The Most Frequently Asked Questions in HomeBuilding
1. What type of contract do you operate under? We generally operate on two types of contracts: contract cost or cost plus. Contract cost means we give a total price on the cost of the project. Arriving at this price involves bringing in subcontractors and suppliers who give written bids based on the plans for the project. Any overages on allowances would have been paid on a change order during or at the end of construction and any money left over on allowances would have been credited at closing. Generally, we place allowances on plumbing and electrical fixtures, flooring, countertops, landscaping, hardware, front doors, and paint and texture changes.
On a cost plus contract, a final price of the project is bid the same as in a contract cost project and would include the same allowances. However, there is no profit and overhead figured into the final cost. Within the contract is a provision providing a percentage to be paid to the builder above the cost to build the home. Our percentage on a cost plus contract is typically 12%. Another difference in a cost plus contract is that when the contract is signed, the client will receive a copy of the bid sheet used by the builder to arrive at the cost to build. At the end of every month during construction, we would compile all of the bills from that month, total them, apply 12%, and turn in an invoice to the client. With this invoice, copies of all the subcontractor and supplier invoices for that month are included. Under this arrangement, allowances are guidelines the client would use to determine if they are above or below the estimated cost. Since bills are paid by the client monthly, there is no need for change orders.
We are comfortable working under either type of contract. The decision will be yours as to which type you would be most comfortable working with.
2. Is there a mark-up cost attached to items selected by the Homeowner? Our profit and overhead is taken on the total cost of construction so there is no markup on materials or labor. There are several benefits to using our subcontractors and suppliers (which we will deal with in a later question), but since we are not charged retail cost on items from our suppliers and we do not mark items up, it is typically much less expensive to use our people.
3. How is price per square foot determined? Price per square foot is figured based on the total living space of the project. Put another way, this would encompass the area within the heated and cooled space. So, if the project had a cost to build of $350,000.00 with a total living space (the heated and cooled part of the home, does not include garage, patio, porches, outside living areas) of 3000 square feet, the cost per square foot would be $116.00 per square foot. Because this formula only includes living space, it can be misleading. A home with a 2 car garage and a 10’ by 10’ covered patio will have a much lower cost per square foot than the exact same home that has a 3 car garage with a wrap around front porch and a 30’ by 40’ covered patio. Of course, the type of flooring, fixtures, etc. can also dramatically raise or lower your cost per square foot.
4. Are appliances handled on an allowance? Yes, we give an appliance allowance based on what appliances, brand, and configuration specified on the plans or the client. As with other items, we tend to get better pricing on appliances than what you as an individual can get, and there is no markup from our side.
5. Are you tied to the subcontractors you use, or can the Homeowner suggest someone they would like to perform a certain job? Do you provide a list of subcontractors and suppliers? Many of the subcontractors and suppliers that we have used have worked for Jim Bland Construction for decades. You can be confident knowing that they are the best at what the do, are available on the job site to answer questions, and will stand behind their work after you move into your home. However, this is your home that we are building and if there is another subcontractor or supplier that you have confidence in we would not object to fulfilling that request. We have certainly found some great suppliers and wonderful subcontractors through connections made by our Homeowner’s. At the end the project, we provide the Homeowner with a list of all suppliers and subcontractors who worked on the home as well as their contact information.
6. Once plans are complete, how long for the building process? We project time to build from once the foundation is poured. The reason for this is that weather can be such a mitigating factor prior to getting the foundation out of the ground. Typically, a 3000 square foot home will take 4 – 5 months to complete from the time of slab pour. Of course, weather is always a factor with the time from January to April tending to be the most unpredictable in this area. Summer here is usually quite dry and we typically have few delays during the summer and into the fall.
7. When do finish out products/materials need to be decided—at what point in the process? We have put together a comprehensive Homeowner’s Manual that can be used from the time the plans are completed and through the life of the home. Every item that requires a selection is listed in the order that those selections are needed. The selections are grouped into a time frame. For instance, the first time frame reads: “Items to be selected prior to the start of Framing:”. The first item in this group is “Exterior Doors”. Space is then provided to write in the selection for the front door and patio doors. As the builder, we have a duplicate copy of this selection schedule in a black binder with your name on it. When you make selections, the items are written into your Manual and our black binder thus eliminating any confusion. We will let you know as we are getting close to those time frame milestones. You keep your copy of the Manual and are more than welcome to work ahead of where we are in the process. All selections have space to write your decisions and we will be communicating to make sure our copy matches yours prior to ordering.
8. Is it permissible to purchase hardware, faucets, lighting, etc from an outside source? (i.e.: if you found a light fixture or a sink you really liked in a different city, etc.) Yes, it is certainly OK to purchase items from suppliers that we do not typically use. We’ve actually discovered some very good suppliers from clients doing this. However, we may not get the best pricing from a supplier unfamiliar to us and again we would not know how well they would service the item once it is installed. But, we have used suppliers from all over the country, the internet, etc.
9. When are walk-throughs performed? What is the process? Walk throughs are performed from the framing stage to the end. We will walk with the framer, the electrician, the cabinet maker, the trim carpenter, and the painter. Any other subcontractor can be walked as needed. The process involves contacting you at least five days prior to the walk and establishing a day and time at your convenience. The subcontractors we use have been chosen not only because they are the best at their trade, but also because they are able to work and communicate with our clients. They know you will have their contact information and you are welcome to contact them with questions or concerns during the construction process. Communication is of the utmost importance in this process, and we have no use for subcontractors that will not make time for the needs or concerns of our clients.
10. What energy smart measures do you perform in your standard home? (type of insulation, etc.) We use spray foam insulation with the sealed attic system in almost all of our projects. In some custom projects, we still us blown cellulose insulation if the client does not want to pay the extra cost associated with the foam. For the past several years, we use a minimum of 15 SEER rated HVAC systems with heat pumps and de-humidification. When we do plans for speculative homes, we pay attention to where that east/west axis is and either minimize the windows on those sides if the house is facing north/south, or design large covered patios in the rear and strategically plant trees in the front if the house is facing east/west. Also, in our speculative homes we are replacing incandescent can light bulbs with compact fluorescents, closet lights have been changed to all fluorescents, and we use vinyl clad instead of aluminum windows. As I mentioned earlier, we are looking into using LED bulbs in the future as the cost of these bulbs continues to fall. In subdivisions where we have natural gas it is standard for us to use tankless water heaters, gas stoves, gas starters on the fireplaces with gas logs, and place drops on the porches for gas grills. In custom projects where natural gas is not available, we encourage our clients to install propane gas to receive the benefits of using gas appliances, especially the tankless water heaters.
11. Do you treat the soil for termites before building? Yes, this is a standard, non-negotiable item for us in the same way that engineered foundations are standard and non-negotiable. You will receive a certificate at closing certifying that the treatment was done prior to the slab being poured and outlining the maintenance program.
12. Is a list of all warranties/materials/electrical/plumbing etc. put into a binder/folder as a new home manual for the Homeowner? As mentioned previously, our Homeowners Manual is a large 3-ring binder designed to be the book used to store the warranty, sub-contractor and supplier list, manufacturer’s warranties, appliance warranties, etc. This is in addition to the selection schedule, contract, allowances, and home maintenance tips. As these papers come in, we make copies for our manual and give the originals to you to put in your manual.
13. What kind of insurance do you carry to cover the home during the building process? If house catches fire, for example, does builder ins. or our insurance pay for the damage? We carry a Builder’s Risk policy specific to your home and Worker’s Compensation insurance. If the house catches fire, items are stolen, vandalism, etc., our policy will cover the loss. You do not need to take out your own insurance until we get ready for closing and you to take possession of the home.
14. One of the most important goals of the Homeowner is to make sure allowances are accurate, so the building process isn’t full of surprises. What is the best way to arrive at allowance figures? We very much share your sentiment with this question, and hate the all too familiar practice of using low allowance figures in an attempt to make the bottom line look better at contract. This ends up producing angry clients when they can’t buy all the fixtures they need within their budget. We handle it this way: For flooring allowances, you let us know what type of flooring you want to use (type of wood, tile, carpet, etc.). We then have our flooring supplier bid the plans according to those specifications. We use their numbers to make this allowance so we know it will be accurate. On plumbing and electrical fixtures, the best way to get accurate allowances is to do a dry run with our suppliers. What this means is we take the plans and meet with the suppliers as if we were picking out our fixtures. You’re not bound by any of these choices, but they give us a good figure for each fixture that we can use to set the allowance. This takes a little more time on the front end, but we find that it eliminates those surprises and gives you a good level of comfort in the numbers attached to your allowances. We usually can be very accurate on appliance allowances by getting prices on the types and brands of appliances you want to use. These meetings with suppliers can also be done with your designer if you choose to use a designer. With other allowances such as landscaping and cabinets, the more detail the architect puts into the plans the more accurate we will be with the allowances. The architects we can recommend to you will ask you a lot of questions and spend time on these detail items. They understand that the more information we have, the less we have to use guesswork to arrive at your allowances.
To Our Future Homeowner: We hope that our answers to these questions do not seem long winded or have taken a great deal of time to read through. However, the importance that you have placed in going about this process is very admirable and well thought out. We felt that answering these questions in any other way would be an insult to the care you are taking in choosing your builder.
We would like to again thank you for the opportunity to work with you on your new home. I can say without hesitation that we will build you a home using the best materials available and the finest craftsmen in the area. When we are finished you will have a home you can be extremely proud of and you will have confidence knowing that we will always be available to assist you in any way that we can. I’m sure that many of the answers to these questions will raise additional questions. Please do not hesitate to contact us at any of the numbers below to discuss any further questions.
Scott Bland: 254-644-2969
Jim Bland: 254-744-0037