Commercial Builder - "necessary" Upgrades?
When dealing with a commercial builder in a subdivision (working with preconstruction houses), what upgrades are best done by subs after the closing, and what should we do through the builder?
Obviously, anything structural (extending the garage and the porch) should be done by the builder, for convenience and consistency if not necessarily for cost...but I'm trying to figure out how to accurately price out other major things like flooring, counters, cabinets, and appliances.
Some conversations I've had on this subject have pointed to requesting a credit back from the builder for all of these non-essential items, and using a sub.
Can anyone tell me about commercial builder profit margins on these types of items, and whether it really is a better idea to DIY?
[addsig]
This all has to do with the time line. If you're having the contractor do the work, this is the way I would go. You might pay a little more, but when the house is delivered to you, you're done.
What I have seen if they will offer grade "b" in the std. price, and then you pay the difference for the upgrade.
Yes, that's how it works - but I've been told/read that you can request a credit back from the builder for any items you plan to install after closing, and I'm wondering whether the bottom line (and quality finished product) is better if I do the DIY thing instead of buying not-quite-great materials at a significant markup from the builder.
I know most folks in this section of the forum build the houses completely autonomously, but surely someone has experience dealing with large residential building companies...?
there is not a set margin. it all depends on the cons. ability to nego. bids from the subs. when not to use the builder depends on your knowledge of work to be done by the subs. if you do not have a working knowledge of material costs, materials needed to complete, fair sub pricing, or how to nego. with subs. stay with the builder....kenmax
If I'm following you, you want to know if when you're dealing with a residential bulder, you should pay for options (upgrades) or just get the basic house product and upgrade it yourself once you own it.
I have always advised new home buyers first, to be cautious about upgrading to make sure they don't over improve the property given the neighborhood values. If the upgrade can be more easily done while the house is under construction, then the builder is the logical one to do it. In my area, builders love it when people choose options because that's where they really get their profit. I can't quote you %'s, but the markup seems high. So where you can, stick with the "base" product.
Just a suggestions, if you are trying to figure out how to accurately price things out, then chances are you don't have enough knowledge to even consider doing some of the work yourself. People have this assumption that building is simple and that builders make a ton of money on every job which is not the case. In any event, perhaps you can do your own painting or something if you'd like to save a little money and purchase your own appliances or whatever. Builders profits range depending on the type of contract you have engaged in. Typically, and this varies from region to region, but in my area builders are charging about 18 - 22% above cost. Keep in mind though this is overhead, profit, and most reputable builders warranty their work. Good Luck.
mandiland,
I just want to clarify something in my post above. If you want to upgrade the property after you own it, I'm not necessarily suggesting that you do the work yourself. Use licensed contractors where the type of work warrants it. Tom is right in that people shouldn't jump in over their heads trying to do construction.
Nancy
How do you get a certificate of occupancy (CO) if the house isn't completed?
A CO is required to close escrow and buy the house.