Building a house, is this normal ?

[tony]

My GF wants to build a house. She bought and paid cash for 10 acres.
The house:
2 bedrooms, 2 baths, a full poured wall (9 ft) basement with walk out doors.
A 2-car garage, open floor plan with "beams" running from the front of the house out the back for a covered patio.
A large pantry with a dog wash station. Steel roof, above average cabinets and counters.
Nothing spectacular, fancy.

Bulder 1- pretty much flaked out on her, removed things "accidently" from the plans. Finally told her to find someone else. This guy is a friend of her dads.
Builder 2 - Amish guy, his rough bid was $520,000!
Builder 3 - verbal bid was $350,000, we started the loan process. This builder is supposed to provide a contract and a list of materials.

All of a sudden, his verbal bid jumped to $520,000!!
WTF?! There is no way I'm signing up for a half million-dollar 2-bedroom house. I thought $350 was too much and was on the fence with that.

This is Athens County Ohio a liberal bastion centered in red southeast Ohio. If it were not for Ohio U, it would be red. So, in turn, these people love to tax themselves to death and then bitch about it Estimated property tax is $7,000. 00 a year.

Is it common practice for builders to fluctuate or change prices like this? The loan officer said there was no way this would appraise enough even for $350. It's like the twilight zone here. If you know it's not going to appraise for what we are potentially asking for, why even have use go through this?

 

[TX_Diver]

Seems like “normal” behavior. Finding a decent contractor can be hard.

A wide gap in pricing is usually a good sign to start asking more and more questions or get another budgetary price to sanity check everything.

 

[Silveroddo]

From what I've notice recently, builders/contractors/trades have been on such a gravy train post covid they've become like the handymen on the south park episode. My brothers been trying to get a price on a stick built shop addition. A close buddy of his grave him a price and from what we can tell there's $40k of labor in 3 guys for 3 weeks shelling up a 32x40x16' tall stick built shop, 3 walls, the roof, tin on the ceiling, no overhead doors, no electrical, no insulating, no concrete, just 3 guys. Works out to like $109/hr. When you talk to people about what they're paying to get projects done its asinine, but people are paying it so it continues. I've know several contractors that have just been throwing big numbers out to see who bites and have been staying busy for a couple years now.

 

[CMF]

What's the square footage?

 

[grfox92]

I think the biggest problem with recent rapid price increases in home building is quite simply labor cost. Wages have nearly doubled in the past 5 years due to the increased cost of living.

This should sound obvious, but as an example.....

An order of groceries from Walmart in 2020 that was $140 is $310 today. Thats every single item in the shopping cart matching from 2020. Houses that sold for $299k in 2020 are on the market right now for $599k.

The cost of material is not double from 5 years ago and actually has stabilized and went down since post Covid but still more expensive.

I priced out 1400 sq ft 3 bed 2 bath a few months ago. Material all in in, finished was around $100k. Add labor and subs and it is around $425k. This was for builder grade. MDF trim LVP flooring, single light in every room. Make it a custom homes with better finishes and it will be closer to $550k.

Sent from my SM-S931U using Tapatalk

 

[grfox92]

From what I've notice recently, builders/contractors/trades have been on such a gravy train post covid they've become like the handymen on the south park episode. My brothers been trying to get a price on a stick built shop addition. A close buddy of his grave him a price and from what we can tell there's $40k of labor in 3 guys for 3 weeks shelling up a 32x40x16' tall stick built shop, 3 walls, the roof, tin on the ceiling, no overhead doors, no electrical, no insulating, no concrete, just 3 guys. Works out to like $109/hr. When you talk to people about what they're paying to get projects done its asinine, but people are paying it so it continues. I've know several contractors that have just been throwing big numbers out to see who bites and have been staying busy for a couple years now.

For the crew of 4 guys I work with daily, it costs around $1500 a day to have us on a job site. We are a highly skilled group with the ability to build just about anything from commercial buildings, to elaborate custom homes to insane equine buildings and barns.

Sent from my SM-S931U using Tapatalk

 

[Mag_7s]

Building your own home can be one of the most rewarding and stressful things one can do. A lot of things will be tested, including your relationship. Through patience and grace it will be worth it. Have you thought about GMing your own project? If you can perform a lot of the work yourself, sub-out the work that you dont feel comfortable doing, you can save a considerable amount of money. You might get asked frequently why you need ANOTHER nail gun from your significant other.....ask me how I know.

 

[Axlrod]

Seems about right. The part you left out is, they will go over budget. And any completion time frame will have zero chance of being met.

 

[WiscoHoundsman]

I GM’d my own home back in 2020. If you can do some of the work and pay for materials separate from the labor you can likely save some money. I got quotes from 3 contractors on framing, concrete, drywall, electrical, plumbers, well drillers, grading ect. You then become responsible for coordinating everything though. I probably saved $100k on our house this way and with doing all the finish work myself. There are a few good books on the subject if your interested.

 

[BLJ]

The part you left out is, they will go over budget.

My dad told me when we had our house built to add 40% to the quote.
Then there would be a chance of almost having enough money to pay for it when it was done.

 

[The_Jim]

I would just be my own general - but I also am an electrical contractor and know who I would hire personally. I know this isn't the case for most.

There are good contractors out there - you just need to ask around and find them. Even a guy giving a verbal might be good, the one you talked to obviously is not. Most good tradesmen aren't the best businessmen...

 

[strousek]

I built my house in 2023 and couldn't believe the fluctuation in the market through the process at that time. I own a HVAC company and have been in the construction field since high school so I knew I was going to do 75% of the work myself. I brought my plans to the bank with my estimate job cost and they about laughed me out the door.

Per the bank they saw that I was saving money on labor and material mark up as I can get quite a bit of the items at contractor cost. The bank required that I get multiple estimates from all trades to ensure we were covered to get the house finished in the event say that I broke my leg on day one of the build. This budget doubled and made me wonder how anyone can build a home in Colorado.

I was able to finish the home in one year and within 5% of my original budget to the bank. It was by far the hardest year of my life and I have to credit my wife for taking care of the kids and personal life because I spent every minute of that year working on our new home. But it was entirely worth it in my opinion.

Not sure what your utilities situation is there but we had overhead power lines through the property already. Even with that we were over $100k to get power trenched, well drilled (which ended up being 700 foot), and propane tanks purchased and set. After excavation and foundation we were over $200k without a single board on the ground at the property! I would highly suggest trying to contract it yourself to save the 14% mark up on a GC that will make 5 phone calls a week and spend 30 minutes on a day on your jobsite.

 

[ResearchinStuff]

Sounds like guy 3 was planning to sub out to the Amish fella and had to adjust. You can't trust anything that isn't written down, and even then the only thing you can trust is it will be much more than that because:

 

[Geewhiz]

Wages have nearly doubled in the past 5 years due to the increased cost of living.



Sent from my SM-S931U using Tapatalk

Cost of living has doubled no doubt but I have not seen wages anywhere close to double. Maybe a few percent increase but definately not double to keep up with cost of living.

 

[grfox92]

Cost of living has doubled no doubt but I have not seen wages anywhere close to double. Maybe a few percent increase but definately not double to keep up with cost of living.

Are you in the blue collar trades?

Sent from my SM-S931U using Tapatalk

 

[grfox92]

Cost of living has doubled no doubt but I have not seen wages anywhere close to double. Maybe a few percent increase but definately not double to keep up with cost of living.

Its also possible that I am living in an echo chamber amongst the guys I spend the most time with. Maybe double is a bit of a stretch, but I know for me personally my hourly rate has more than doubled since 2020, but my experience and skill set is also very valuable.

I am contracted labor almost exclusively now. I have chosen not to take on any of my own jobs anymore. I love this work but I despise managing projects, mainly due to customers and subs.

Sent from my SM-S931U using Tapatalk

 

[Choupique]

Finding a decent contractor can be hard.

This is the simple answer.

Residential home contractors range from professional craftsmen you would love to see marry your daughter to a barely alive meth head looking to do as little as possible to "earn" his next hit and everyone in between. He'll be by to steal some copper and tools at some point as a bonus!

Its a business with very low barriers to entry and with people now willing to pay for all manner of shitty work, its saturated with shitty people. There are great ones out there. They're usually very busy and more expensive but what you pay for them in known costs will be more than worth it to avoid the innumerable hidden cost the shitheads will stick you with.

 

[txtransplant]

No comment on the negotiations, but I feel compelled to jump in and say this because nobody else has.

You are 100% going to regret building a 2/2/2 in the future. It’s not big enough. Even if you’re certain you’ll never have kids, it’s too small to comfortably host family and friends. Finances aside, you want to go bigger.

 

[Thess87]

I GM’d my own home back in 2020. If you can do some of the work and pay for materials separate from the labor you can likely save some money. I got quotes from 3 contractors on framing, concrete, drywall, electrical, plumbers, well drillers, grading ect. You then become responsible for coordinating everything though. I probably saved $100k on our house this way and with doing all the finish work myself. There are a few good books on the subject if your interested.

What you’re suggesting can be a good idea, but the reality is not everyone has the knowledge or experience to manage it effectively. A lot of times, it can lead to disorganization and unnecessary chaos.

It’s also important to consider that if you take on the responsibility of sourcing materials yourself, that can work out great—but if something is wrong, the crew still expects to be paid for that day. When a contractor handles materials and coordination, they’re not doing that for free—it’s part of the value they bring.

I do think trade pricing has increased, but at the same time, people often don’t want to pay skilled tradesmen a higher wage, while expecting higher pay in their own professions. One of the advantages of owning your own business is having the ability to control your income and give yourself raises based on your effort and risk.

From what I’ve seen in my area, the lowest bid is often the one that ends up changing scope, running over schedule, and delivering lower-quality work. Higher bids, while not guaranteed, are typically more reliable and produce better results.

I also think a lot of people think the only high paying jobs are office jobs, not the physically debilitating professions that the trades are.

This is in now way aimed towards the quoted message, I quoted it only for reference. I’ll get off my box now lol.

 

[Jon Boy]

Are you in the blue collar trades?

Sent from my SM-S931U using Tapatalk

They have doubled here in mt.

That does seem high for a Midwest build but on par or even low for a MT build.

I built a two bedroom house once, and deeply regret it. If I would have added a 150 sq ft bedroom the house would be worth $100k more.