Wednesday, November 21, 2007

Three bids, and you're out

We made it through a minor milestone this week: the plan, including both the buliding plans and the landscaping plans, we're approved by the subdivision's architectural control committee. The house plan went through with no problems, the landscape plan is approved contingent on appropriate drainage. The next step is to get approval from the village's architectural review board. This step is required before we can get building permits.

I tried to make sure that we had everything necessary done before going to the village. We're hoping to raise the building about 3 or 4 feet higher than the developer initially had in mind for our lot. Why? So we can have a basement with a partial exposure, allowing more light into the basement. Since we're trying to deviate from the builder's master grading plan, I wanted to be sure that we had our ducks in a row ahead of time. We'll see how it goes.

We received our final builder bid last Saturday, so all three bids are in, and the verdict is...undecided. Prices from builders vary from 20% to 50% higher than we want to budget. Although we're disappointed, we're not too surprised. We've spent months researching new home construction techniques, processes, and materials. We asked for some pretty high quality construction, and quality is usually directly correlated with price.

We spent several months talking with builders. Some specialize in custom houses, mainly for the high-end market. Others produce their own line of spec houses--you can have anything you want, as long as you're okay with making small modifications to their stock plans. It took us awhile, but we found builders who specialized in building custom houses for the mid-market. All of them work on a "cost-plus" model, and they were very open with their pricing models. All of them were flexible enough to allow us to do some of the work ourselves to save money. But still, all of them are too expensive.

So now comes the next set of difficult decisions. We certainly can't afford to build a house for 50% more than our budget, so how will we hande this problem?

We have several options:

  • We could modify the plans to remove enough features or square footage (or both) to bring the cost more in line.

  • We could throw out the plan we have, and go instead with a stock model from a builder that is less expensive.

  • We could attempt to go the owner-builder route, where we would be our own general contractor. This would probably also require us to modify our plans and specs to reduce some expense.

There are pro's and con's to each option. At first glance, the first option (modifying the plan) sounds the most logical. But it took us quite a bit of time to get the plan to where it was exactly right for us. Making significant modifications really isn't an option we'd be happy with. The second option would certainly allow us to build, but we'd probably have to settle for something less than what we really want. Since I feel pretty strongly that we can build the house within our budget, Megan challenged me to prove it: now I have to bid on my own house...

So now I'll start getting bids from individual subcontractors. I've started to compile a list of subcontractors and material suppliers, and I'll start asking for bids next week.