Interviewing Your Builder - Part 3

How will you set a budget for my project?
There are two primary ways that builders price custom homes. In simple terms, one is a fixed price contract, where most design decisions are made upfront, and allowances are provided for items in the project that still require decisions. For example, you might have a $20,000 allowance for flooring built into the budget, with a change order required down the road if you choose a more expensive flooring. The other pricing model is a "time and materials" model, where the builder will provide you with an estimate based on what is known, including allowances, but will invoice you for actual time and materials as the project progresses.
In either case, change orders are tracked in order to identify decisions that will affect the overall budget for the project. In a fixed price contract, a change order request may result in a delay in the project, as the builder may stop work on the project until you have agreed to the additional costs. In a time and materials contract, the builder will probably generate an estimate for the change order, but will keep working and bill you for the cost the change.

Our Answer
Most often, Vander Meulen Builders works on a time and material basis. We promise to keep you informed about progress on the budget monthly, and will issue change orders each month that address any changes you may have made in the project. One key advantage of this approach is that we don't require you to make every decision before we can get started. You can get going, knowing that if you make changes, you will have an opportunity to review their impact on the budget before making the final decision.


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