Home Buyers…Beware the Low Bid
In over 20 years of working with home buyers that are building a new home, it is amazing how many of them have fallen for the ‘Low Bid’ shenanigans that many home builders devise.
Time after time, I see where a home buyer is lured into thinking that they can save tens of thousands of dollars when building a home. In some cases, the home builder that they chose had a bid $100,000 dollars less than the more seasoned builder’s bid.
Texas is the playground of the nation for home builders. In 2007 there was in excess of 28,000 builders in Texas. Sure, the number is probably lower now that new residential construction starts have fallen.
The fact is, little or no construction experience is required to call one’s self a home builder and attempt to build homes.
There are some great builders at work in Texas. Unfortunately, their hard work is undermined by unrealistically low bids and poor quality construction.
If you are considering having a home constructed, do your homework.
Get references. Get lots of references. Get the address of every home the builder has built. Go to the houses and interview the homeowners. Pay attention to the older homes that have had time for their owners to discover defects and have had dealings with their builder. It does little good to ask a reference how they like their home if they have only been in the house a week.
Demand detailed bids. The plans, specifications, materials descriptors, and pricing should be clear, detailed and complete.
Beware the home builder who gives you a bid on a price to build the house without having spent hours or even multiple days with you to explore your wants, needs, and your dreams.
Details, details, and more details. The builder with the more expensive bid can actually cost you less in the long run.
The ‘low-bid’ builder often uses vague plans, specifications, and materials descriptors to force ‘change orders’ that end up costing you money because of the builder’s oversight or deception.
One San Antonio area custom home builder was recently forced, through legal action (a lawsuit), to admit that he had squeezed nearly 45% profit from the home that he built.
At the end of the project, the high-bid builder who builds a high quality home, as promised, and on-time, is a much more pleasant experience than the low-bid builder who squeezes more money from you as the house is being constructed.