Friday, June 24, 2011

Where to start when you want to build a house?

How much does it cost to build a house? There is one sentence that contractors here all the time, it actually makes them roll their eyes.
People that are thinking about building a house search the internet or the phone book find a builder and call them up and ask that eye rolling question. This will probably surprise a lot of people that this question is the number one asked and it is never responded to with a straight answer. There is a good reason for not answering the question; the reason that it can’t be answered is that it is a trick question. It’s such a trick question that the people asking the question don’t even realize that it’s an unanswerable question. Asking that question like that is the same as asking a car sales man how much a car cost without pointing to one.
Let me explain, there are so many options to houses these days that it is vertically impossible to tell someone what a house cost. A couple of times when I was young and naive I quoted the average price of the homes that we build to a customer. When we finally estimated the house it was 1/3 more then what I had told them on are first conversion. They left thinking that I had lied to them just so that I could get the job. The fact was that the house they asked us to price wasn’t just bigger then I originally thought, it had every high end feature that you could find in a house at that time. The way a contractor will quote a house is as follows;  they will take your plans and quote every piece of the house separately, so they will get a framing price for walls, the roof and the floor.  They will get prices on the plumbing, electrical, drywall, painting ect, ect.  Then they add up all the prices, put a profit on top for themselves and all appropriate taxes. Before they present the quote or budget to you they will usually break down the cost to a sqft price so that they can understand where there pricing is taking them. For example if you routinely build houses that are $500,000 and are 2000 sqft then they are charging $250 a sqft for a finished house. So if they quote a 2000 sqft house and it comes in over or under $500,000, then what they do is go back through your estimate to make sure that they didn’t miss something in the plans.  If there estimate is over the normal sqft price then they look for something making the quote more expensive and remove it if it doesn’t need to be included in the build. The big thing that changes the sqft price of a house is not just what you put outside on the house (siding, brick, and stone) it’s what is put inside the house. It’s amazing how fast the finishing’s in a build raise the price of a house. Upgrading your flooring in a house can add $10 a sqft to a house depending on what you choose.
So the best way to go about finding out the price of the house that you want built and the process that is required by you to go through to get that accurate price is as follows;
1.       Find out what you can afford, what your total final budget can be and what you can get financed.
2.       Find a contractor that you trust and hire him to help you do everything. For a small fee a good contractor will help you through the tough process of getting ready to build a house.
3.       You with help from the contractor can find a lot to build on; the reason for involving the contractor in this process is so that you purchase a lot that will suit your needs, like size of house. Depending on where the lot is, you might need to install a septic system, a well and probably a driveway. These are all extra costs that most homeowners don’t realize they need to include in there building budget.
4.       Have your contractor find out the fees for building in that area, there could be development charges, building permit charges, sewer and water charges, conservation authority charges and in some places you might have a homeowner association that will have fees to build.
5.       Get your plans drawn up by a professional. Your builder should have access to professionals that can draw up your home for you. You need to use either an architect or a drafts person; both these professionals (in Ontario) will have a government appointed design number. This number allows you to take their plans that they have drawn for you to the local building department to get a permit.
6.       Give the plans to your builder and have him give you a price on what it will cost you to build your home. There is a good reason that I recommended you pay your builder the fee for helping you with the process that leads up to you having plans drawn.  It is so that you own the plans and that you will not owe your builder anything when it comes to getting a price on the building of your home. This allows you to take the plans to another builder if when you get the price from your builder and you believe that they are too expensive. You have that right because you paid for the plans and legally you own them. Any builder will tell you that it’s a good idea to get a second quote. But one word of caution, do your research on the other builder, so that you know exactly what they will be quoting you and the quality of their work. This also should restrict you from going out and getting 3 or 4 other builders to price the job. This is a major mistake that a lot of people make, they think that the more prices then the more options you’re going to have; actually all it does is confuse you. Every builder will quote in a different way and add or omit certain things from the build depending on what they believe will get them the job. The builders that give you the large multi page estimates that show everything in detail are usually the best ones to go with because it means they are going out of their way to show you that they are not hiding anything. A lot of builders will be vague on their estimates trying to show you they have the lowest price and it’s only later that you realize that you’re not getting everything that you assumed you were getting.
7.       Sometimes you will have to get the plans redrawn or altered because of the price or because the municipality has an issue with the size or height of the building. This doesn’t cost you a lot and a good builder will help with this process.
8.       Now that you have your builder, you need to apply for your permits, a lot of times if there is a conservation authority involved which means it could take you up to 6 weeks to get your building permit approved. There could be other permits that you have to apply for as well, such as if there is an existing home on the property that you want to demolish. This requires the services to be disconnected and reconnected at a later date before they will grant you a demolition permit.
9.       The building of your house should be left entirely to your builder. That means he does all the organizing, he talks to all the sub trades and he does all the quality control. You as the homeowner should be involved to a point, you should only deal with the builder, there is nothing worse than having a homeowner show up on the building site and start questioning sub trades about what they are doing. It doesn’t just cause confusion for the trades on site, but it can be a major safety issue for you the homeowner not having the proper safety equipment. Many a homeowner or their family member has been injured by showing up on the building site unannounced and wandering around without an escort. Injuries from simply stepping on a nail, to falling down a hole, or standing in the wrong place and having something heavy fall on you can be devastating and life altering. What homeowners have to realize is that residential construction is extremely dangerous and no matter the best efforts of the builder there will always be unsafe areas in a construction site.
10.   Once the home is built and finished, you and the builder will do a walk through and list any problems minor or major that you have with the home. The builder will work through the list and then when everything is satisfied you can pay the builder the holdback that you owe them.
Don’t be afraid of paying them the final amount, you don’t have to worry about something going wrong in six months, because (in Ontario) your home carries with it a 7 year Tarion new home warranty. Which means you’re insured against anything serious that could go wrong.

So the next you are thinking about picking up the phone and calling, or emailing your local builder to see what your new home will cost you, remember the list I have left you with, it will help stop the builder from rolling their eyes at you and help you get the answers you need more quickly.
Remember that the more planning you do, the easier it will be for you to get proper and accurate quote on your building project.
If you can any question about the building process or are looking for a quote please feel free to call me at (877) 866-3202 or at robabbott@villagebuilders.ca

Rob Abbott
Operations Manager
Village Builders Inc.
   

3 comments:

  1. Thanks for all the great advice! Our family is growing and our small home we are in now is just not cutting it for us. We finally feel like now is a good time to start building our own home, and one we hope to live in for awhile. I guess the next step now is to get building supplies in toronto and get started. Thanks again.

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  2. These are a good advices. Know your budget first, then find a reliable house builder, and so on and so on.

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    Replies
    1. Thanks for taking the time to read it.

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