Help! Cost cutting needed

AMRoseMarch 29, 2012

Long time lurker, first time poster here! This would be our first build. It is just my husband & I, and two dogs, no kids (or plans for kids). We want 3 bedrooms up for resale and would finish the basement later. I want a large island in the kitchen (I left a 4x7 island in our last house & miss it terribly).

We had a rough estimate from our builder, which was in line with what I was expecting based off other homes of similar size & features, so we proceeded to negotiate on a lot (a bad idea in retrospect, but husband was anxious & did not want to lose the lot!). We got our firm bid back and it was $50k over the high end of the rough estimate. We cut some things, had it rebid and are still more than $30k over. We were working under a fixed price bid with allowances for some areas. We cannot cut down on the exterior stone as we already have the minimum allowed under the covenants. For what it is worth, we are coming in at a build price of $312,000 (excluding the lot cost). This seems high to me for what we are trying to accomplish, but maybe I am crazy!?!

Some specs & allowance details:

1878 square feet up

9 foot ceilings - main level & basement(walkout)

Andersen 100 windows

Painted millwork

Cabinetry & counters (some granite, no built-ins in living room or mud lockers included) $25,000

Appliances $4k(we would go over here!)

Tile in bathrooms, mud hall & laundry $7,000

Site finished & stained oak on remainder of main level $17,000

Landscaping (includes sprinklers) $8,000

Does anyone see where we could save? Or see how we can fit a large kitchen island, a nice mud space (with laundry connected to the master closet), and 3 bedrooms in less square footage?

Sorry if the dimensions are hard to read. I couldn't figure out how to get the image clearer. There are a few closer views in the photobucket album. Thanks a ton in advance!

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Can you get a bid from another builder?

What month do you plan on breaking ground?

Can you do the landscaping and sprinkler out of pocket that next season. For example, if you break ground in September can you do the landscaping on your own the next March?

Where are you building at? Some areas cost a lot more than others.

You could possible skip the granite. I know...its hard! :)

Or you could do true 8' ceilings in the basement and do web floor trusses to hide the mechanicals. If you preplan where they would go you give the look of a higher ceiling.

are you finishing the basement? maybe you could finish part of it if you are currently doing all of it?

    Bookmark   March 29, 2012 at 1:15PM
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I don't know where you live but that does seem high for a ranch of that size on a basement. I am in GA though so the market here is very low right now.

However, I am in the same position...although a bit different. I want to get under budget so I can do all my upgrades and finish the basement that we HAVE to finish right now do to business and family needs. My builder is coming back with some idea to save money without sacrificing quality. A big savings is if you do part of the house on slab and only a basement where you really need.

The bedroom closest to the bathroom seems too small to be usable. Maybe rework it and you can move the exercise there and move the mechanics so the front right of the basement that is not daylight is a slab.

    Bookmark   March 29, 2012 at 2:08PM
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I should have mentioned that we are in South Dakota. We moved from Iowa about a year ago. Prices for land and homes are higher here, which was a surprise to us.

gingerjenny: Yes, we plan to get some other bids. We were planning to break ground next month (ha!) until we were blindsided by the bid. We could possibly scrimp some more on landscaping. Apparently granite savings would be minimal due to the island size. We are not finishing the basement. We plan to do that on our own later. We already have floor trusses and considered 8' ceilings, which would save $2000, but everyone else has 9' so we would be shooting ourselves in the foot for resale.

gaonmymind: It is frustrating trying to cut! I agree that is a small bedroom in the basement, and I could definitely rework that. I had also thought about putting the front bedroom on a slab, although that would only shave 130 some square feet off the foundation. Not sure how much that would help?

Thanks for the ideas!

    Bookmark   March 29, 2012 at 3:24PM
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I'd get at least 2 more bids before you worried about it. I've got two so far and the first was the most. The second was more than $30K difference. We are building a 2000 sq ft house. The less expensive one also included some of the higher priced ones option so it was really even more than the 30K! same floor plan!

    Bookmark   March 29, 2012 at 8:25PM
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Glad to hear that I shouldn't be too worried before getting more bids. We are going ahead with that this week. Fingers crossed...

We let the owners of the lot know that we couldn't move forward right now. They do construction management and offered to help us (get contractor pricing, line up subs, manage the project, etc). We've had several friends succesfully GC their own houses, so this might be an option for us if we can't get the bid down enough.

    Bookmark   April 1, 2012 at 2:15PM
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It's a lot of money; however, our preliminary bids came in from 400 to 455 from 5 different builders. We narrowed it down to 2 builders and sat down and discussed what was actually going into the home. WOW, that is where we learned that they each had very low prices on all the important things: type of flooring, tiles, cabinets & detail of trim, doors both interior and exterior,even the appliances and lighting. Even though we had sat down with each and told them what we wanted and showed them pictures of the end result--plus we had a preliminary bid list. (we have never built a custom home before--so learning that our preliminary specs--where NOT detail enough!!! And even though we verbally passed onto the builders what we want--we only got priced by the written preliminary specs!!!! Anyway, that is when we realized we needed to go and pick out everything we wanted and have them re-bid it. OMG--we are NOW $596,000.00..... so yesterday we had the first meeting with one of the builders and today the other. We saw with the first builder we can knock away about 10,000 without a problem....but we need to also find big $$$ to knock off--we did NOT want to be anywhere near this amount and was shocked with their final numbers!!! So we are over by 100,000 from what we thought was worse case!!!!! Even the builders have said they were shocked at the prices that they have gotten back from their suppliers...but they say they always are--just have never been that off before???. Building cost is just crazy--and I had NO clue! So I feel your pain! We need to decide if this is possible at this point!

    Bookmark   April 3, 2012 at 7:09AM
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re: jean61

I think it's time you find another builder. It sounds like you have 2 builders that are playing games. They are supposed to be professionals, you explained your wants and needs, and they blow their initial bids to you by 30%-50%! Really?

There is no reasonable way that a $425k house turned into a $600k house with upgraded finishes alone.

Either there are some details you have left out or these guys are not the type of people you want to deal with. Imagine during construction when you realize that you want to make a much will that cost? Or you realize no matter how well you tried to spec the house out there is something you never talked about and the item you want is an upgrade.....a big upgrade? How do you know you are going to be treated fairly?


    Bookmark   April 4, 2012 at 6:13PM
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Well, we got a bid from another builder and it was $26k less than the original bid from the first builder. It's even $8k less than the rebid we did with the first guy were we cut lots of stuff out. So, we feel better that we might be able to make this one work!

jean61: Yikes! That is crazy.

    Bookmark   April 10, 2012 at 10:00AM
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Good for you Rose. Funny how different builders can come up with different bids. Just make sure this builder is a good builder. I think you said you were new to the area. Check out his reputation and look at some of his work and call some of his past clients.

Can't hurt to be cautious.

Just to make you smile. In 1988 we built or first house. 2500 sq ft 1 1/2 story, unfinished basement. No landscaping or deck. Not including land.

Bids came in @ 147 k, 137 k and 117 k. We took the 117 k and our builder was not so hot.

    Bookmark   April 10, 2012 at 11:18AM
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Thanks for the words of caution red_lover. I'm kind of cheap, so I have to be careful not to just go for the lowest price ;)

It's funny because we debated starting with this builder, but thought he would be more expensive! He's been building for way longer than the first guy (20+ years) and we hear fabulous things about him. Not just from his references either - I've talked to people who happened to be outside their homes when I was driving around looking at houses. Yes, I'm the crazy person who stops to question strangers about their house and builder!

    Bookmark   April 10, 2012 at 4:03PM
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Let me tell you how we cut costs. We were getting bids from GC's around $1,000,000 .... which frankly was a shock. We did a lot of research and found the reason for these large numbers.

First, understand we have concrete folks in our family and a great friend who is the best mason in my area. So, we already knew what those costs were. When we compared the mason costs from these GC's to what our mason was telling us it would cost we were shocked. The GC's had their bid for masonry around $125k, our mason was telling us that it would be around $45k. Same deal with concrete. So we assumed the GC's were massively marking up.

What we did. We found a great local GC who has a good reputation for honest hard work in framing, roofing. We offered him a flat fee to be the "project coordinator", gave him the work for framing, finish and roofing and then got our own bids for everything else. We were able to get the cost down to just under $700k***. Our "project coordinator" vetted our subs to make sure they were good, but we had already used our electrician for other work so we already trusted them, we knew our mason and concrete guys very well so the only areas we were unsure of were plumbing, hvac, etc and we used references to find them.

The only area where we screwed up badly was hiring a BAD excavator, we did this before we even found our project coordinator as we had a complete wooded lot and needed trees cleared to get a feel for where the house would go. We got burnt on that deal, but got a new excavator via a reference from our mason and have been very happy ever since.

We are about 2 months away from completion. :)

*** the "just under $700k would have been closer to $600k without the excavator issues.

    Bookmark   April 11, 2012 at 9:39AM
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