INSIDER HINTS/ STRATEGIES/ INFORMATION

#1  HOW TO NEGOTIATE A LOWER CONSTRUCTION COST WITH A BUILDER/ CONTRACTOR, or 'More Home for Your Money'

Most builders today let out the finished construction documents to subcontractors to arrive at their final bid.  Most subcontractors do not allow for cost saving measures in the design unfortunately -- for example: back to back plumbing, modular dimensioning and materials, a relatively rectangular perimeter plan which reduces the cost of foundation returns, roof valleys and hips, etc.  In fact, the typical estimator will measure gross areas, total number of fixtures and outlets, and not give credit for savings that can be gained by the above efficiencies in design.  In fact in the current custom home market  the prime subcontractors and trades will quote 'per square foot', giving the builder a base model to figure costs.  During preliminary design, while the plans are still tentative, we recommend the Owner contact 2-4 builders in his/her area in order to get 'ballpark' numbers for cost of construction.  The Owner may or may not have a general feel for current costs, but should look at model homes and recent sales in the area to compare with the preliminary set.  Apples should match apples.  Details, scope of work, site considerations, budget, etc. should be weighed by the preliminary drawings.  Feedback based on the preliminary drawings obtained from a small group of builders the Owner feels most qualified, as well as by initial estimates provided by the Architect, should help direct the design further to match more closely the Owner's budget and general program from that point on.

STRATEGY: Supposing that the Owner is perfectly happy with the preliminary design but worried over a higher anticipated cost of construction after getting ballpark numbers back from the builders, we recommend the following strategy:  Study the plans and cut longitudinal and transverse sections out of the design to arrive at the most pared down version of your plan.  Since so much of the cost of construction is calculated by the total area (square foot) of materials involved, negotiate your best cost for construction on the smallest total area.  You may elect to complete the drawings based on the smallest acceptable area or develop a second set with your ideal total footprint.  When bids are returned on the smaller set of drawings (with specifications -- recommended) sit down with the builder with the most reasonable bid and inquire, for example:  "If we add x feet here and y feet in the following areas, how will this affect the total cost?"  Typically, the extra built area will not add a proportional cost to the total bid.  The result is more home for your money.

Another tactic is to grant the contract as bid provided that the builder accept the higher area.  If this move seems a bit questionable, realize that you can not believe the efforts builders go through in studying negotiation strategies!  Most survive through advanced tactics gained in seminars, etc.  The extra costs involved with producing two sets of drawings is more than gained by the lower construction bid!

An amazing psychological strategy is to print a large project at a smaller scale!

 

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Custom Luxury Homes and Plans by John Henry AIA.  Period traditional styles and contemporary modern floor plans for new homes.  Dream homes, Tudor mansion plans, French country chateaux, European castle plans, French country house plans, remodeling, interiors, house plans, luxury house plans, real estate, home plan designs, resources, free questionnaire.  Also commercial projects: theme resorts, hospitality, renovation, urban planning, small town design, retail.  

 

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Custom Luxury Home Plans by John Henry AIA.  Period and contemporary floor plans for new homes.  Dream homes, mansions, chateaux, castle plans, remodeling, interiors, house plans, luxury house plans, real estate, home plan designs, resources, free questionnaire.  Also commercial projects: theme resorts, hospitality, renovation, urban planning, small town design, retail                                                                      Copyright 1999/2000/2001 by John Henry Design International, Inc. All rights reserved.  Republication or re-dissemination of this site's content is expressly prohibited without the written permission of John Henry Design International, Inc.