Wednesday, February 19, 2014


The old saying goes, "you don't know what you don't know." So when you're building that home of your dreams, or remodeling the one you love, how do you know what you don't know? It's a fair question. In today's highly competitive housing market how do you know you're getting what you paid for when half the stuff you are paying for is covered up?

Substantiated rumors are floating around town that builders are using apartment grade plumbing on million dollar homes. But how is the consumer supposed to know about the quality of the pipes being installed behind the walls? When your water lines are decomposing or being eaten by bugs five years down the road its really too late to start questioning the integrity of what your builder is using on your job! And trust me, it happens everyday...

"Specifications don't mean anything in residential construction anymore," groaned one lumberyard vendor recently. Architects may draw it, and structural engineers may specify the materials necessary to make it strong, but some builders are changing lumber grades, product spacing and materials to cheapen costs and improve profit margins. No single construction item is more prone to homeowner deception than lumber. Why? Because ultimately everything is covered up! "Builder are wanting to get through their warranty period (with a homeowner) and that's it - period!" With the abundance of products available to a builder, changing the grading stamp on a ceiling joist, varying the distance between framing members, or even swapping out a specified plywood for OSB (oriented strand board) can make as much as a 10% cost difference in the cost of a framing package. And 10% of the cost of the single largest commodity going in your home can mean thousands of dollars in the builder's pocket!!

On a shorter leash you may not know that the $7,500 allowance your builder gave you for plumbing fixtures needed in your million dollar home will barely do the Master Bath. But you'll figure it out when you go to Ferguson Enterprises to select fixtures for the whole house and spend $25,000! By then the ink will be dry on the contract and it's too late to renegotiate. Can you spell "cost overrun?"

In tight economic times where way too many builders are competing for way too few projects, many believe the name of the game is 'get the contract signed, and make it up on change orders.' Builders feel they can deal with the fallout later. After all, who doesn't build a house understanding that there will be some cost overruns?!!

Recently we were hired to review the specifications for a couple's "dream home" after some problems arose between their builder and the bank. Budgets seemed low, and parts were definitely missing. To be safe we had our guys bid the work. Our estimate was 82% higher than the couple's builder, who, it turns out, had just declared bankruptcy! Forget the dream home, the couple purchased a nice pre-owned and have settled in comfortably.

Sensationalism you say...maybe until it's your project, but then it has a way of becoming all too real.

Disasters such as these can be avoided. Consider these tips before you build or remodel your next home:

  • Build a team of professionals (architect, builder, interior designer, and landscape architect) and empower them with the specific scope of work required. Part of that scope of work needs to be a realistic budget.
  • Challenge the team to not only work with the parameters you've outlined, but also "value engineer" where possible to produce the same product for less money.
  • Demand total accountability and absolute transparency by requiring weekly reports detailing each team member's progress. This type of communication ensures that everyone associated with your project is singing off the same sheet of music.
For more practical tips, pick  up a copy of my book, UnHinged - A Homebuilder's Secrets for Saving Time & Money (Amazon), and my app, BuildCHX (iTunes or Google Play).

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