May 6, 2025 • 23 mins
You've dreamed about building your custom home for years, but are you prepared for what lies ahead? Before you break ground, learn why the National Association of Home Builders reports that most people exceed their budgets by 10-20% when building custom homes.
The budget represents just the first of ten critical mistakes homeowners make. Hidden costs lurk everywhere – from utility hookups and site preparation to surveys and landscaping requirements. One particularly confusing aspect is understanding the difference between "heated and cooled square footage" versus "under roof square footage." As our expert Adam explains, a home with 1,700 square feet of livable space might actually have 2,500-3,000 square feet under roof when porches, garages, and other non-heated areas are included. This misunderstanding alone can add $100,000 or more to what homeowners expect to pay.
Your choice of builder might be the most consequential decision you'll make. The builder-client relationship can transform your dream home into either your greatest asset or worst nightmare. While budget constraints and timelines matter, that gut feeling when interviewing potential builders shouldn't be ignored. And never select based solely on the lowest bid – there's usually something missing from that estimate.
Communication forms the foundation of any successful building project. Establishing clear expectations about meeting frequency, acceptable contact methods, and communication hours creates a framework for addressing inevitable challenges. When problems arise, measured responses prove far more effective than emotional reactions that can damage the builder-client relationship and lead to avoidance patterns that ultimately hurt your project.
Whether you're a first-time builder, a DIYer seeking tips, or a contractor looking to grow your knowledge base, this episode provides critical insights to help you navigate the complex journey of creating your dream home without it becoming a nightmare. Subscribe to our podcast and follow us on social media to continue learning how to build better.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The Home Building and Remodeling Show.
Let's go.
Welcome everybody to the HomeBuilding and Remodeling Show.
My name is Chris Kirby and I'llbe your host.
(00:21):
I am the owner of threeconstruction companies on the
Alabama Gulf Coast.
The show is about residentialconstruction.
We're going to cover topics ofhome building and remodeling.
Are you thinking of doing aremodel or building a home?
Are you a contractor looking toimprove your knowledge base or
grow your business?
Have you ever done a remodelproject or built a home?
(00:42):
There were so many things youwish you knew or that you could
have done differently during theprocess.
Then this show is for you.
We break down the process ofbuilding and remodeling and how
to have the best results duringyour project.
Whether you're a DIYer lookingfor tips, someone looking to
hire a contractor to do aproject, or a contractor looking
(01:04):
to expand your knowledge baseor your business, welcome aboard
.
Glad to have you.
Stay tuned.
We kick off the show with mythoughts on home building and
remodeling.
I'll share best practices andtalk about some of our
experiences in business and outin the field.
These shared thoughts andlessons learned are meant to
help you on your very ownjourney.
(01:25):
Let's go Thinking aboutbuilding your dream home.
Don't let it become a nightmare.
Most people will make one ofthese costly mistakes and some
of them will shock you.
Stick around to avoid budgetblowouts, bad builders and
design disasters.
Number one on the 10 biggestmistakes people make when
building a custom home is thebudget.
(01:47):
People don't understand howmuch it costs to build a house.
So the more you can educateyourself and your builder can
educate you on the cost otherthan the construction cost of
the home, the better you'll bethroughout the process.
So let's talk about some of thethings that come up during a
build that make your budget bust, and one of the things that
(02:11):
commonly come up are the costfor utility hookups, such as
sewer connections, waterconnections.
Due to the fact that you're onpublic or private sewer, there
could be costs for well, therecould be costs for a septic tank
.
These are costs that areunassociated with the build that
usually fall on the clientthemselves.
(02:31):
So, for instance, the builderisn't going to be responsible
for making sure that you havethe water connection there.
However, they can help younavigate the process with the
municipality that you live in orthe county that you live in to
make sure that the connection isdone.
They're just not going to payfor it.
(02:53):
It has to be put in your name.
But those are some of the smallthings that can bust the budget
right off the bat.
A couple of other things that wealways see during the process
of a home build is there's alack of contingency in the
budget for changes, and we wantto make sure that you understand
.
You need to set aside somemoney, have some contingency
(03:15):
money for the changes that youwant to make to your home, and
this is important because youget the plans designed.
But the process of doing a homebuild takes a while and
throughout the process you mayhave inspiration or you may see
something else or ideas that youwant for your home and you can
make those changes.
(03:35):
It's just when is the righttime to bring it up, when is the
right time to let your builderknow, and because it is more
costly to do changes at certainstages of the build than it is
earlier in the game.
So the sooner the better is mysuggestion to you.
So another cost I want to talkabout that can bust your budget
or make you go over budget fromthe client side is the site work
(04:00):
.
So this is something that yourbuilder should talk to you about
.
But a lot of times in thebeginning stages, let's just say
you have land that you needcleared or you have to bring in
an extraordinary amount of dirtto get the site ready for
construction.
Those are costs, most time thatare unassociated with the
(04:20):
construction phase and thebuilder.
You're going to have to getsomeone to do those for you.
So, for instance, a treeclearing service, a land
clearing service, a companythat's going to come in and
build that site up a little bit.
Now the builder will beinvolved to make sure that the
elevation and certain things aredone correctly.
A lot of times this isn'tdiscussed up front, but it is
(04:41):
something that you need to beaware of is making sure that the
site preparation.
You have set aside some moneyfor the site preparation.
Those are costs that areassociated with the project but
they're not necessarilyconstruction costs that the
builder is going to beresponsible for.
Another expense you need to beaware of that could bust your
(05:01):
budget is a survey.
So again, these are a lot ofthe pre-construction steps that
are not a part of the buildprocess or part of the
construction process.
The builder may not includethis into the price.
You have to make sure that youhave a survey from a surveying
company and that is arequirement, at least in our
(05:23):
municipality to make sure thatthe site is accurate, that the
house is staked out and that youare benchmarking where your
house needs to go.
That means the elevation anddifferent things are correct and
can be built up to where theyneed to be per code.
This is something that a surveycompany will do and it's
something that you need beforeyou build your house.
(05:45):
Number two on our 10 bigmistakes people make when
building a custom home ischoosing the wrong builder.
And yes, I am a builder, butI'm going to talk about this.
Sometimes the client andbuilder relationship aren't a
match, and so you need to beaware of and understand who
you're working with, and youneed to really vet their
(06:07):
background.
Sometimes it can be as simpleas timelines.
Right, the builder's timelinesand your timeline don't match.
There's a trust factor andexperience.
There's also the type of homethat you're wanting to build.
If you have an ideal home andyou know certain builders have
built these homes, those are thebuilders that you need to talk
(06:28):
to.
Not that a new builder couldnot do the home, but it's just a
history of success in buildingthe style of home that you like.
So make sure that when you aregetting ready to build your home
, one thing I want to make sureof is that you never go with the
cheapest bid.
Not that the cheapest bid meansthere's going to be poor
craftsmanship or the work isn'tgoing to be up to snuff.
(06:50):
However, it does mean thatthere may be something that the
builder or remodeler but in thiscase the builder has forgotten
to put into the bid, and usuallythere's a reason that they're
the cheapest.
Also, that doesn't meannecessarily that you're gonna go
with the highest bid either.
So make sure there's a balance.
This is continuing number two ofour 10 big mistakes people make
(07:14):
.
When building a custom home,your builder is your biggest
asset or your worst nightmare,and the relationship during a
build is the most importantthing, because the communication
and that foundation from thebeginning, picking the right
builder is super important andmost of the time, there is a gut
feeling associated with pickingthat person.
(07:34):
However, due to constraints inthe budget, due to constraints
in the timeline, it may notmatch up, not match up, and so
you choose somebody based onthose requirements instead of
that gut feeling you have whenyou interviewed what you felt
like was the right builder or agood builder for you and your
project.
I would say, if you can wait orif you can figure the budget
(07:56):
piece out, go with the builderthat you feel the best about.
Number three on the 10 biggestmistakes people make when
building a custom home is poorcommunication.
So this is something thatyou're going to hear.
It should be on all top 10lists Communication over
communicating.
I say over communicating likeit's a bad thing, but it's a
(08:18):
good thing.
You want to make sure that yourbuilder is communicating with
you at a frequency that you'vedecided on from the beginning.
Make sure that there are setmeetings, there are set dates
and there are set dailycommunication parameters.
What I mean is in the contractthere should lay out some sort
of a communication timeline anda medium.
(08:41):
Are you going to allow emails?
Are you going to allow text?
Is there a certain start andstop time of the day that
they're going to do work?
Is there a certain start andstop time to even communicate
with the builder or the buildercommunicate with the client?
And the reason I say this isbecause this is twofold.
Communication goes both ways.
(09:01):
The builder should always becommunicating the task list, the
completion, the priorities, thedelays, the budget, all of
these things.
They should be communicating toyou, the client, that stuff on
a daily basis.
However, the timing of thatcommunication could affect the
entire build.
(09:22):
If they're letting you knowthese things at after eight
o'clock, let's just say on aweeknight, probably not the best
idea.
So I know it sounds tedious toreally have to talk about these
things, but it is very importantto set parameters and also you
have to honor those sameparameters.
During the process of a homebuild, the communication is key.
(09:44):
However, during the process ofa home build, the communication
is key.
However, again, lettingsomething settle before you
communicate with the buildercould help you as the home buyer
, home builder, client, to makesure that you understand that
things happen during a build.
And if you communicate whileemotional or while you're upset,
then something could triggerthe builder and it could turn
(10:07):
into an argument.
So let's just say you do get abad news or a bit of bad
communication or delay orsomething happens in the project
from your builder at 730 atnight.
Okay, they didn't text youafter eight, they didn't call
you after eight.
That was the parameter you set.
How are you going to respond?
Are you going to come back eventhough it's late?
(10:29):
You're upset about the delay.
Are you going to respond to thebuilder in a negative manner
after, outside of the parametersthat you set?
Super early in the morning,super late at night those things
can start to erode therelationship during the process
of a build and if you overstepthose boundaries too many times,
(10:50):
the builder will feel burnt out.
They also will feel like theycan't deliver bad news to you
without a repercussion of youbeing overly emotional or it
makes them want to avoidcommunication, and so they try.
You'll start seeing limitedcommunication from the builder
and that's not what you want.
So again, number three on thetop 10 mistakes people make when
(11:12):
building a custom home is poorcommunication.
And now we move into Shop Talk.
It's the portion of the showwhere I bring in a co-host and
we cover trending topics in homebuilding and remodeling, where
I bring in a co-host and wecover trending topics in home
building and remodeling.
Hope you enjoy.
Let's go All right.
Welcome back for season two ofthe Home Building and Remodeling
(11:32):
Show.
I'm back here with my co-host,adam, and we're going to jump
right.
In Season two we've changed alot of things.
We're going to open it up andhave a little more fun with the
podcast.
We're going to be bringing youdifferent tips and tricks.
We're going to open it up andhave a little more fun with the
podcast.
We're going to be bringing youdifferent tips and tricks.
We're going to talk aboutmistakes.
People make, stuff to avoid whendoing construction.
We're going to bring you thereal stories from not only our
(11:56):
employees and workers and teamhere, but some of the clients
that we work with, some of thevendors, some of the hardships
that we go through, and we'regoing to kick off the season
with the 10 common mistakespeople make when building a
custom home.
The first thing on the list ispeople don't realize how much it
costs to build a home.
(12:17):
So on average and I got thisinformation from the National
Association of Home Builderspeople are going 10 to 20
percent over on their budget andit's so frustrating because
we've been kind of dealing withthis when people are expecting
to get a production budget witha custom home Right and one of
(12:41):
the things that's hard becauseAdam here does all of our
estimating and bidding.
Some people call it a bid, somepeople call it a quote estimate
.
Whatever you want to call it,it has different terms.
But what's been hard for you,as it relates to the budget, and
for the clients.
Speaker 2 (12:59):
Lately I've been picking up on the under roof and
the heat and cool square foot.
Speaker 1 (13:05):
So what do you mean?
So he said the under roof andthe heat and cool square foot.
So what do you mean?
So he said the under roof andthe heated and cooled.
What do you mean by squarefootage under roof and the
heated and cooled square feet?
Speaker 2 (13:14):
So the heat and cooled square foot is all the
space that you have.
Your AC and your heater works.
So your livable space.
Livable space and your heaterworks, so your livable space.
Speaker 1 (13:29):
the rest of it is um like your garage porches and all
that fun stuff.
So and what we've learned is wehad a client that we're we're
working on the budget right nowfor trying to reduce the cost
and they come in with and a lotof clients won't tell us what
their budget is.
So let me tell you if you're,if you're somebody who's
generally interested in buildinga custom home, and you're
(13:51):
listening to this, Be open withyour budget.
Yep, let them know, becausewe're going to give you the
works or, you know, we won'tknow where to even start with
your budget.
This is a custom home, not aproduction home, so it's hard to
just box you in to a number.
So it is it's super importantthat if you know what your
(14:13):
numbers are and I know what itis clients will feel like if
they tell you hey, my budget is$450,000, you're going to come
in at $449,000.
And that's just not true,especially us.
We're not going to come in at$449,000.
Right, and that's just not true, especially us.
We're not going to do that.
Speaker 2 (14:31):
But this client had given us a budget and you were
fighting it hard after thedrawings were done.
Well, in our meeting wediscussed square footage.
Speaker 1 (14:44):
Yeah.
Speaker 2 (14:45):
They told us the square footage, you know, gave
us their budget and we were likeyeah, we can make that happen.
Speaker 1 (14:53):
Yeah.
Speaker 2 (14:54):
But then when we get the plans, the heat and cool
square footage matched what theywere talking about, and then
there was additional 15 or 1700square foot.
Speaker 1 (15:03):
And that's something that I've always struggled with,
Even when I was estimating.
People don't understand that asquare foot price, right, it's
typically based off of thatheated and cooled.
So, hey, I'm getting a 1700square foot house.
It's $200 square foot.
You know, that's 340,000.
Okay, sounds good.
(15:24):
Then you got the plans andthere's another thousand square
foot under roof porches, ascreen porch, the extra garage
space.
All of that isn't heated andcooled but it costs money.
And in your case it was the samething.
We had our, our person, Rob,draw the plans for the client,
(15:49):
our person, Rob, draw the plansfor the client.
And when they got sent to us,you know their square footage
had dang near doubled becausethey had porches and different
things.
So the struggle was we toldthem hey, you know this, this
square foot for your budget isno problem.
Now, all of a sudden, yeah wasdang near $100,000 over, and it
(16:09):
was because of the porches anddifferent stuff.
And so what we're trying tofigure out and what we're trying
to balance is how to make surethe client knows that all of
this stuff costs money.
So you can't say 1,700 squarefoot heated and cooled and then
add all the space, Right,Because that basically makes us
have to, you know, pay for thatportion of the build.
(16:31):
Yeah, absolutely.
And it does become frustratingfrom their perspective because
they're like well, I was told Icould get this square footage
and it's no problem.
It goes back to just knowingwhat things cost and even from
our side, if we know your budget, we could have probably talked
a little bit more about hey,heated and cooled square footage
(16:52):
is and we'll just kind ofgenerally talk about it For us,
you know, $185 and up for heatedand cooled square footage, and
then the other unheated spaces.
They do cost a little bitdifferent.
Right, it's less to build acarport than it is a heated and
cooled space or a bathroom orkitchen, but we still have to
(17:12):
average that in to the totalcost of the budget.
So when you're looking at theplans or home plans online and
you see, typically they give youa breakdown, right, you've got
your main home heated and cooledor living space.
They may say heated and cooledspace or they may say living
space on the plans, and thenthat's going to be, let's just
(17:35):
say, 1500 square feet, and thenyour under roof number may be
2500 square feet, because you'vegot 200 square foot of porches,
a sunroom or a carport or agarage.
You can't lock into that heatedand cooled or living space
number as the square foot ofyour home.
(17:55):
The footprint or the under roofis the number.
What else do you notice in thebudget, because you've been
doing this for a long time,especially on the remodeling
side and more new to the newhome side.
But what are some other thingsthat you notice in the budget
that people don't understand?
That we've been trying tobetter educate people in general
(18:19):
?
Speaker 2 (18:20):
The landscaping.
Speaker 1 (18:21):
Oh yeah, so we started-.
Speaker 2 (18:24):
Because they don't understand that it's code for
you to Do certain things.
Speaker 1 (18:29):
Yeah, yeah.
And what do you mean?
What do you mean by code whenyou say that for people who
don't understand that part.
Speaker 2 (18:34):
Any the dirt that you disturb, you have to cover it
with sod.
Speaker 1 (18:38):
Yeah, you got to basically put it back.
Yeah, you got to put some sortof a permanent setting back and
those are one of those thingswe've actually.
Ultimately, we took it off ofan allowance.
So we used to give them alandscaping allowance and we
went on ahead and moved thatlandscaping portion off and then
now we just do the final gradeand sod and then anything beyond
(19:02):
that.
We're going to connect themwith a landscaper.
I'll go ahead and tell you astory.
We were going to connect themwith a landscaper.
I'll go ahead and tell you astory.
We had a guy in Gulf Shores thatbuilt a house that was a
thousand square foot and endedup with $44,000 worth of
landscaping, and our budget forhis landscaping was I can't
remember if it was $2,500 or$5,000 because it was just for
(19:23):
the side and maybe some straw ormaybe some mulch and I don't
know what.
All he got, but $44,000, youknow, bringing in trees, and so
that was a big lesson for us tolearn.
We really can't control thatmuch variety in a house.
So we took it off theallowances.
Allowances are a big one.
(19:44):
We do fixed fee contracts forthe construction portion and
then we give them allowances.
So that's the credits anddebits, and can you explain a
little bit how that works forour budget.
Speaker 2 (19:57):
So we have a good, better, best portion for our
allowance items.
When we do our interviews wekind of get a feel for where
they want to be with theirdecorative stuff.
So usually everybody kind offalls in the good or better yeah
they want to be Yep.
(20:17):
And then so we give allowancemoney for that.
So let's say you give $500 fora sink, they get a $300 sink and
at the end of the build we'llcredit them back the $200, or
we'll take that $200 and flip itto another allowance they may
be going over on.
Speaker 1 (20:37):
And with that you got to be a little bit careful.
Make sure you document, becausewe'll get to the end of the
build and they'll be like, hey,I had $200 left over on my
exterior door or my front doorand uh, where did that go?
So if you're not tracking those, those numbers, very good.
And what we do now is wedocument it on a change order.
(20:57):
So if they've got a credit andinstead of us writing them a
check for that credit, they wantto move it, we do a change
order to say, hey, I'm movingthe $200 credit I had from my
front door to my tile orcabinets or whatever it is, and
so that way we know where thatmoney went.
(21:17):
That's kind of one of thehardest things on a fixed fee
contract is giving them a setprice for those allowances, and
that's just because things go upand down.
Speaker 2 (21:27):
Yeah, some people like nicer things than others,
and the one that I'm dealingwith right now is pretty cool,
because she told me to puteverything in there, but she's
like, more than likely, after Igo through it all, I'm going to
have you pull it all off andI'll just purchase it myself,
which is okay with us.
Speaker 1 (21:48):
Yeah, yeah it.
Basically you know that's smart, you know, because what that
does is say, okay, because thisis something that aggravates me
and this is why we do an all-inbid or an all-in estimate.
When I say all-in, I mean wegive them our labor costs and we
give them the allowances, likefor a bathroom.
We give them our labor costsand we give them the allowances,
(22:09):
like for a bathroom.
We're going all in the plumbingfixtures and stuff like that.
And the reason we do that is sothey know the actual cost where
other contractors will go inand they will give them a labor
only cost to make themresponsible for the for the rest
of the materials.
The problem is is that thatlabor costs maybe $1,500 for a
(22:31):
shower, but the client's likeman, they're $1,500 for that
shower and you are $10,000 forthe same shower.
Well, that's because we'reincluding all the modern
materials and the allowanceitems, plus the plumber's costs,
plus the electrician's cost ifthere's movement for the lights
(22:51):
and different things.
Thanks for joining us today.
As always, we are grateful forour listeners and your continued
support.
Please subscribe to our YouTubechannel, follow us on social
media via Facebook, instagramand TikTok.
Get more info at our websitewwwthehomebuildingshowcom and,
(23:14):
as always, remember who we arethe Home Building and Remodeling
Show, outro Music.
The Home Building and Remodeling Show.
Let's go.
Welcome everybody to the HomeBuilding and Remodeling Show.
My name is Chris Kirby and I'llbe your host.
(00:21):
I am the owner of threeconstruction companies on the
Alabama Gulf Coast.
The show is about residentialconstruction.
We're going to cover topics ofhome building and remodeling.
Are you thinking of doing aremodel or building a home?
Are you a contractor looking toimprove your knowledge base or
grow your business?
Have you ever done a remodelproject or built a home?
(00:42):
There were so many things youwish you knew or that you could
have done differently during theprocess.
Then this show is for you.
We break down the process ofbuilding and remodeling and how
to have the best results duringyour project.
Whether you're a DIYer lookingfor tips, someone looking to
hire a contractor to do aproject, or a contractor looking
(01:04):
to expand your knowledge baseor your business, welcome aboard
.
Glad to have you.
Stay tuned.
We kick off the show with mythoughts on home building and
remodeling.
I'll share best practices andtalk about some of our
experiences in business and outin the field.
These shared thoughts andlessons learned are meant to
help you on your very ownjourney.
(01:25):
Let's go Thinking aboutbuilding your dream home.
Don't let it become a nightmare.
Most people will make one ofthese costly mistakes and some
of them will shock you.
Stick around to avoid budgetblowouts, bad builders and
design disasters.
Number one on the 10 biggestmistakes people make when
building a custom home is thebudget.
(01:47):
People don't understand howmuch it costs to build a house.
So the more you can educateyourself and your builder can
educate you on the cost otherthan the construction cost of
the home, the better you'll bethroughout the process.
So let's talk about some of thethings that come up during a
build that make your budget bust, and one of the things that
(02:11):
commonly come up are the costfor utility hookups, such as
sewer connections, waterconnections.
Due to the fact that you're onpublic or private sewer, there
could be costs for well, therecould be costs for a septic tank
.
These are costs that areunassociated with the build that
usually fall on the clientthemselves.
(02:31):
So, for instance, the builderisn't going to be responsible
for making sure that you havethe water connection there.
However, they can help younavigate the process with the
municipality that you live in orthe county that you live in to
make sure that the connection isdone.
They're just not going to payfor it.
(02:53):
It has to be put in your name.
But those are some of the smallthings that can bust the budget
right off the bat.
A couple of other things that wealways see during the process
of a home build is there's alack of contingency in the
budget for changes, and we wantto make sure that you understand
.
You need to set aside somemoney, have some contingency
(03:15):
money for the changes that youwant to make to your home, and
this is important because youget the plans designed.
But the process of doing a homebuild takes a while and
throughout the process you mayhave inspiration or you may see
something else or ideas that youwant for your home and you can
make those changes.
(03:35):
It's just when is the righttime to bring it up, when is the
right time to let your builderknow, and because it is more
costly to do changes at certainstages of the build than it is
earlier in the game.
So the sooner the better is mysuggestion to you.
So another cost I want to talkabout that can bust your budget
or make you go over budget fromthe client side is the site work
(04:00):
.
So this is something that yourbuilder should talk to you about
.
But a lot of times in thebeginning stages, let's just say
you have land that you needcleared or you have to bring in
an extraordinary amount of dirtto get the site ready for
construction.
Those are costs, most time thatare unassociated with the
(04:20):
construction phase and thebuilder.
You're going to have to getsomeone to do those for you.
So, for instance, a treeclearing service, a land
clearing service, a companythat's going to come in and
build that site up a little bit.
Now the builder will beinvolved to make sure that the
elevation and certain things aredone correctly.
A lot of times this isn'tdiscussed up front, but it is
(04:41):
something that you need to beaware of is making sure that the
site preparation.
You have set aside some moneyfor the site preparation.
Those are costs that areassociated with the project but
they're not necessarilyconstruction costs that the
builder is going to beresponsible for.
Another expense you need to beaware of that could bust your
(05:01):
budget is a survey.
So again, these are a lot ofthe pre-construction steps that
are not a part of the buildprocess or part of the
construction process.
The builder may not includethis into the price.
You have to make sure that youhave a survey from a surveying
company and that is arequirement, at least in our
(05:23):
municipality to make sure thatthe site is accurate, that the
house is staked out and that youare benchmarking where your
house needs to go.
That means the elevation anddifferent things are correct and
can be built up to where theyneed to be per code.
This is something that a surveycompany will do and it's
something that you need beforeyou build your house.
(05:45):
Number two on our 10 bigmistakes people make when
building a custom home ischoosing the wrong builder.
And yes, I am a builder, butI'm going to talk about this.
Sometimes the client andbuilder relationship aren't a
match, and so you need to beaware of and understand who
you're working with, and youneed to really vet their
(06:07):
background.
Sometimes it can be as simpleas timelines.
Right, the builder's timelinesand your timeline don't match.
There's a trust factor andexperience.
There's also the type of homethat you're wanting to build.
If you have an ideal home andyou know certain builders have
built these homes, those are thebuilders that you need to talk
(06:28):
to.
Not that a new builder couldnot do the home, but it's just a
history of success in buildingthe style of home that you like.
So make sure that when you aregetting ready to build your home
, one thing I want to make sureof is that you never go with the
cheapest bid.
Not that the cheapest bid meansthere's going to be poor
craftsmanship or the work isn'tgoing to be up to snuff.
(06:50):
However, it does mean thatthere may be something that the
builder or remodeler but in thiscase the builder has forgotten
to put into the bid, and usuallythere's a reason that they're
the cheapest.
Also, that doesn't meannecessarily that you're gonna go
with the highest bid either.
So make sure there's a balance.
This is continuing number two ofour 10 big mistakes people make
(07:14):
.
When building a custom home,your builder is your biggest
asset or your worst nightmare,and the relationship during a
build is the most importantthing, because the communication
and that foundation from thebeginning, picking the right
builder is super important andmost of the time, there is a gut
feeling associated with pickingthat person.
(07:34):
However, due to constraints inthe budget, due to constraints
in the timeline, it may notmatch up, not match up, and so
you choose somebody based onthose requirements instead of
that gut feeling you have whenyou interviewed what you felt
like was the right builder or agood builder for you and your
project.
I would say, if you can wait orif you can figure the budget
(07:56):
piece out, go with the builderthat you feel the best about.
Number three on the 10 biggestmistakes people make when
building a custom home is poorcommunication.
So this is something thatyou're going to hear.
It should be on all top 10lists Communication over
communicating.
I say over communicating likeit's a bad thing, but it's a
(08:18):
good thing.
You want to make sure that yourbuilder is communicating with
you at a frequency that you'vedecided on from the beginning.
Make sure that there are setmeetings, there are set dates
and there are set dailycommunication parameters.
What I mean is in the contractthere should lay out some sort
of a communication timeline anda medium.
(08:41):
Are you going to allow emails?
Are you going to allow text?
Is there a certain start andstop time of the day that
they're going to do work?
Is there a certain start andstop time to even communicate
with the builder or the buildercommunicate with the client?
And the reason I say this isbecause this is twofold.
Communication goes both ways.
(09:01):
The builder should always becommunicating the task list, the
completion, the priorities, thedelays, the budget, all of
these things.
They should be communicating toyou, the client, that stuff on
a daily basis.
However, the timing of thatcommunication could affect the
entire build.
(09:22):
If they're letting you knowthese things at after eight
o'clock, let's just say on aweeknight, probably not the best
idea.
So I know it sounds tedious toreally have to talk about these
things, but it is very importantto set parameters and also you
have to honor those sameparameters.
During the process of a homebuild, the communication is key.
(09:44):
However, during the process ofa home build, the communication
is key.
However, again, lettingsomething settle before you
communicate with the buildercould help you as the home buyer
, home builder, client, to makesure that you understand that
things happen during a build.
And if you communicate whileemotional or while you're upset,
then something could triggerthe builder and it could turn
(10:07):
into an argument.
So let's just say you do get abad news or a bit of bad
communication or delay orsomething happens in the project
from your builder at 730 atnight.
Okay, they didn't text youafter eight, they didn't call
you after eight.
That was the parameter you set.
How are you going to respond?
Are you going to come back eventhough it's late?
(10:29):
You're upset about the delay.
Are you going to respond to thebuilder in a negative manner
after, outside of the parametersthat you set?
Super early in the morning,super late at night those things
can start to erode therelationship during the process
of a build and if you overstepthose boundaries too many times,
(10:50):
the builder will feel burnt out.
They also will feel like theycan't deliver bad news to you
without a repercussion of youbeing overly emotional or it
makes them want to avoidcommunication, and so they try.
You'll start seeing limitedcommunication from the builder
and that's not what you want.
So again, number three on thetop 10 mistakes people make when
(11:12):
building a custom home is poorcommunication.
And now we move into Shop Talk.
It's the portion of the showwhere I bring in a co-host and
we cover trending topics in homebuilding and remodeling, where
I bring in a co-host and wecover trending topics in home
building and remodeling.
Hope you enjoy.
Let's go All right.
Welcome back for season two ofthe Home Building and Remodeling
(11:32):
Show.
I'm back here with my co-host,adam, and we're going to jump
right.
In Season two we've changed alot of things.
We're going to open it up andhave a little more fun with the
podcast.
We're going to be bringing youdifferent tips and tricks.
We're going to open it up andhave a little more fun with the
podcast.
We're going to be bringing youdifferent tips and tricks.
We're going to talk aboutmistakes.
People make, stuff to avoid whendoing construction.
We're going to bring you thereal stories from not only our
(11:56):
employees and workers and teamhere, but some of the clients
that we work with, some of thevendors, some of the hardships
that we go through, and we'regoing to kick off the season
with the 10 common mistakespeople make when building a
custom home.
The first thing on the list ispeople don't realize how much it
costs to build a home.
(12:17):
So on average and I got thisinformation from the National
Association of Home Builderspeople are going 10 to 20
percent over on their budget andit's so frustrating because
we've been kind of dealing withthis when people are expecting
to get a production budget witha custom home Right and one of
(12:41):
the things that's hard becauseAdam here does all of our
estimating and bidding.
Some people call it a bid, somepeople call it a quote estimate
.
Whatever you want to call it,it has different terms.
But what's been hard for you,as it relates to the budget, and
for the clients.
Speaker 2 (12:59):
Lately I've been picking up on the under roof and
the heat and cool square foot.
Speaker 1 (13:05):
So what do you mean?
So he said the under roof andthe heat and cool square foot.
So what do you mean?
So he said the under roof andthe heated and cooled.
What do you mean by squarefootage under roof and the
heated and cooled square feet?
Speaker 2 (13:14):
So the heat and cooled square foot is all the
space that you have.
Your AC and your heater works.
So your livable space.
Livable space and your heaterworks, so your livable space.
Speaker 1 (13:29):
the rest of it is um like your garage porches and all
that fun stuff.
So and what we've learned is wehad a client that we're we're
working on the budget right nowfor trying to reduce the cost
and they come in with and a lotof clients won't tell us what
their budget is.
So let me tell you if you're,if you're somebody who's
generally interested in buildinga custom home, and you're
(13:51):
listening to this, Be open withyour budget.
Yep, let them know, becausewe're going to give you the
works or, you know, we won'tknow where to even start with
your budget.
This is a custom home, not aproduction home, so it's hard to
just box you in to a number.
So it is it's super importantthat if you know what your
(14:13):
numbers are and I know what itis clients will feel like if
they tell you hey, my budget is$450,000, you're going to come
in at $449,000.
And that's just not true,especially us.
We're not going to come in at$449,000.
Right, and that's just not true, especially us.
We're not going to do that.
Speaker 2 (14:31):
But this client had given us a budget and you were
fighting it hard after thedrawings were done.
Well, in our meeting wediscussed square footage.
Speaker 1 (14:44):
Yeah.
Speaker 2 (14:45):
They told us the square footage, you know, gave
us their budget and we were likeyeah, we can make that happen.
Speaker 1 (14:53):
Yeah.
Speaker 2 (14:54):
But then when we get the plans, the heat and cool
square footage matched what theywere talking about, and then
there was additional 15 or 1700square foot.
Speaker 1 (15:03):
And that's something that I've always struggled with,
Even when I was estimating.
People don't understand that asquare foot price, right, it's
typically based off of thatheated and cooled.
So, hey, I'm getting a 1700square foot house.
It's $200 square foot.
You know, that's 340,000.
Okay, sounds good.
(15:24):
Then you got the plans andthere's another thousand square
foot under roof porches, ascreen porch, the extra garage
space.
All of that isn't heated andcooled but it costs money.
And in your case it was the samething.
We had our, our person, Rob,draw the plans for the client,
(15:49):
our person, Rob, draw the plansfor the client.
And when they got sent to us,you know their square footage
had dang near doubled becausethey had porches and different
things.
So the struggle was we toldthem hey, you know this, this
square foot for your budget isno problem.
Now, all of a sudden, yeah wasdang near $100,000 over, and it
(16:09):
was because of the porches anddifferent stuff.
And so what we're trying tofigure out and what we're trying
to balance is how to make surethe client knows that all of
this stuff costs money.
So you can't say 1,700 squarefoot heated and cooled and then
add all the space, Right,Because that basically makes us
have to, you know, pay for thatportion of the build.
(16:31):
Yeah, absolutely.
And it does become frustratingfrom their perspective because
they're like well, I was told Icould get this square footage
and it's no problem.
It goes back to just knowingwhat things cost and even from
our side, if we know your budget, we could have probably talked
a little bit more about hey,heated and cooled square footage
(16:52):
is and we'll just kind ofgenerally talk about it For us,
you know, $185 and up for heatedand cooled square footage, and
then the other unheated spaces.
They do cost a little bitdifferent.
Right, it's less to build acarport than it is a heated and
cooled space or a bathroom orkitchen, but we still have to
(17:12):
average that in to the totalcost of the budget.
So when you're looking at theplans or home plans online and
you see, typically they give youa breakdown, right, you've got
your main home heated and cooledor living space.
They may say heated and cooledspace or they may say living
space on the plans, and thenthat's going to be, let's just
(17:35):
say, 1500 square feet, and thenyour under roof number may be
2500 square feet, because you'vegot 200 square foot of porches,
a sunroom or a carport or agarage.
You can't lock into that heatedand cooled or living space
number as the square foot ofyour home.
(17:55):
The footprint or the under roofis the number.
What else do you notice in thebudget, because you've been
doing this for a long time,especially on the remodeling
side and more new to the newhome side.
But what are some other thingsthat you notice in the budget
that people don't understand?
That we've been trying tobetter educate people in general
(18:19):
?
Speaker 2 (18:20):
The landscaping.
Speaker 1 (18:21):
Oh yeah, so we started-.
Speaker 2 (18:24):
Because they don't understand that it's code for
you to Do certain things.
Speaker 1 (18:29):
Yeah, yeah.
And what do you mean?
What do you mean by code whenyou say that for people who
don't understand that part.
Speaker 2 (18:34):
Any the dirt that you disturb, you have to cover it
with sod.
Speaker 1 (18:38):
Yeah, you got to basically put it back.
Yeah, you got to put some sortof a permanent setting back and
those are one of those thingswe've actually.
Ultimately, we took it off ofan allowance.
So we used to give them alandscaping allowance and we
went on ahead and moved thatlandscaping portion off and then
now we just do the final gradeand sod and then anything beyond
(19:02):
that.
We're going to connect themwith a landscaper.
I'll go ahead and tell you astory.
We were going to connect themwith a landscaper.
I'll go ahead and tell you astory.
We had a guy in Gulf Shores thatbuilt a house that was a
thousand square foot and endedup with $44,000 worth of
landscaping, and our budget forhis landscaping was I can't
remember if it was $2,500 or$5,000 because it was just for
(19:23):
the side and maybe some straw ormaybe some mulch and I don't
know what.
All he got, but $44,000, youknow, bringing in trees, and so
that was a big lesson for us tolearn.
We really can't control thatmuch variety in a house.
So we took it off theallowances.
Allowances are a big one.
(19:44):
We do fixed fee contracts forthe construction portion and
then we give them allowances.
So that's the credits anddebits, and can you explain a
little bit how that works forour budget.
Speaker 2 (19:57):
So we have a good, better, best portion for our
allowance items.
When we do our interviews wekind of get a feel for where
they want to be with theirdecorative stuff.
So usually everybody kind offalls in the good or better yeah
they want to be Yep.
(20:17):
And then so we give allowancemoney for that.
So let's say you give $500 fora sink, they get a $300 sink and
at the end of the build we'llcredit them back the $200, or
we'll take that $200 and flip itto another allowance they may
be going over on.
Speaker 1 (20:37):
And with that you got to be a little bit careful.
Make sure you document, becausewe'll get to the end of the
build and they'll be like, hey,I had $200 left over on my
exterior door or my front doorand uh, where did that go?
So if you're not tracking those, those numbers, very good.
And what we do now is wedocument it on a change order.
(20:57):
So if they've got a credit andinstead of us writing them a
check for that credit, they wantto move it, we do a change
order to say, hey, I'm movingthe $200 credit I had from my
front door to my tile orcabinets or whatever it is, and
so that way we know where thatmoney went.
(21:17):
That's kind of one of thehardest things on a fixed fee
contract is giving them a setprice for those allowances, and
that's just because things go upand down.
Speaker 2 (21:27):
Yeah, some people like nicer things than others,
and the one that I'm dealingwith right now is pretty cool,
because she told me to puteverything in there, but she's
like, more than likely, after Igo through it all, I'm going to
have you pull it all off andI'll just purchase it myself,
which is okay with us.
Speaker 1 (21:48):
Yeah, yeah it.
Basically you know that's smart, you know, because what that
does is say, okay, because thisis something that aggravates me
and this is why we do an all-inbid or an all-in estimate.
When I say all-in, I mean wegive them our labor costs and we
give them the allowances, likefor a bathroom.
We give them our labor costsand we give them the allowances,
(22:09):
like for a bathroom.
We're going all in the plumbingfixtures and stuff like that.
And the reason we do that is sothey know the actual cost where
other contractors will go inand they will give them a labor
only cost to make themresponsible for the for the rest
of the materials.
The problem is is that thatlabor costs maybe $1,500 for a
(22:31):
shower, but the client's likeman, they're $1,500 for that
shower and you are $10,000 forthe same shower.
Well, that's because we'reincluding all the modern
materials and the allowanceitems, plus the plumber's costs,
plus the electrician's cost ifthere's movement for the lights
(22:51):
and different things.
Thanks for joining us today.
As always, we are grateful forour listeners and your continued
support.
Please subscribe to our YouTubechannel, follow us on social
media via Facebook, instagramand TikTok.
Get more info at our websitewwwthehomebuildingshowcom and,
(23:14):
as always, remember who we arethe Home Building and Remodeling
Show, outro Music.
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