Q: I was told that the only way to find the right builder for the job was to get
bids and just take the lowest one. Is that right?
A: Choosing the right builder can be a difficult and time consuming process. But
when you consider that for most people, your home is the single largest investment in
your life, it is probably worth some effort to do it right. Competitive bidding is one way
to select a builder, but before you decide to go this route you may wish to consider
some of the following thoughts:
1. The job must be well defined with thorough, written details so that it can be bid
apples-to-apples. Many details in construction are subject to interpretation. Your low
bidder will undoubtedly choose the method or material which suits him best, not you.
2. Does competitive bidding ensure that you will get the lowest price possible?
Absolutely not! Builders must provide contingency in their bids to cover the risk that
costs may change. If costs remain stable the builder keeps his contingency money.
3. Lowest Bid - Are you qualified to distinguish which bid is not only the lowest price,
but also whether that bid includes everything the other bids include?
4. How do you decide who should bid your project?
5. How many bids does it take to guarantee the lowest price?
Q: How much should I expect to pay per square foot for my home?
A: Over the years I have heard all sorts of snappy answers to the square-foot-cost
question but the best yet goes something like this: "Buying a house by the cost
per square foot makes about as much sense as buying a car buy the pound."
If you ask a builder for a square- foot-cost quote you'll probably get it. As an industry,
we are generally eager to please. However, if you choose your builder by cost per
square foot, you are missing the big picture. You really want to know what it will cost
to build your house, not just any house and not even the best builder can answer that
without a whole lot of infomation. I know for a fact that I have lost business due to
quoting numbers too high AND too low!
Note: A common misunderstanding among buyers are the garage and basement
costs. Some people I talk to think that basement and garage costs are thrown in for
free. When in doubt, ask! That is the only way you can know if you are comparing
apples to apples.
Q: Don't all builders build the same? I mean, we pay permit fees to get
building inspectors to inspect houses as they are being built. The Building
Department wouldn't let them pass inspection if they were defective, right?
A: The ranks of homebuilders are as different as the general population. Some are
particular, others are not. Some actually spend time on the job, others delegate, or
hardly ever visit the job at all. We are all required to adhere to the building code but
that is about all. The building code covers health and safety issues only, and that is
what building inspectors must look for; compliance with basic health and safety
issues. Inspectors want to know only if your stairs are built safely, not whether they
look good. They check that your heating system works and doesn't pump carbon
monoxide into the house. They don't care if it heats inefficiently or will break down in
Q: I've notice several different subdivisions offering a list of "Preferred
Builders." What does this mean?
A: Many new developments have what they called "Preferred Builders." In a business
notorious for behind the scenes deals this is another big one. In almost all cases the
preferred builder is nothing more than a builder who has bought in to the project in
some way. This does not necessarily make him a bad builder but it does put him in
the position of having to recoup his investment, at least in some part, from you!
Q: Is there such a thing as a standard construction contract?
A: The 'Good old days' when construction agreements were made on a handshake
are long gone. Todays homes are bigger, more complex, and much more expensive.
The contract you use to govern the construction of your 'Dream Home' may very well
decide whether it turns into a nightmare.
At Curtis Graf Homes we believe that a contract should protect both parties.
Additionally, we believe that a well written contract promotes communication and
fosters trust between Builder and Client.
There are two main categories of prime construction contracts; "Lump Sum" and
"Time and Materials." Within these two, however, there are a myriad of variations. In
a Design-Build contract your builder also provides in-house design to produce a
package covering everything from concept to completion. Often, you will realize
considerable savings in time and money by using both services from under one roof.
1. Lump Sum
You pay a set price for the house as negotiated and described in your contract
documents which include the actual plans, your agreement, and any other
addendums you may have. That price incorporates the builder's profit and overhead
and all costs associated with the construction. Discounts, rebates, etc. accrue to
the builder as do any other cost savings in the project. On the other hand, the
builder is obligated to pay for cost increases. The prime advantage in this type of
contract is security. The prime disadvantage is inflexibility; specifications must be
completely detailed to obtain accurate bidding.
2. T & M (Time and Materials)
You pay the actual costs of construction plus an agreed upon fee to the builder to
manage, supervise and take responsibility for the project. This fee is usually a
percentage of the total construction cost. The prime advantage to Cost plus
contracts is flexibility. In Park City, where Custom homes are common, owners
have a good idea what they want and like to be involved in the process.
Frequently Asked Questions: