7 Secrets Your Builder Won't Tell You
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- เผยแพร่เมื่อ 7 พ.ค. 2024
- Some crazy things are happening in the new home construction market these days. In this video we share some of the insider information that consumers should know before embarking on their new home build. Things like builders giving start dates 3-4 years in the future. Marking up costs over 50% and customers finding out their new home build is being cancelled because costs have made the project unprofitable to the builder. All of these things are currently happening and could affect your new dream home build.
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Charging for a quote is fine, but only if that can be applied to the total cost if the customer chooses to go with that builder.
Great video!!! I built in rural towns on speculation.....not gonna say what state....my first house in one town ..hand drawn footprint and front elevation. .approved same day when permit was submitted......when I asked the inspector if he wanted a location inspection before the pour, he said to me " we don't actually do inspections" ....thank you!!!!!! Just a final inspection!!!! All of my homes are still standing ...only ever had one call back on a faulty window!!!!!!
Excellent videos. Thank you for the great information. Favorite channel.
Thanks for confirming what we thought to be true in this market!
Hi Michael, I’m a Structural and Interior Superintendent and thanks to your videos I have decided to plan how to build a house and manage the entire process as well as I do it every day in my job. I have the knowledge and relationships with different trades which I can get better prices for materials and laborers. Also, I already own a lote and where I plan to build one of the houses from this site America’s best house plans. Thank for your tips and motivation.
Great video. Very informative.
Always interesting information.
Very nice tips! Myself, I'm going to wait until the turn of 23 before embarking on a build. Things should loosen up by then.
Hi Michael. Thank you very much
Yes! Always always always select AND ORDER, better yet, HAVE ON SITE or in storage, all fixtures and materials needed.
Great info !
Hello Michael off-topic what’s your opinion on a barndominion style home? To built out here in Phoenix AZ
Good info
These videos are amazing, thank you for your help. Me and my wife bought building plans from Concept Homes for their smallest 2 bedroom building plan. If you have time doing a video might help a lot of people as the material package is quoted around 70k. Thanks!
Thank you for sharing. I am looking to build a duplex with each a unit of 2 bedroom.
Is your course useful for those who want to build a modern home?
We hate Apple for their markups too.
If the builder's labor and material costs are all laid out, and he adds 15% to that, and general prices rise, then his profit total rises with it. He has no other reason than taking advantage of the infamous tight market to charge more. I'm not saying I wouldn't do the same, but I would definitely expect everyone to hate me for it, and I would need to balance the extra money against the hatred. He doesn't get it both ways.
There’s also a lot of nightmares that occur and cost the builder money! Whoever you are! Like micheal says, time is money, failure to plan is planning to fail, hold a contingency fund! We always suggest owners reserve a minimum of 20% (+) to cover costs for unexpected circumstances.
Hey Michael would love to see a comparison video on wood frame vs mason/brick homes in 2022, brick seems like a much superior option in every way at this point, unless I've missed something. Thanks for the awesome information btw.
It's also way too expensive.
Not all regions of the US are compatible with masonry construction.
I have started researching building on my land but application says I need a liscensed contractor. How do I become one ?😊
I’m planning to build Barndominium do you have advice???
Is there a credible school or program that will teach a regular individual how to build a home from beginning to end, step by step?
Do you come to Houston to build basement home?
Hmmm A contract is a binding agreement. Typically, once signed the builder can't cancel simply cancel because his profit margins have eroded. The example cited where builders change start dates to years into the future in an attempt to force clients to agree to void the contract (baring specific language in the contract) does appear to constitute attempted fraud. At the very least it is clearly unethical and dishonest on the part of the builder. Looked at another way, the client isn't allowed to simply walk away months after the contract is signed because they decided it was too much money... On the other hand, the author does highlight one of the reasons why so many "contractors" are held in such contempt by consumers...
Good video. I’ll take small issue with the Apple comparison. Every other Mexican fleeing the home country for better work thinks of joining a construction crew. It’s the ‘I can always do ‘x’ as a fall back. Swinging a hammer well has value in society. However, how many of us say ‘I can always fall back on object oriented programming and build M2 chips to power MacBooks’. My lawncare professionals also think they are worth 70% profit margins. I think not.
Hi Michael, isn’t an owner builder at a disadvantage trying to secure subcontractors and decent subcontractor pricing compared to a builder who uses/provides consistent work to subcontractor. I would like to know your thoughts on how this can erode owner builder savings. Also, what about warranties for subcontractor work - builder vs owner-builder. How does that differ? Maybe a warranty only applies at the production builder level.
As far as the warranty goes, there should be no difference. As for the prices, keep in mind the builders discussed in this video only build 1-12 projects per year and a good chunk of them 1-5. This takes away some of their bargaining power. But yes, I think there can be some erosion in saving for owner builders when doing a single house. But owner builders make that up in other ways which we discuss in detail on this channel in the cost to build videos. One example would be searching for close out products. I have a buddy(not a builder) that got a custom entry door that retailed for $15k for $5k because someone had ordered it and decided they didn’t like it. Or how about the scratch and dent Viking range he got for half off…the scratch wasn’t even visible once installed. I personally found light fixtures on closeout for the Open Book Build prototype home and saved 50%. Builders don’t have the time to mess with this. This is just one example of how owner builders have an advantage.
Agreed, I think that is a significant point, and not saying so in this video gives false hopes to potential DIY people who think they are going to save money. In addition, it's a significant time investment to manage your own build which is what the builder's mark up covers.
I don't see the big discount you think builders get. Unless they are building 100 houses a year.
My framer and roofer gave me same price they charge builders doing 30+ houses.
I also save money as said by bargain shopping.
@@OpenBookBuild Very good point. I have been very lucky and am very savvy when it comes to finding deals. I recently got a brand new range hood for 16 dollars, brand new smart Sylvania bulbs (50 of them) for 25 dollars. Yes that's 50 cents each, they retail for 10 dollars per 2 pack. I got a lot of 15a brand new receptacles for, you ready for it... 500 for 20 dollars. All brand new and modern. As well as 300 plates for 5 dollars. I am building up a lot of small supplies, but I estimate I have paid around 300 dollars for stuff over the last year for when I build my house in future, that would cost around 6,000. A savings of 5,700 is worth it to me because I am not done yet. By the time I am ready to build my house, I'll probably have paid 2-3k worth of stuff and be able to use all of it, and save TENS of thousands of dollars.
I honestly think people should be finding these deals and collecting stuff WAY before they even start the process, because one day you'll save a hell of a lot of money.
What about markups for 2023?😊
Hi Michael, great videos and great information! Really appreciate it. Quick question, would you have any plans for skinny lots, 50’x150’ lots? These are the typical lot sizes in my area. A plan with a 25’ or 30’ face with a drive under garage or even three stories. Thanks again!
Yes, narrow lots with drive under garage and 2 stories above would be interesting to learn about. I see a lot of people going up on these narrow lots too.
A 2 car garage with an above studio/loft is exactly what I've been looking at lately. I'm thinking this should
I was wondering if you ever heard of UBuildIt? They help you through the build process in planning and setting up subs, scheduling, purchasing materials, and budgeting. They charge a flat rate based on square footage. $7.6 sq/ft for finished and $3.5 sq/ft for basement, garages, porches. We were wondering if this would be a good option?
Did you end up using UBuildIt?
half the time the budget is blown all the time
thank you so much for these videos! my husband and i own land in a mountain area and are hoping to go about building as owner builders. i worry about the construction loans though.
how long do we have to build the house for a construction loan? i have read that most loans reach maturation after 12-18 months but im worried that might not be enough time for our build due to weather etc. any tips for building in mountain areas? i have heard that permits are costly as well.
I did a construction mortgage (as my own general contractor) and I will NEVER do it that way again. If you go that route, just remember that the homeowner is the one that will always lose in any situation. The bank covers themselves, as do the contractors and suppliers. They will just slap a lien on your property if someone doesn't pay their bill (i.e. a concrete contractor you hired who then fails to pay for the concrete) and the bank doesn't give you any more money (about 85%) until the work is done. The solutions of course are to hire good people (easier said than done), have LOTS of cash on hand, and pay for ALL materials yourself. Also be prepared for some guys not to show up. Next build I do as much of the work as I can by myself by shrinking and simplifying my build.
@@karlhungus545 thanks for the advice! im really hoping we could do this on our own but just very fearful of all the owner builder problems. what im also afraid of are home builders that may cancel their contracts if we do decide to go that route ☹️
Get real. Apple may mark up their products by 70%, but it's not as though I'm spending my life savings or locking myself into a life-long debt to purchase a phone.
Lets get real about business ownership. 30% profit is a healthy margin to cover operating expenses. Business making less than that don't survive or they struggle. People don't work for free, people don't operate business to take a loss or to just get by.
So what? Most purchases you make have most likely over a 50% profit margin. A house is just a lot of purchases that are all taking place at one time (materials, labour, overhead, etc. etc.).
If you don't want a life long debt, go build a tiny house off-grid.
We have inflation that will probably continue, chain supply issues, higher expected interest rates, and we are one more quarter away from an official recession. We also have the probability of a significant stock market correction. Then there’s the real estate slowdown. Look to these changes to adjust your game plan going forward as you build, all the above have trade off issues. Good luck.
Are you allowed to be an owner-builder for multifamily apartments 5 to 20 units? I own a 1 acre piece of land that is zoned for multi-family in Arizona
No
What they don’t tell you is what they have specked in as nice and they consider nice is not what most people consider nice
Apple phone doesn’t cost hundreds of thousands of dollars so that not an Apple to Apple comparison- no pun intended.
😊
Ask yourself, why are we in this “supply chain debacle”..
My builder would be myself any person can learn to throw 2x4 walls together.
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I thought apple margins are 35-40%
Like any statistics the devil is in the details. The #1 cause of going over budget is change orders for scope and materials. It's misleading to suggest 47% of builds go over budget BECAUSE of the builder. I'm pro owner builders but alot of this information is deceptive
I personally don’t think of a change order as a missed budget. So I doubt that is what most of these 700 builders were thinking when they answered the survey question. Missed budgets are caused by extra costs that are unaccounted for like lumber costs going up without having a fixed price contract or forgetting a budget item or maybe having to switch window manufacturers because they were taking too long to get. I personally don’t see how the information in this video could be viewed as deceptive…uncomfortable and maybe telling…but not deceptive.
Taking on such a large project without the adequate knowledge to do it is a big mistake. Watching a couple of videos will not prepare you for the challenges ahead. If you can not afford to pay a builder, buy a house that is already on the market.
The purpose of this video, as stated in the title, is to give people looking for a home insight into the current pro builder market. If you watched the video and still think hiring a builder is a magic bullet that will lead to the perfect outcome, you weren’t paying attention. People watching this video are smart enough to decide what is best for them…as long as they have all the information they need to make an informed decision.
@@OpenBookBuild please do not take it personally but I have watched several of your videos and enjoyed them.
The purpose of your videos is to give people the information needed to decide one way or the other whether to build on their own.
My two cents in the comments is to advise them as well.
Maybe 2 out of 10 individuals watching are capable of successfully completing a project and staying in budget and not significantly altering their life in the process. Sometimes dangling the carrot in front of the horse causes the entire wagon to flip.
@@hyeonlyfe Nothing personal, just trying to make sure our viewers aren't getting bad information. Your comment was that people should hire a builder if they can afford it. This is a strange recommendation if half the pro builder projects are going over budget and half are missing their scheduled completion dates. This is a mediocre outcome, all while paying historically high markups over cost. I'm a builder, so I totally understand the situation and I'm not hating on builders here. But I want people looking for their dream home to know the facts so they can make an informed decision. So, we agree to disagree. Thanks for watching.
Easy answer after a horrible builder NEVER BUILD
if you are getting upset about being charged for a bid you can't afford it... with that being said, i think builders are screwed this year and just dont know it yet
Lol capitalism at its best? How terrible it is that you can select who you want to hire and that you can decide to work harder for a better life. Sounds awful
It's not owner builder when you've not building it
massively overpriced and regulation theft