There are only two ways to build a home.  We previously discussed the; “Tell me what you want and I will tell you how much it costs” method.  Now I would like to discuss the; “Tell me what you want to spend and I will tell you what you are going to get” method.

Previously we compared building a home to grocery shopping.  You choose the store, the brands, the quantities and when you’re cart is full you pay the cashier.  Your actions and decisions determine what you end up spending.

Today we will look at the opposite approach.  Most families want to stick to their budget.  However it is difficult to fully appreciate how small variances and overages can add up quickly and escalate the costs of their home.

There are 34 accounting subsections in a home construction budget.  If you go over by $1,500 in each budget category, you bust your budget by over $50,000.  Small overages add up quickly and you can get into budget trouble very quickly if no one is watching the project’s accounting.

An example is requesting a wood window upgrade.  Not only do the windows cost more for each unit, there are several other costs that you will incur that are not readily evident.  There will be additional costs for window installation, trimming out the windows, painting the windows and cleaning.  These are all above and beyond costs associated with other window products and can add thousands if not tens of thousands to the cost of a home.

By developing a budget with your builder, he can give you a road map on the decisions you need to make to stay on target.  A builder can give you options in the design, floor plan and amenities of your new home that will help keep you on budget.  By guiding your selections based upon your builder’s guidance, you can minimize the stressful surprises of budget busting change orders.

Another aspect of the building experience is the sales representative (lighting, tile, granite, appliances, etc…) who will encourage you to spend just a little more to “get what you want” of their products.  They will assure you that you can save money on something else further down the line. 

In almost 20 years of building, I have NEVER seen a family cut back their budget in any significant manner to pay for these extras.  Your builder acts as a buffer when you have the urge or are being urged to go over budget.  His motivation is not to sell you an extra light or a more expensive tile but to guide you through the process and keep you as close to your budget as possible.

Building a home is not much different than other large purchases.  You either pick what you want and pay what it costs or stick to your budget and choose from what is in your price point.  With an understanding of these concepts, building your new home can be fun and exciting instead of stressful and confusing.

Thank you for visiting with us at Garabedian Properties.  Please feel free to leave your comments, drop us an email at mike@garabedianproperties.com or call our office at 817-748-2669.  I also encourage you to visit www.garabedianproperties.com to see our entire website.

There are only two ways to build a home.  One is; Tell me what you want and I will tell you how much it costs.  The other is; Tell me what you want to spend and I will tell you what you are going to get.

No secret formulas, no magic spells or google algorithms.  Every home is a compilation of the decisions and specifications of each family.  The more items you select, the more complicated the home, the more difficult the lot and the more detailed the specifications, the more your home will cost.

One of the best examples I can share is a story of two families we built homes for several years ago.  Although both homes were about the same size, the difference in the costs (excluding land, architects, etc..) was over $500,000.  This was a direct factor of the choices each family made in the style, finish out and amenities.  In other words, they told us what they wanted and we informed them the costs to do what they requested.

Another way to illustrate this is by imagining three families taking a trip to the grocery store.  One goes to Central Market (higher price), another to Kroger (mid price) and another to Publix (low price).  They all have similar lists as well as picking up some impulse items.  Even with similar lists, the total for the shopping cart will be higher at Central Market than Publix.  Where they shop, the brands they choose and quantities they select will affect the price they pay at the cashier. 

As the stores serve different markets they, will offer brands and services appropriate to those markets.  Wine at Central Market will be different from the wine sold at Publix or Kroger.  The staffing at the stores and amenities offered will be different as well.  These are all factors families take into consideration when they select a grocery store. 

They would not blame the cashier or store manager if they spent more than they had intended as it was their choices and decisions which are reflected in the total grocery bill.

The same can be said for building a home, your builder is like a personal shopper.  He walks with you through the aisles while you select items off your list.  He can offer suggestions on where to shop, what to put on your list and how many items to select, however, the decision rests with your family.  If your bill at check out (contract) is higher than you had hoped, please know the builder was only following your directions.

Our next post will illustrate the other way to build a home; tell me what you want to spend and I will tell you what you can get.

Please feel free to leave your comments, drop us an email at mike@garabedianproperties.com or call our office at 817-748-2669.  I also encourage you to visit www.garabedianproperties.com to see our entire website.