what kind of builder you would like to work with. I'll help match you up if I can.
 
chuckmarunde@gmail.com
(360) 775-5424
 
Post is included in group: Realtors®

2 Comments on Beware of Unrealistic Builder Quotes

Great post.  Please follow it up with how to find a quality builder in the area you would like to build in.  Many of us plan to retire out of the area we are in, and would like a little guidance.  Thanks

04/17/2008 10:04 AM by Kathryn Tharp ~ Rancho Cucamonga Real Estate Specialist (Realtor)


This article is so true and was very informative. My husband is a builder and we know from experience how little changes can drastically alter the cost. We build custom homes and many people expect custom quality for spec built prices.

04/17/2008 10:12 AM by Amy McAllister Realty LLC


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