Advantages of Working with a Small Builder

Most large builders carry a significant overhead which is passed along to the home buyer. These include model home, sales staff, design staff, decorators, superintendents, administrative staff, etc… These are items included before the profit margin is built in. I’ve been told by several national builders their administrative cost range between 12 and 14 percent. For a $300,000 that is $36,000 to $42,000 just to cover their overhead. In addition, most are using salaried superintendents that are following the company manual on how to build a house and have very limited knowledge on the science of building a proper house.

How does a national builder compete and keep their pricing competitive? One thing they will tell you is they can save significantly on materials cost. There is a grain of truth to this, but very small. In talking to various suppliers we have determined the savings is on a few items only, lumber is typically about 2.5% which equates to about a $1000 savings, windows are about a $350 savings, doors can be a 5% savings or about $500. Other ways they save money is by using less and cheaper materials. Also by using the cheapest subcontractors they can find. So you may be getting a vastly inferior home so they can compete, or you are paying a higher price to get quality.

With a small builder you have none of those costs. All their cost is built into their profit margin. In addition, you decide what will go into the house. Would you like to build a high quality home without having to pay the huge overheads? Maybe you would like to save on some of the materials and be very price sensitive? Would you like to build a super high efficiency house with someone that understands the science involved and can help you steer away from the hazards of not building it properly? It’s you choice since you get exactly what you want in the house.