When pricing your new home, make sure you know what you’re getting

When pricing your new “custom” home with a builder, make sure you know what you’re getting. Not all builders price the same way. Some methods are just plain scary. Here are a few examples of ways builders price a home.

1) Legal pad and pen:

Something as complicated as a custom home needs more detail than a legal pad with some numbers, unless of course you want to be off budget and in an argument in the middle of the project.

2) Cost Plus:

Another questionable way of pricing homes is what’s called “cost plus”. This means the builder says we’ll buy whatever materials and pay for whatever labor are involved and we’ll add our percentage to the bottom line. Seems transparent. Seems fair. Nice gig for the builder, and sometimes the customer thinks it’s good for them. Here is the problem. No accountability to a budget. That $375,000 home just came in at $450,000. Whoops!

3) Options, Options and Options

Nothing really wrong with pricing this way, but it really shouldn’t be lumped in with custom building. I’d call it semi-custom. You can get a great house this way, but you won’t get a custom home with the little nuances and intricacies that were so important to you in the dream phase. You also will have a tougher time staying on budget not knowing where all the dollars go for each individual decision.

4) Price per Sq Ft

This one can be as bad as the legal pad and pen. Because it seems more quantified and you hear the terms thrown around very loosely. What do we mean? Well let’s say for example you and I are trading homes. We base a fair trade purely on the square footage. I have 3400 sq/ft and you have 3400 sq/ft. Deal? You suddenly are filled with questions right? Does your home have double hung windows, mine does? The windows alone can add $8 to $10 cost per sq/ft. What about granite tops? Is there custom cabinetry or just stock cabinets? How many HVAC units? What area are you located in? Is your exterior siding, hardiplank or brick? Still want to trade? Still want to rely on a price per square foot estimate?

5) Our way!

Get a detailed estimate that breaks down the costs for every line item of the home. You may care less where all the dollars go, but this approach creates total transparency from the builder fee all the way down to the price of a splashblock. It also allows you to easily add and subtract upgrades and options while still knowing where your budget stands.

We provide a detailed cost estimate, and you receive a complete set of specifications, allowing you to see what is going into your house, from the foundation to the final cleaning.

See a sample screen recording of our estimate here.

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Finished Covered Deck in Fox Run Subdivision

We had the chance to shoot a couple quick videos today showcasing the end result of a project we began a month or so ago. You can see our initial post here. The first video is a walk through of the covered deck addition in Fox Run Subdivision.

The second video is a quick testimonial about the project.

Have questions?

Have a project like this?

We’d love to discuss it with you. Get the ball rolling by contacting us online today.

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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.

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Custom Basement Finish in Fox Run Subdivision

This weeks video was shot in Fox Run Subdivision in Eastern Jefferson County. Custom lots are available for new building but this particular project was for an existing home we built in the past few years. The features included: a custom built-in entertainment center and wet bar, recess lighting, surround sound, a lower level bedroom, walk in closet, custom bath with granite counter and a beautiful tile shower.

If you’re in the market for a custom basement finish, then contact P.L. Lyons Custom Homes today. We’ll get you a firm estimate, finish it in a timely manner, pull the appropriate permits and make it look great when it’s finished.

Stay tuned for next weeks video. We’ll either be shooting a covered deck addition or a customer testimonial.

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Want to remove the wall between your living room and family room?

Does your wife want you to remove that wall between the living room and the family room to make all that space useable? How do you go about finding out if it is structurally and or economically feasible?

You start by calling a professional licensed building contractor. They will know, after visiting your house, whether or not the removal of that wall is structurally feasible. Most builders do this initial consultation for free.

If they advise you that it is structurally feasible, ask if they have ever done this type of work, and what all is involved. If you are satisfied that they could do the project, have a plan prepared to show how the changes would be made. A detailed estimate and a scope of work would be submitted, and you would contract to do the work.

These types of structural changes always require building permits. Depending on your state and locality, only insured and licensed contractors can obtain building permits.

Check to see that your builder is in good standing and that he/she can obtain permits.

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Custom Building From Concept to Completion

We put together this video loop for the recent Trend Home Garden and Remodeling Show. We hope it captures how building a custom home with Perry Lyons of P.L. Lyons Inc is a true concept to completion journey. Enjoy!

We would love for you to bring in your cocktail napkin sketch, sit in our chairs and watch your dream home come together before your eyes. It doesn’t cost a thing for us to give you a ball park estimate. Of course we never leave it that. We do a full and thorough takeoff and estimate before we begin your custom home building or remodeling project. Contact us today at 502-244-0114, email us at perry [at] pllyons [dot] com or contact us online at any time to set an free initial consultation.

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Planning and designing a room addition

Do I need a set of house plans to add the room on the rear of our house?

Planning is an integral part of any process, regardless of what it is. House additions and alterations are no different. Before investing in a set of building plans, you need to first see if you can do what you want. There may be restrictions that will not allow you to add the the addition the way you have it set in your mind.

Some restrictions may be utility easements, subdivision regulations, zoning issues, neighborhood association regulations, and many other types of stipulations. The planning phase starts way before building plans (blueprints) are started. You should always know where your house sits on your property which may require a land survey. This will identify any easements or items that may alter the way you design your addition or remodeling project. You can then get your builder to prepare a plot plan that will allow them to advise regulatory agencies of what your general plans are.

At this point you are finally ready to design the building plans. Your builder should direct you to a qualified draftsman/designer or architect to start the building plans. We highly recommend Pete Nusz Home Design for our projects.

The last step in the process is to turn those finished building plans into official “blueprints” so permits can be pulled and actual construction can take place.

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Home Trend Garden and Remodeling Show Recap

If you stopped by to see our booth at the Home Garden and Remodeling Show then thanks. We participated in the annual event for the first time in several years and we’re glad we did.

Although we’re doing many creative things with our inbound marketing, we still realize you can’t pass on the chance to get your name out in an event of this scale.

We’d like to thank the Homebuilders Association for organizing the event and Trend Appliances for their main sponsorship.

Three reasons we gleaned for getting an annual booth in this event:

1) You get your name out there and you can get a few leads. One lead that turns into a paying customer probably pays for most of the cost. Then the rest of the exposure is just gravy.

2) You get to say hi to all the old faces you’ve done business with over the years. They keep getting older but they also get a little wiser too.

3) You get the pulse on the industry. You can walk around and see who is still in the game, who’s new, and what innovative products catch your eye.

We gave away some Lowe’s gift cards to individuals who signed up for our monthly newsletter. They will be contacted directly via the email address they used to register. We have some more cards for a future contest or promotion.

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Trend Appliances Home Garden and Remodeling Show

If you haven’t made plans yet for this weekend, then schedule a trip to the Trend Appliances Home Garden and Remodeling Show. If you’re considering an addition, a remodel, a hardscape project, or just any little thing to make your home better; then come on out Friday, Saturday or Sunday. You can get all the information on the main promotional site linked above. The show is coordinated by the HBAL and sponsored by Trend Appliances. If these types of improvements aren’t in this years budget, dreamers and planners are welcome too. Come on out and get some ideas for that future project. Then go home and make it a goal.

If all those weren’t reasons enough, then yes coming just to see P.L. Lyons, Inc. is fine as well :) We’ll have a booth focusing on our custom building and remodeling services. We’ll be giving away some freebies each day and we’ll also have some interactive treats for you.

If you have questions then comment below, hit us up on Twitter or contact us online through our form. Of course we still answer email and the telephone too- whatever your communication preference.

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How to stay “alive’ in this wavering economy.

Wavering EconomyI was recently asked by a “younger” builder who has been in the home building business for about 6 years, “How do I stay alive in this economic downturn?”

My answer, “It’s hard”. Those of us that have been here for a while, know that we will face ups and downs in the market. We knew that in tough times like the late 1970’s to early 1980’s, we had to diversify to survive those economic changes. Those times had different challenges, as lending was available, but at peak rates. We paid 18-21% for construction loans, and 30 year mortgage rates were at 14-16%. We ventured into other types of businesses. We got involved in light commercial work, remodeling, and even into other types of retail sales. We did what we had to do to survive.

As for my friend, he has never seen this part of the business, and this downturn is especially difficult. Although 30 year mortgage rates are at an all time low and construction rates remain low, it is extremely difficult to secure constructions loans for speculative building. Even with the all time low 30 year rates buyers are wary, waiting for the economy to strengthen before they buy.

How does the smaller volume builder continue in the next few months, or through the next couple of years? With the new tax credits coming to an end, will our market shrink even more? Did the tax credits help us anyway? As I see it, yes to both. We may not have sold a house to the first time home buyer, but we did sell the customer who sold their house to the first time buyer. Their sale occurred as result of the $8,000.00 new home buyer credit. So yes the credits spurred sales.

With the tax credits drying up, how do we now attract buyers in this lean market? It seems the larger volume builders have a greater advantage, as they can cut their margins, allowing them to out sell the smaller volume builder. They offer “buy down” rates offering 30 year mortgages at below market. They attract the buyer and secure more sales. How do we compete with that?

The smaller volume builder can do the same. Many banking institutions are willing to help with programs like the ones I’ve mentioned, if the end result is them closing an open construction loan and possibly allowing you to start a new project. This helps with cash flow, and relieves your equity in the house. Margins become a bit smaller, but in the long run, it’s a win win win. The builder sells, the buyer gets the “deal of a lifetime”, and the bank continues loaning; therefore continuing to profit.

I told my friend to “work hard and keep the faith”.  As I’ve said before, “these times too shall pass”.

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