Built for Success

Quality homes and happy customers don't happen by accident. The best builders have systems to ensure those outcomes.

Rarely does a customer initiate a custom home building project with every product selection already in place and final blueprints ready for building. Design and selection changes, both initially and throughout the project can significantly impact the final cost of the home. However, if you do have a complete set of construction documents, including accurate blueprints and product selections, then material and labor costs will vary only slightly between professional builders.

The majority of the cost difference will rest with the builder's fee, which includes both overhead and profit.

What does that fee cover? And is a lower fee always better?

The important thing to look at is the difference between overhead and profit. Over the course of a project, a builder will incur overhead costs that are not directly related to a specific job, but for which the builder must be compensated. These costs may be things like taxes, licenses, temporary communication, tools, equipment, acquisition of permits, project estimating costs, material quantity requirements, creation of subcontractor scopes of work, management of subcontractor contracts, preparation and tracking of lien releases and insurance certificates, preparation of monthly invoices and supporting documents, management of project selection processes, homeowners' orientation and owner's manual creation, project warranty, safety training, green building training, company vehicle expenses, administrative costs including office space and related costs, insurance other than that charged directly to the client, advertising and professional fees. 

A builder who offers a fixed bid contract will incorporate these overhead costs into their contract as a lump sum, essentially making them a part of the cost of building the home, which is accurate. The client agrees to the contract, knowing that their final price point will not change, but also agreeing that there will be no further changes in design or selection from the time they sign contract.

A builder who invoices based on time and materials will bill the client for everything directly related to the cost of building their unique home, including labor, materials and subcontractor costs, and will show an additional line item for Contractor's Compensation, which is typically a percentage built into the contract. The compensation includes both the overhead costs noted above as well as the anticipated profit for the company. This type of contract allows for some flexibility in design and selection. 

No one goes into business expecting to just break even on cost - everyone expects to make a profit. A professional custom home builder knows they have top notch skills and gifts to offer their clients, providing an elite service that is unique to their company, offering such things as value engineering that can save their clients a significant amount of money - a provision that only the best professional builders are able to offer.

Over time, the professional has fine-tuned strong and effective scheduling and management systems and produces nothing less than top quality work and they expect to be compensated for these strengths.

They have honed in on the ability to find and maintain a consistent crew of highly skilled employees in an industry where the most challenging issue is the shortage of skilled labor. They are well connected to only the very best subcontractors who prefer to work for builders that run well-organized jobs and who pay promptly. They have perfected systems for reducing job-site waste and negotiating fair prices with their suppliers to mitigate the impact of rising material costs. And they have developed quality assurance systems that allow less room for error in all stages of the project. The services they provide in building magnificent homes for their clients do not come without a price tag attached. 

Good builders are in high demand among customers who expect great service and as a result, they command higher fees. We believe it is money well spent.