Insights into Project Costs when Selecting a Home Builder

If you’re doing a remodel or building a new house, choosing your builder is an important decision. After all, you’ll be living with your home and all of its details and workmanship for years to come. You will likely also be working with this builder for months, so you’ll want a construction team that works well with you throughout the project.

This article addresses how to make sense out of project costs or competitive bids so you can make the best informed decision. 

Common questions asked in interviews

In an earlier blog we listed some questions that you could ask builders. When we are interviewed by homeowners, many people will ask these good questions:

“Have you done a project like this before?”

“How long will it take?”

“What sets you apart from other builders?”

“How much will it cost?”

“When can you start?”

As an aside, some will ask, “Do you use in-house labor or subcontractors?”. With this question, you may not learn much because worker expertise and track record are more important. We use trusted trade partners where we have established strong communications and have gained confidence in their work. 

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Beware of the answers to “How much will it cost?” 

Project costs are important; no one wants to pay more than a fair and competitive price. But you can’t tell much from most cost estimates, especially early in the planning process. Your estimate includes builder assumptions and so your final costs may end up higher or lower.

A great follow up question to a remodeling or new construction estimate is:

“What is included and not included in your price?” 

Or “What are the assumptions that you have made that make up your price?”

If you get back widely-ranging bids from reputable, quality builders, there’s a good chance that the assumptions are quite different.

If you receive two bids, and you find that the price is quite different, we have learned that each builder may not be bidding on “the same project”! For example, assumptions on cabinet finishes can range in price from $10,000 to over $50,000. Other project components can drastically add up to significant cost differences.

Why do cost differences happen? Plans vary in details, depending on how far along the project plans are, or the degree of details that an architect includes. There’s always a set of assumptions that a contractor needs to make. At Hamish Murray Construction Inc., we don’t usually know if we are being compared against another bid, but for us it doesn’t matter as our process is exactly the same to get to our cost estimates. 

We believe that if you are getting bids from similar, reputable builders using the same assumptions, the numbers will come up extremely close to each other. After all, their worker wages, construction materials, trade partner costs and anticipated net profit will be very similar.


Talking to a contractor early can help you manage costs 

You certainly can benefit from a budget early on. Square footage estimates can range quite a bit. $300 -$400 a square foot may be a good initial estimate for planning a quality home project with any quality builder. Your final price will depend on the size and footprint of the house, the complexity of the build, and the quality of the finishes and products you select. Kitchens and bathrooms will have the most expenses per square footage. 

There’s quite a lot a good builder can offer on cost management during the early stages of schematic drawings. In fact, we have had many discussions with homeowners where we were able to point out costs that were not worth the effort. For example, if you want to expand a room by two feet, or open up a load-bearing wall, and the foundation is involved, the costs may not be worth it to you. An architect will also have some insights, yet we often help in these discussions with a client and architect early in the process.  

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How to tell when a home builder has your best interest in mind.   

If costs are similar, how do you decide on the best home builder? We suggest that you ask questions to find out how much the builder will have your best interest in mind. Ask for their opinion on where the construction could be simplified for cost savings while keeping in mind the end result you want. Or ask, “Are there upgrades that I should consider at this time?”. You could also ask about how the builder will communicate and collaborate with you during construction. Notice the builder who is willing to slow down and tell you about your choices on the hidden parts of the house, such as acoustical upgrades that give a solid feel to the home, or home automation upgrades. Make sure you meet the project manager, as often that person will be your main contact during construction.

We would be happy to talk with you about your project or recommend an architect.

We work with independent designers or architects. The advantage of an independent architect is that it gives you the opportunity to choose both the best architect and the best builder for you. 

If you are looking for a few recommendations on architects, we’d be happy to suggest some architects that may be a good fit for you.

At Hamish Murray Construction Inc., we pride ourselves in knowing not just how to build a quality home or remodel, but how to build on schedule and on budget. We would be delighted to talk with you about your project ideas. We seek to bring your home dreams to life, while keeping your project within a realistic budget for you.

Contact us

We’d love to hear from you. Contact us or call us at (503) 460-7203 with questions you have, or to tell us about your home plans.