Custom Home Building

wackman

Until now I've only done remodeling and spec homes. I've had a few people ask me to build them a custom home but I always said no. The market was too hot to build a home on someone elses land and let them make the rapid appreciation. Besides the homes were sold before construction was done so there was little risk.

Well I've had some more people ask me this and now I think it's a good idea because I can really limit my risk and for sure have it close when it's done with my profits safely set.

So now I'm putting together a contract to make sure I build the home, with my margins secured, before I instruct them on where and how to get a construction loan, find a lot, have my architect/engineer help them figure out a plan, get permits, etc... just to have them shop me on the build and have some budget, barely english speaking guy cut my price by 25% (I HATE THOSE GUYS).

I'm open to all ideas as to how this could be structured:

A fee for the beginning procedures and then it gets credited if we do the build as well?

A contract at the beginning for the whole process?

multiple contracts for each stage?

How would you do it?

joasis

I wouldn't, for the reasons you listed above. However, I am currently building a small custom, because i wanted to do an ICF home, and yesterday, a guy I barely know came by the job site, looked things over, and asked me to work up a price on his new home....and I told him:

Cost plus 10%, no negotiations. If he does the checkbook on all material purchases ( I pay my subs) and I do labor only, 15%.

If I get it, fine, if I don't, fine...I really don't care.

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Cole

Thats what I do.

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