Hiring a full time builder to build a custom home

munzer1March 26, 2013

Is it practical to hire an experienced custom home builder for $X/month? Let's say $10,000/month for a year to build my home. He will not be allowed to work on any other home. the builder then can focus 100% on my home only.

I want to build a large custom home in Dallas, Texas area. A custom builder generally works for cost plus. That means his fee is 15% to 20% of the cost of the house. Since I am a technical person and will do a lot of online research and shopping I do not want to pay that high a fee. For a 1.6 million dollar home, in cost plus method, his fee is over quarter of a million dollar.

Your opinion will be greatly appreciated.

Thank you for reporting this comment. Undo
zone4newby

Wait, you want to cut his fee on your job, AND prevent him from working on any others?

Why would you want a builder who would agree to that?

Typically you want a builder who regularly works on projects like yours, because they have relationships with the right subs, and they know what to expect with a home on the scale you have planned. So you want someone who is used to making the typical fee for your home. He probably couldn't afford to take the deal you're proposing.

    Bookmark   March 26, 2013 at 10:50PM
Thank you for reporting this comment. Undo
munzer1

I was thinking how can a builder pay enough attention to my project if he has too many houses to build.

So, you are saying $120K for a year is not sufficient income for him in Dallas area?

    Bookmark   March 27, 2013 at 1:30AM
Thank you for reporting this comment. Undo
cleanfreak0419

A builder will never agree to this.

After a year, what are they to do along with ALL their subs, etc, when someone else has been given the work and they are finished with yours?

    Bookmark   March 27, 2013 at 3:35PM
Thank you for reporting this comment. Undo
zone4newby

Munzer, Do you expect to be paid "enough" or do you expect to be paid what you're worth? You say yourself that builders of homes like yours typically get double what you plan to offer, and aren't restricted from working on multiple homes at once.

Would you agree to work for half your current salary? I'm sure there are people in your community who get by on quite a bit less than you do.

    Bookmark   March 27, 2013 at 3:42PM
Thank you for reporting this comment. Undo
laurajane02

Don't builders need several jobs going at once to keep all of their subs working? We have had different subs working on our house depending on the stage. Whoever does the framing may not be who does the trim.

One of the GC's we considered worked for a flat fee sum. We wouldn't have been his only client. Maybe that's the kind of contract you want? In this situation, we would have paid exactly what everything cost + his $90K fee, so he had no risk of losing money on the bid.

    Bookmark   March 27, 2013 at 5:24PM
Thank you for reporting this comment. Undo
icedC

It sounds like you want a three star Michelin restaurant at an Applebee's price. Let us know how that works out! Sorry, but it does not seem you are being realistic.

    Bookmark   March 27, 2013 at 5:29PM
Thank you for reporting this comment. Undo
worthy

$10,000/month... to build my home.

That's the minimum amount experienced builders have been expecting to make in my market area for higher-end homes for many years now. But for that, you're buying their expertise, not them. You can probably find somebody cheaper who'll stay at your site all day. Drive by Home Depot. I hear that's where they hang out.

    Bookmark   March 27, 2013 at 6:15PM
Thank you for reporting this comment. Undo
virgilcarter

Munzer1 wrote, "..Is it practical to hire an experienced custom home builder for $X/month? Let's say $10,000/month for a year to build my home. He will not be allowed to work on any other home. the builder then can focus 100% on my home only..."

The simple answer is NO! It's not practical, nor realistic. It flies in the face of the way the construction and building industry works. Others have given some of the reasons, above.

There are a couple of common and accepted ways for general contractors to work: 1) A lump-sum, not to exceed, cost for construction; 2) Cost of construction, plus a fee. Each approach has it's own respective strengths and weaknesses. So everyone has to do their own, individual due dilligence to see which may work best for them.

Your project, although important to you, is insufficient to re-invent the way the construction industry works, and the way that reputable, experienced builders function.

It sounds like you need to reassess your construction budget, scale back your house plans and include sufficient expense for an experienced and reliable builder to have an interest in building your house (while also working on other houses).

In these times, you may find someone who's willing to take your deal, but you are unlikely to have a successful ending with whomever takes your proposal. I'd guess, under these conditions, that your project would go off the rails before rough framing is complete. It would probably be doomed before that, but, unless you can evaluate what's going on during construction, phase by phase, you wouldn't know it until it was much too late.

Good luck on your project.

    Bookmark   March 27, 2013 at 6:27PM
Thank you for reporting this comment. Undo
loafer80

Sounds like you want a full time superintendent for your job like commercial projects, but that will cost you on top of the GC or the GC will charge you more for one of his guy to sit at your site all day.

A good GC can focus on multiple jobs at one time and they are experts in organization and construction. That is why it's important to interview and take your time to find the right GC. If any GC taking your proposal, you should run the other way immediately.

The only guy who may take your offer would be someone who typically makes only $120,000 a year for doing mulitple houses. Assuming he does 3 houses, he makes about $40k each and thats 15% for a house of $270k. Do you really want a guy who usually does $270k homes for your $1.6mil house?

    Bookmark   March 27, 2013 at 7:02PM
Thank you for reporting this comment. Undo
GreenDesigns

You don't build a 2M home for 1.6 by cutting the wages of those who build it for you. It's an extremely foolish approach to building such an expensive home.

    Bookmark   March 27, 2013 at 9:15PM
Thank you for reporting this comment. Undo
renovator8

Don't reinvent the wheel. The way to hire a custom home builder is to design the house and then ask multiple builders to be interviewed. Tell them what your concerns are and let them propose a way to make you happy instead of proposing an oddball arrangement they are unlikely to understand or be comfortable with.

    Bookmark   March 27, 2013 at 9:39PM
Thank you for reporting this comment. Undo
athensmomof3

I agree - sounds like you want a full time superintendent. I have had several friends who have gone that route and have opted to pay for one in addition to the builder fee of 10-12 percent (and the superintendents run between 5-7k a month). These are on more expensive homes than you are planning. I think if you are in the area (i.e., not building remotely) it is an expense you can do without if you are willing to be there daily or almost daily yourself to check on things.

    Bookmark   March 28, 2013 at 8:39AM
Thank you for reporting this comment. Undo
munzer1

Reading all these responses and other thread in this forum some time i feel like there are many architect, builders, and subs in this site pushing their agenda.

Current custom home builders, metaphorically speaking are mafia and mobster. Specially, the cost plus builder, basically want the home owner to write a blank check - no question ask. Builders are riff off artist. But unfortunately, that is the way the industry is.

Why should a builder charge me more for his labor and expertise if I am going to chose a marble twice as expensive. Of course, material cost will be double but his expertise, time, and the labor stays the same. But they want more money just because I want to use higher quality of marble flooring, or other similar items.

Imagine, highway toll booths charging according the price of the car you drive.

    Bookmark   April 9, 2013 at 2:08AM
Thank you for reporting this comment. Undo
niteshadepromises

Sounds like you want what someone mentioned above, a flat fee builder. They are rare, but they do exist...so go find one. As for you dictating what other jobs they can take on...I'll have to echo the sentiment of others when they say it isn't realistic and probably wouldn't be the best first impression to impress on any builders you interview by even suggesting it....

    Bookmark   April 9, 2013 at 6:36AM
Thank you for reporting this comment. Undo
millworkman

munzer, ..........................never mind. I will take the high road on this, it is safer.

This post was edited by millworkman on Tue, Apr 9, 13 at 7:51

    Bookmark   April 9, 2013 at 7:50AM
Thank you for reporting this comment. Undo
GreenDesigns

More expensive products have a higher "insurance" requirement. If a trade messes it up, they will have to replace a more expensive product. Thus it has a higher labor rate to install it.

Also, marble has a different rigidity needed for the floor system on which it is to be installed. That is a difference in construction from the ground up through the different products needed to install it over ceramic or porcelain. A floor has to be twice as stiff to install natural stone as for ceramic.

You are NOT going to find a builder who will charge you the same to install luxury products as for builder grade products. If you do, then his whole business model and experience level is suspect. You may end up with cracks, moisture infiltration, and all other kinds of problems.

You really need the guidance of someone who has built an upper end home before. Those people do not come cheap. You don't get filet mignon for the price of a Happy Meal. Nor should you try, unless you are prepared to have it be ruined and not even as well prepared as a decent Happy Meal.

    Bookmark   April 9, 2013 at 9:45AM
Thank you for reporting this comment. Undo
zone4newby

If you think builders are crooks, you shouldn't build.

Building requires a long term relationship with your builder, and given your total lack of respect for builders that's going to go badly. Probably from the start, because any decent builder will sense your opinion of them and decline to work for you.

Buy an existing home.

FYI, my only connection to the construction industry is as a consumer.

    Bookmark   April 9, 2013 at 10:10AM
Thank you for reporting this comment. Undo
theballs

Imagine, highway toll booths only letting one car per day go through.

    Bookmark   April 9, 2013 at 11:24AM
Thank you for reporting this comment. Undo
ohbldr

"Current custom home builders, metaphorically speaking are mafia and mobster. "

Then why not off-shore your custom build and float it over here in sections? A little research will reveal where you can source knock-off products for your 1.5 million custom build at cheap, discounted prices. I hear the warranties and follow-up are outstanding too.

    Bookmark   April 9, 2013 at 3:45PM
Thank you for reporting this comment. Undo
sanveann

This is probably the biggest investment you will ever make. Why would you want to risk the quality by trying to shortchange your builder?

It sounds like building isn't for you, to be honest. It's fine to be cautious, but starting with the attitude that everyone is out to rip you off is just going to make this process miserable for you and everyone else.

    Bookmark   April 10, 2013 at 10:51AM
Thank you for reporting this comment. Undo
NicholasKlein831

Munzer1,

I can explain to you very simply why what you are asking for is not widely accepted on this website or in the construction industry.

If you go to a grocery store, do you tell them how much you will pay for a tube of toothpaste? Of course not. They set the cost. It's all about market value.

If you go to a lawyer for legal services, do you tell them how much they are going to charge you? Of course not. Thy set the cost. It's all about market value.

If you go to a hospital for treatment, do you tell them how much they are going to charge you for treatment? Of course not. They set the cost. It's all about market value.

If you go to a professional assassin to have someone killed, do you tell them how much you'll pay them to off someone for you? Of course not. They set the cost. It's all about market value.

Last one, a perfect explain, initially asked by you, if you go through a toll booth, do you tell them how much you will pay them to let you through? Of course not. THEY TELL YOU HOW MUCH YOU WILL PAY FOR THEIR SERVICES.

Need I say more? Now, you are free to solicit anyone for any cost and that will be your biggest mistake in building homes. Not paying a qualified individual what they're worth to make sure you get what you want. You can hire a cheap dentist, doctor, or lawyer, buy cheap toothpaste, or take the long way around the river to avoid the toll fee, but in the end you will only waste time and money because YOU were too CHEAP, and you were the rip off.

    Bookmark   April 13, 2013 at 7:47PM
Thank you for reporting this comment. Undo
still_waters

Maybe you ought to interview more builders. I interviewed several and found one who priced out the basic build with certain finishes. He was a cost plus. However, he said he wouldn't charge me for my upgrades unless there was extra labor involved.

This same GC stayed on the job the whole time. Although he built high $$$ homes, he didn't overextend himself. His own crew could wear many hats. In fact, whenever I'd meet him it would have to be after 5, after he'd been on the job site all day. He would basically only take on one job at a time.

    Bookmark   April 13, 2013 at 8:08PM
Sign Up to comment
More Discussions
Frank Betz Kensington Park - opinions and any pictures please!
In the Air Force, thinking about building the Kensington...
dnasmith14
Add second story balcony before framing starts
My house's basement foundation will be poured sometimes...
houses14
Well Water
For those of you with well water only. What systems...
Renee0829
Should I add a window in the dining room?
We are going to have a long narrow dining room, husband...
Bridget Howe
Spray Foam in Roof Rafters - Not Sure if it will Help
So my builder wants to spray foam all the rafters in...
TonySak
People viewed this after searching for:
© 2015 Houzz Inc. Houzz® The new way to design your home™