Over the past few weeks Joel and I really looked at what we were proposing in our house and made a list of things we could cut out and add in later if we choose.  I then revised the house estimate using the best guestimates I could make.  To make those ‘educated’ guesses, I had Matt send us all of the bids he got from the subcontractors.  In reviewing them I was able to see what assumptions they made for our house.  For example – they had really high end kitchen appliances included.  Although I’m not saying I wouldn’t have loved having a chef’s kitchen, I can do without the top of the line range to cook on.  I revised this and other line items to be more in-line with what we (and our pocketbook) could live with.

Making those changes still left our build estimate more than what we wanted to spend.  The next way to get the price down?  Either get some more competitive bids or ask those subs to work within our budget.

We talked with Matt about all of the changes we were proposing to the house as well as the idea of getting cheaper bids from subs this at our 2^nd review meeting.  Matt was surprised to hear some of the choices we made (especially changing the exterior to all white which will significantly reduce the exterior cost of the home).  And he had already been working on contacting subs whose bids he felt were too high!

So for the next 2 weeks, Matt is going to update the estimate to what the new choices actually would cost (since my estimate was just a guess), as well as contact more subs and get their prices within our budget.

Here’s hoping we still can afford the house we want to build!

After work this evening we met with Matt Ruttan (our builder) to discuss our house estimate (finally)!  We’ve been waiting for a while for Matt to put together a true cost estimate to build our house.  To do this, Matt sent out copies of our plans (electronically) to different subcontractors that he would use to build our house.  In return, they sent him bids for what it would take to do the work.  He then compiled them in to what creates our estimate.  Although we could have done this any time, Matt thought it would be best for us to wait until when the subs are less busy which would give us better pricing (ie: when contractors are super busy they increase their price because their demand is so high).  Since we had the time to wait, Matt didn’t get bids until December which is typically a slower month for the construction industry.

Matt compiled our estimate and after adding in 95 different line items from all of the different subs we were over budget…by 25%!!  This was heart breaking!  The home of our dreams was completely unaffordable.

So, now the dirty work – why was it over budget, what made it so expensive, and how can we lower costs?  In my opinion, you need to ask a builder to put together a home bid in one of two ways:

1. Bare bones. Have the builder tell you what’s the cheapest we can get this house built. Then if there’s extra room in the budget, you can ask the builder to add in more expensive things into the house.  Doing so, means that they either have to estimate how much those extras are going to cost, or the builder has to get new bids from his subs.
2. Go for it. Tell the builder everything you could want in the house and then if the price is too expensive (as dreams usually are), the builder will take things out of the budget.

Luckily we chose Option #2 and had the builder go for it.  I say luckily because it gives us lots of areas that we can ‘cut’ from the home to be within our budget.  I had him do Option 2 because it still tells us how much those extras will cost us if/when we decide to put them in sometime in the future.  For example, we had him price out having a built-in buffet in the dining room. Obviously this is something we can live without and it doesn’t affect the overall quality of the home.  Although we’ll cut it now, it’ll be something we can add in later and now we know how much it will cost us!