A cost-plus contract can be advantageous when building larger, custom homes with finish levels and other things changing during the process. With the cost-plus basis, the homeowners know their actual costs on an ongoing basis. They can then determine where they will appropriate their funds early in the construction process and receive a full accounting disclosure of all costs. If they elect to pull out a magnifying glass to search for scratches in all the panes of glass, they can choose to have those panes of glass replaced at their cost.

Usually, doing business on a cost-plus basis keeps the magnifying glass in the drawer. It doesn’t mean the builder builds with less care or quality; it just puts the homeowner and the builder on the same team. A cost-plus contract provides the synergy of identifying problems and determining win/win solutions that are in the best interests of the homeowner.

If you trust that your builder is competent and is working on your behalf, and if you are comfortable not knowing your exact total costs until the end of the project, then a cost-plus contract may be best for you. Your final cost will depend on the choices you make. Your builder will charge a smaller builders fee on a cost-plus basis because he assumes less risk. As part of a cost plus contract your contractor should have a detailed cost estimate before construction begins. As construction progresses you should be given monthly progress reports based on the original estimate, cost to date, estimated costs to finish, any changes to the total cost and the current estimated total cost. This will help to eliminate large surprises in total cost at the end of the project.

Both fixed-price and cost-plus contracts are successfully used in building new custom homes. You can decide which one works best for you.

BOTTOM LINE  …  Choose a cost-plus contract if you are comfortable knowing your end cost will be determined by the choices you make and you know you have a trustworthy builder.

Discussions like these are far from unusual when building a custom home.  They are normal-even essential.  I encourage couples and families to have these discussions as soon as possible so that decisions can be made before a lot of design work is done.  How can you have those discussions and make them productive and even enjoyable?  By using a simple tool called the design outline.

The Design Outline is an excellent tool to help you define your needs and wants in the home building process.  This exercise takes less than 30 minutes to complete, but it can save you countless hours and thousands of dollors.

Here’s how it works;

1.  You and your spouse, independently of each other, each take a blank sheet of paper and write down all of your dreams, wants and needs for your new home, in no particular order.

2.  Then rank your items in order of importance, starting with #1, #2, #3, etc.  It’s not as important to agonize over whether item two goes before item three, or three before two; sometimes wants or needs can be equally important to you.  What’s important here is that #3 and #28 are not reversed.  Know what you want.

3.  Once you and your spouse have independently ranked your items, the two of you meet together to share and compare your lists.  then create one combined list ranking your needs an wants in order.  this will become your master list.

The combined needs/wants list will save time, energy, and money when you meet with your builder to determine the cost of your new dream home.  at some point, your desired budget will need to line up with your desired wants.

Your builder can review this combined list and your budget and let you know what items your budget can afford.  If you have items that are not included in the budget, your builder can estimate a cost so you can make an informed decision on whether or not you want to increase your original budget.

The Design Outline can be a tremendously effective tool to help you determine costs long before you spend money on design or construction of your new custom home.  You can use the Design Outline with any builder, anywhere in the country.  When you begin the process by using the outline, you’ll be way ahead of the game.

Ben A Johnson

B&B BUILDERS INC.

Men sometimes underestimate the importance of this room.  We love our garages, grills, decks, and patios.  But the kitchen?  We can completely miss it’s importance.

It’s important to remember when you are designing a home to consider the resale value and design accordingly.  A well-designed and functional kitchen not only makes the cook happy, it also ensures a greater resale value.

A person who loves to cook or create culinary masterpieces for family and friends absolutely needs a spacious and well-appointed kitchen.  On the other hand, if a cook wants to spend as little time as possible in the kitchen, then your design and layout can be simpler.  Kathy doesn’t spend much time in her kitchen, but she likes the spacious layout so she and her husband can be there together.  Kathy says the chopping and stirring are more enjoyable with her husband there.  Additionally, he likes the organization of a well-planned room.

When selecting kitchen cabinets, look for quality.  This is not the place to be overly consumed with trying to save money.  Well-made cabinets will provide lasting pleasure and functionality for decades.  Drawers (as opposed to cabinets with doors) are more useful and efficient even compared to cabinets with pullout drawers.  In addition, choose hard surface, durable, and high quality countertops.  There are a variety of colors and selections available.  Granite is an ideal counter surface for the most important room in the house.

What about appliances?  Don’t skimp here, either.  You don’t have to purchase the absolute top of the line, but good quality appliances help sell homes.  Today it’s becoming very popular to have two dishwashers.  Often the cost of an additional dishwasher is only slightly more than the cost of the additional cabinetry it replaces.

In order to make the most important room in your house spectacular, consider adding some of these other features: warming drawers, double ovens, convection microwaves, pot fillers, espresso and coffee bars, hidden pantries, elevated dishwashers for easy access, vegetable sinks in the island, and purified water faucets.

When you design your home, be sure the kitchen is given special consideration and that its relationship to other rooms, functions, and features are the best you can provide.  It will make a difference for years to come.

Ben A Johnson

B&B Builders inc.

LOCATION: You’ve heard the adage, “location, location, location.” This is where to spend your money. You could build a home with great design, with great features and finishes, but if you build it in the wrong location or on the wrong lot, you could be in real trouble. Consider purchasing the most expensive lot you can afford. Your long-term investment is more likely to be sound.

DESIGN SERVICE: You can add enormous value to your home by investing in the services of a competent designer and an interior design team. Not only will you enjoy the splendor of a fabulous home, you will find a greater return on the money you spend for these services at the time of resale.

KITCHEN:  Most buyers don’t complain about a kitchen being to large, to much counter space, or to many cabinets.  Spend money on the kitchen.

FAMILY ROOM:  Oversize, don’t undersize, your family room.  Families tend to gather and spend time in the family room.  If you were to oversize any room, make this room a little larger than you think you need.

MASTER BATH:  This room is the owner’s retreat, a place to relax and unwind.  Upgrade your master bath’s size and finishes.  When you sell your home, this will be an important feature and provide a good investment return.

ROOM SIZE:  Make sure your rooms are large enough to meet your needs.  It’s very expensive to come back later and add twelve or eighteen inches to a room because you’ve just realized it’s to small.  If you’re on a limited budget, it’s better to hold of on some of the finishes than cut down the size of your rooms.  You can add finishes later, and the cost may only be slightly higher than if you installed them during the initial construction process.

CLOSETS:  Never underestimate the value of roomy walk-in closet, linen closets, and laundry rooms.

Ben A Johnson, B&B Builders

To read more, contact us about our book “Building A Quality Custom Home, What You Need to Know”

http://bbbuilders.com/company/view-newsletter/newsletter.id/11

See more photos at the link below

http://bbbuilders.com/projects/view/id/43/type/remodel

See more photos at the link below.

http://bbbuilders.com/company/view-newsletter/newsletter.id/7

http://bbbuilders.com/company/view-newsletter/newsletter.id/6

These two remodels show B&B Builders wide range of ability to work with multiple design features and styles.