The Value of a Single-Source Builder

    Professional, market-sensitive builders pride themselves on keeping up with the latest trends in housing design and building products. Those with their fingers on the pulse of what their clients want in a new house are apt to offer buyers plenty of choices. Meanwhile, the company is able to maintain a high level of quality, stay on schedule, keep within the budget, and properly warranty the work and products it supplies.  Occasionally, homebuyers will offer an alternative to a builder's selection of standard and optional features, having learned of it on the Internet, at a home-improvement retailer like The Home Depot, from a home design and remodeling shows, or perhaps via a direct mail solicitation. And while the product may be aptly suited for their house, it may not meet the builder's (and, ultimately, the client's) expectations for long-term performance and affordability.  To truly understand the value of a builder's role in creating a selection of products that go into a new home, consider the following Q&As:

Q: My contract specifies that I need to select certain products and finishes by a certain date. Why is it so important to meet those deadlines?

A:  Builders ask their clients to make selections as early as possible so that they can work with their suppliers and subcontractors to get the products to the job site and installed on time and on budget.  Builders must account for "lead time" (the time it takes to receive a product from a supplier or schedule an installer) or risk paying more for a rush job. 

Q: I received a flyer in the mail from a contractor who says he'll paint my house for a lot less than what my builder quoted, but my builder advised against using him. Why?

A: A lower price doesn't necessary mean a lower cost. Quality builders seek out the best subcontractors (like painters) they can find and  negotiate the cost of their work based on several factors, including  their availability, skills, experience, and ability to meet the  builder's expectations for quality. A low-priced painter may delay or botch the job, causing delays that result in higher overall costs and perhaps requiring a reapplication. Simply, put, he's an unknown to you and your builder, and that's a risk your builder is unlikely to take.

Q: I found a great kitchen faucet at a home improvement store. Can I simply buy it and have my builder install it instead of the one he's offering?

A:  Some builders provide their clients with allowances to purchase certain products (usually finishes, like faucets) on their own. But even then, the builder is likely to send his clients to the showroom of a reliable supplier he knows will carry quality products and install them correctly. An off-the-shelf faucet, even a brand name, carries some risk for the builder, as he must warranty its installation and durability without truly knowing how it will perform in your home. It may also be tricky to install, raising the cost of labor. 

Q: Why does my builder charge more for the exact same light fixture I found online for less?

A: A builder's cost includes more than just the price of an item. It may  encompass the cost to ship and install it, to warranty or service it  should something go wrong, and a nominal markup to cover overhead  costs, insurance, storage, and profit. The bottom line is that your builder is assuming the risks of the products in your home on your behalf, and that service costs a little more. If you insist on using the product for a lower price, prepare to indemnify your builder against those risks.

Q: What is the difference between an option and an upgrade to an allowance?

A: Options, or alternates, are typically priced with the plan such as a bookshelf or different roofing material. Upgrades to allowances occur when a more expensive and/or higher performing product is chosen over the builder’s standard products. Upgrades almost always add to the cost of the house and may add time to the schedule due to possible longer lead times.

Q: What is Energy Star® and why does it add to the cost of my home?

A: Energy Star® is a federally sponsored program initiated by the U.S. Department of Energy (DOE) and the Environmental Protection Agency (EPA) in the early 1990’s to establish standards for energy efficiency among a variety of building and consumer products. In addition to installing higher performing products, builders follow time-tested details provided by research form various building science consortiums. These details and products initially add to the cost of the home, however they offer a reduced monthly cost to use the home as well as provide the opportunity for federal and state tax incentives.

    In order for builders to provide assurances and properly service the products and features of your new home - an expectation every homebuyer has of his or her builder - he must be allowed to control the construction process. While many builders offer plenty of choices, they determine those choices based on extensive research and experience so that they can also offer their clients the most valuable commodity of all: peace of mind.