Archive for Building Costs
Why are estimates important?
Why is a detailed estimate so important in today’s building climate?
When a builder gets a complete set of building plans, the builder is expected to give the client a cost estimate or quote as it is commonly referred to.
When I started in the building business, the standard way of estimating a house was to take the lot cost and the cost of “lumber” which at that time encompassed windows, doors, roofing products and other related items, average these costs, use a multiplier, and cost the house. That method outgrew itself in the late 1970s.
I was fortunate to have worked for an engineer from a commercial construction background who taught me to estimate “from the ground up.” His theory was that any size project should be estimated the same way, no matter how large or small. He taught me the necessity of a solid sound estimating system. I still use the same basic format today, except the computer has quickened our methods.
Today there are so many products and choices available to the builder and buyer. It is ever the more important for a detailed estimate and a detailed scope of work or specifications. It establishes a budget that will be used throughout the building of your house or project. If a haphazard or incomplete cost estimate establishes the budget, someone will suffer financially.
I personally feel that every builder should use a detailed take-off system to cost the project. When relying on salespersons and subcontractor take offs, they are subject to that person’s interpretations of items and practices used by that person. Without a detailed take off or your own, you have no way of knowing whether that person is correct or not. When it is time to finalize your project, the salesperson may say, “You asked me to do more than I quoted. Get the quote and see what I estimated as compared to what I put in the house.” It is always the other person’s fault. A good take off of your own could have prevented this, as it would have red-flagged the difference in your estimate and theirs.
We all are much happier in the end when we have established a sound estimate. If you, our client is satisfied, we get to build that second or third house. And that keeps us in business.
Share on FacebookIs price the only thing that matters?
We’ve definitely seen business pick up recently and are ecstatic about the seven bids we currently have out. Some of the builders we’re bidding against are licensed contractors—but some are not. As more and more people start thinking about home additions, remodels, or custom builds this spring, we wanted to remind everyone how important it is to not focus entirely on price. Quality is just as important when it comes to your home.
I wanted to list a few reasons why you should consider choosing someone like us, instead of the cheapest bid you receive. After all, you want the best price, but you want your home to last a lifetime.
- We’ve been in the building business since 1974, and have weathered many storms in our industry.
- We know the current design trends, but we also know what stands the test of time.
- Our homes have the features required for Energy Star Rating. In fact, one Energy Star rater said to us, “You had one of the best tests we have ever seen in this size house.”
- Our staff has been with us for several years including many of our subcontractor teams, which have been with us since the mid 1970s.
- We have many repeat customers and a list of references we can share with you.
- We give you detailed specifications and costs that let you make informed decisions about your project. YOU help create the budget.
- We truly are a custom builder/remodeler, in that we do not just use our “canned” plans, but help you create your dream plan.
Do your homework when it comes to selecting a custom home builder or remodeler. Use a Registered Builder or Registered Remodeler. We would love to bid your job, but remember, we won’t compromise quality just to bid the lowest price. We will, however, try to help get your project within your budget.
A Screencast of our Advanced Estimating Program at PL Lyons
We get a lot of questions about our advanced estimate. We get questions from customers, from subcontractors and from other builders. We’ve been teaching the Advanced Estimating class at the Home Builders Association of Louisville for several years partly because of our estimating program. This quick video gives you a glimpse into how we use our estimate to drill down to every area of a custom building or remodeling project. We’d love to answer your questions about our estimate. Leave them in the comments below or feel free to use our online contact form. We’d also love to estimate your project, but I’m sure you knew that already.
You can enlarge the screencast tutorial video by clicking the bottom right button to full screen mode. You can exit by clicking the esc button.
Share on FacebookBuilding a custom home- get an estimate not a guestimate.
What do you mean estimate verses “guestimate”?
An estimate for a construction project is arrived at much like an estimate for your car repair after an accident. You list the parts and labor and give an estimate. With one huge exception: the construction estimate does not have a standardized cost manual like the automotive repair center does. Additionally, there are many more products to define for the end cost. For this reason, you must be sure that your building contractor is giving you a good detailed estimate, and not just a “guestimate”.
A detailed estimate will always have “take off” information that drives the list of final costs. If you get a lump sum cost for your project, ask your builder for an itemized list of costs that produces the final number. Ask for the details that define the itemized list of costs. This assures a detailed estimate, and most likely a pleasing and enjoyable final result.
If someone quotes a per foot price, beware! There are no details tied to that figure, and something as small as a faucet or specified window manufacturer can alter the per foot price by thousands of dollars.
Download our detailed cost estimate here.
Share on FacebookGuestimates or Estimates
If you’re in the market for a custom home, which I know there are still a few of you out there. Then make sure you pick a custom builder who does estimates and not guestimates.
What’s the difference you ask? Just several months of arguments over costs and fights about change orders. If your custom builder doesn’t have his costs added up, then somebody will pay for the extras. Will it be you or them?
Reminds me of a verse in scripture. Suppose one of you wants to build a tower. Will he not first sit down and estimate the cost to see if he has enough money to complete it? For if he lays the foundation and is not able to finish it, everyone who sees it will ridicule him, saying, this fellow began to build and was not able to finish. ~ Luke 14:28-30
At P.L. Lyons, Inc. owner Perry Lyons bids every custom home and remodel himself. He takes off the plan and inputs it into his proprietary estimating program. With over 60 pages of detailed costs, formulas and options, the estimate can narrow your buildout down to the last dollar. Customers are walked through the 60 page estimate and are allowed to take the 3-page cost analysis with them. It’s such an impressive system that Perry has been asked to teach the Advanced Estimating course at the Louisville Home Builders Association the last several years.
There are many reasons why using an estimating program is a must. We’ll get into those on future posts. For now just take our word for it.
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