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Discussion Starter · #1 ·
I am building a 1,735 sq ft ranch in a subdivision with about 150 lots using a general contractor who has built at least 20 or 30 of the 90 or so houses built in the subdivision so far.

At any rate, we walked through one of his recently completed houses. I checked everything I knew to check, and the general workmanship looked very good. The family buying the house who had worked with this GC coincidentally came by while we were going over floor plans in their soon-to-be kitchen. They said that working with him was easy and that he did a fantastic job from start to finish.

This house I am building is in the midwest in a fairly desirable region. The metro-city area has about 200,000 people. I told him I wanted solid hard wood in the foyer, kitchen, and dining area, tile in the master bath and second bath, "thin" granite countertops in the kitchen and bathrooms, etc. He said that he uses Schrock cabinets, mohawk carpeting, armstrong flooring for wood -- all brands that I knew as "middle of the road."

Anyway, his bottom line for the final price was $176,000. I know the lot costs $29,000, so this is a total construction cost of about $147,000, or $85 per sq ft. As someone who isn't involved in the construction world, but knows a little bit, it seemed very low to me given the finishes we agreed on in the purchase contract -- solid hard wood in the foyer/kitchen/dining area, tile in the bathrooms/utility room, vaulted ceilings in the living area/master bedroom/kitchen, jacuzzi tub and so on.

I ran a full background check on the builder -- he has never filed for bankruptcy, never been sued, and has been building/contracting in this town / building for 15 years. Everyone I've talked to who knows the name says he is fine.

Can anyone shed some light on this? If his quote is possible, then will I be seriously limited to the very least expensive options when it comes time to pick the type of hard wood, type of tile, etc?

Any help would be greatly appreciated. Thanks in advance.
 

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Probably good questions for the builder when talking price is also talking options.
 

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I have no idea where you are so I can't answer your question.
If I knew where you are I couldn't answer your question because I don't build there.
If there is 90 other houses in the subdivision there are plenty of comps.
He built 20-30 other houses.... maybe he's getting the hang of it.
If you are still concerned that you aren't paying enough, give him more money. You'll both feel alot better.

btw..the last house I built was $125.00/sqft
no tile
no hardwood

also costs can vary 100% from one region of the country to another.
 

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Discussion Starter · #4 · (Edited)
I have no idea where you are so I can't answer your question.
If I knew where you are I couldn't answer your question because I don't build there.
If there is 90 other houses in the subdivision there are plenty of comps.
He built 20-30 other houses.... maybe he's getting the hang of it.
If you are still concerned that you aren't paying enough, give him more money. You'll both feel alot better.
Haha, I'm sure he'd appreciate that. So I guess you guys are both saying it could be a reasonable price given the variables of location and other factors. I guess that answers my question, I just wanted to make sure it wasn't "scam" cheap.

Also, I should mention that he is carrying the construction loan and "owns" everything until we close as if it were a home sale for a resale property. We just put $1,000 earnest money in the purchase contract, set out the details of the house, and agreed to buy the "to be built" house at the quoted price. But basically, we can back out at any time up to closing and the most we can lose is $1,000. I guess the GC figures if we back out he can just list it and sell it without much hassle.

His comps mostly have basements and I'm on a crawl, but his typical past "sold" comp is about 2,000-2,200 sq ft with a full basement selling for $215,000-$240,000 with the same type of finishes and trim we bargained for on my house, so, whatever that comes out to, that would be the comp.

Location is a suburb of Dayton, Ohio.
 

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You sound like your talking of something that hasn't been built.

So it would be a "pre-built" price the GC is giving you. They can afford to do so and make a profit because they don't have to carry it and foot the expense.

The "how much" question is seldom answered on here for MANY reasons.

Regional costs being 1 of___________.

NO local in profile being 2 of _______________.

And MAINLY you admit to NOT being in construction but"clientofbuilder". So you will mostly get a locked thread and asked to go to the DIY site.
 

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I quickly scanned CL skilled trades and while there seems to be quite a few ads for tradesmen the payscales don't look very lucrative. Not sure what that means given that all most all the ads ask for highly experienced craftsmen. The ads for subs all require all the legalities one would expect of a state steeped in governmental control etc. I'm guessing..but it does sound like a good deal. However..if all your checks and research shows nothing but good report...I don't know what else you could possible do.
Having the other customers show up at just the right time tells me the builder is on the ball.:shifty: But don't let his marketing genius turn you off.
 

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Discussion Starter · #8 ·
I quickly scanned CL skilled trades and while there seems to be quite a few ads for tradesmen the payscales don't look very lucrative. Not sure what that means given that all most all the ads ask for highly experienced craftsmen. The ads for subs all require all the legalities one would expect of a state steeped in governmental control etc. I'm guessing..but it does sound like a good deal. However..if all your checks and research shows nothing but good report...I don't know what else you could possible do.
Having the other customers show up at just the right time tells me the builder is on the ball.:shifty: But don't let his marketing genius turn you off.
Yeah, I definitely thought that that could have been staged, but I have returned to my lot a few times since and these people are constantly at their nearly-finished house. In fact, every single time I've driven past my lot, some member of their family is parked in the driveway.

I went down to the county recorder's office a few times to check into the subdivision, the lot I would be buying, and the records on the lots of the neighbors I would have, and these people are definitely the new owners as of this week, so it checks out.

My theory about the house is that this builder, like any builder who does a few dozen or more houses a year, leverages costs and profits against all the projects he has together and doesn't focus on each individual project, and that could be why my particular house is coming out so low-priced. He is currently building at least 5 other houses that are in some stage or another of construction right now that all exceed $220,000 in the same subdivision and many on the same street.

I think this is like any other company or industry -- the higher the price of the product, the higher the profit margin. Toyota can make up to $15,000 on the sale of one Lexus, while it might make $3,700 on a Toyota Corolla, but needs the high volume sales and cash generated by the Corolla to sustain its business through highs and lows in the economy.

I really do hope this is the case. I have checked virtually every single angle on this, and I suppose if anything doesn't pan out I can always back out before closing. I will be doing an FHA loan, and as part of that with my bank the house has to past three intermediate inspections through different stages of construction, along with the traditional final inspection that I will have done once the house is finished, and then there is a required 3 year warranty. I don't know what else I could possibly do other than wait and see at this point.
 
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