Building a custom home is a complicated, confusing, and sometimes overwhelming process. Understanding the steps is the first step to making it easier.
Catch up on this series “Custom Home – How to Get Started” with the following links:
Part one – Part two – Part three – Part four – Part five – Part six – Part seven
The drawings are done and the design is finished, so what is the next step? Well there was one thing I did not mention during the design phase that is an important part. You need to decide if you are going to negotiate contract with your builder or put the project “out to bid.”
We strongly encourage our clients to select a contractor based on interviews and negotiate the contract with them. Having the contractor involved during the design process allows a feedback loop on pricing and constructability that is extremely valuable. It also allows the contractor to be somewhat involved during the design phase so they can understand why things are done as they are before construction begins. This approach will lead to the best value for the project.
The other approach is to put the construction documents that were developed out to bid. Usually you select 3-5 contractors, give them 2-4 weeks to price the project on a competitive basis, and then open the bids to decide which contractor you want to build your home. Typically the prices are fairly close to each other, but if one is a lot lower, that contractor may have missed something. We often see that the lowest price is a contractor that made the biggest mistake. This leads to a confrontational relationship if that contractor is selected.
So selecting the contractor is a very important part of the design process in our opinion and should be done in the schematic design phase for best results. The contractor will typically charge a fee for their pricing services during construction while some apply that fee to a reduction of construction costs if they get the job.
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