So the final design is done, and now it's time to figure out how much this house is going to cost us.
As you know by now, we're the general contractors for this project, so we have little knowledge of the good or bad subs ... hence why we hired our building consultant. Before we brought the plans in (15 copies of 10 pages each), we had already done a lot of pricing and research on various elements on the house. We essentially did not want to make integrated design decisions only to find out that those sized windows are twice as expensive, for example.
And we also put our energies in the big tickets items that we know could swing in prices one way or the other ... windows, SIP panels, timber frame costs, etc. We also had the advantage of doing a pre-budget of sorts based on a friends house. The houses were different in size and scope, but at least you're able to get an idea that lumber costs X% of the total cost of the house or you have to allow for things like trash removal or towel bars.
So after about 45 days, our consultant came back with the final quotes and bottom line price of the house. Like most people at this stage, I did a little freak fest, since it was about 35% higher than our budget. Remember, I already knew which items we had to account for, and I had already found the best prices for probably the top 5 items ... still, 35% higher.
Keep in mind, our building consultant really didn't have an incentive to get the price down low - he was pretty much taking what the subs were giving him. And in a few cases he only got one bid from a subcontractor.
As my Daddy always says, "Never accept the first offer", I went to work to figure out which things needed to be rebid. Here was the strategy ...
1. Find more subs.
Quoting is free, and it never hurts to ask another sub or two for another quote. This is where I think general contractors really get lazy ... they stick with people they know and trust, but after a year the sub you thought was cheap is no longer competitive. Since a GC really isn't paying the bill at the end of the day, they just pass the costs on to you.
Also remember, most subs seem to bid on the moment and based on their current schedule. If they don't need work, they'll bid high. If they need a little more, they'll bid low. If they need a lot more work, then they'll bid outrageously high. Sure, some subs bid like machines based on very clear calculations - but a lot of subs don't do that.
2. Change your design
Obviously if you did a good job on the conceptual design and you sized the house correctly. You shouldn't have to go back and chop off a bedroom now that you realize that bedroom costs you $20K or whatever. But there are sometimes where you can adopt your plan to save some money relatively painlessly. The list goes on forever, but maybe that $3K door isn't worth it, and a $500 is almost as good. Maybe you don't need $50K in marble tile, and the ceramic stuff looks just as good. Those are the obvious ones.
What might not be so obvious would be things like not asking for a specific brand of material. If it's important to you, then spec it out; but usually suppliers have material that they either like to work with or can get at a cheaper price.
3. Look for things that are totally out of whack, and get creative.
The HVAC on the house initially came back at $45K for a house that has R values of 42 and super-insulated windows. The whole point of us having a super-insulated house was so we didn't need to have a complicated and expensive heating system. Part of the issue was that our mechanical engineer spec'ed out a very specific house setup, and it scared the shit out of the local HVAC suppliers. He also spec'ed out a HVAC model that wasn't really used in our area - add more money.
Other reasons why that quote was so high was just plain greed. We wanted to do a radiant floor heating system, and apparently that is a total luxury item in Indiana. So the local HVAC guys charge a fortune for it. Turns out when you're your own General Contractor you have a lot more flexibility. So a little research and talking to the right people (finally), you learn that you can have the radiant floor company design the system for you - including material list and tube layout plan and boiler size based on the insulation in your house. The laying of the tubing is a $10/hour job that takes about 100 hours. And then you just need a plumber to hook up the hoses ... done. So an HVAC system didn't need to cost $45K, but a fifth of that.
So what was the end story ... I probably rebid about 7 items, and I got the budget back down to my number (we're roughly talking $100K) ... this was with NO design changes ... just rebidding that took 30 days ... so unless you make $1.2M a year in salary or just don't care how much you pay for a house.
I realize a lot of people will hire a general contractor, so they might tell themselves that they don't care about the itemized budget ... but you should ... the inflated sub costs are being ultimately passed onto you. If a general constrictor is giving you allowances (and they will), then you need to be prepared to shop around.
