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The 99th Percentile

I often speak at the Log and Timber Frame Home Shows about how to design to budget and then stay on budget. I start my presentation by asking those attending what they are going to spend on their new home. With rare exception no one has an answer for me. What I find interesting is that the show attendees ask me what their home will cost? At this point I don’t have a clue. I am yet to understand what they want, where they will build, the architecture they prefer or the finish-out specifications. Some even tell me what the house should cost based on national averages. I have yet to know what average is in today’s market.


For us 99 percentile, eventually, our decision for building a home will come down to budget. In order for our dream home to become a reality, we must bring together the wish list and the amount we are prepared to spend. Both are compromises, as the wish list gets adjusted and the amount we anticipated spending is revised. At the end of a building project, many decisions are made based on value, aesthetics, and utility. An interesting shift in our culture has emerged. We have gotten wiser. Gone are the days of “more is more”. Today we want what we can afford, we want to understand what we are getting for our housing dollar and we want it delivered in a professional no-nonsense way. Gone is the marketing hype, the seduction of getting it all, and the desire to keep up with people who really don’t care about us. We, want it real. A real understanding of what is deliverable. A home we can live in, afford to heat and cool, one that is easy to maintain, and one that supports our lifestyle.


So How Do You Get There? It begins by understanding what you can expect for your money, for your investment of time, for the decisions you will need to make and for the relationships you will develop in order to get there. Each of these decisions requires your participation and vigilance. Here are the things I ask you to do to keep it real, to establish and stay on budget, and to have an enjoyable and respectful experience.


Know Thy Self. Know what you want, what you can afford and what you will compromise. We each have a pain threshold that must be respected. You know yours better than anyone else. So be honest about what you are going to spend. Numerous times I have been given a “build budget” that is lower than what the client is willing to spend. So the dance begins. In the past clients have asked me to provide numbers that represent the quality of home they wish to build. I am beat up on price to get the cost down. Then the client begins to spend like a drunken sailor, irrespective of the established budget. Mind you this is the client’s prerogative, but it takes the budget in the wrong direction. I am now concerned that we are headed for trouble.


Know Thy Builder. Selecting your builder is a critical decision to the quality of the home and the quality of the experience. So how do you know who is right for you? Ask. Ask the local bankers, check with the Better Business Bureau, the Chamber of Commerce, major building supply companies. Once you have identified a likely candidate, then ask for references; go see their projects under construction, look at completed homes, and have a conversation with the homeowners. Oh, Just a few other tips. Get copies of the builder’s license and insurance policies. Then check with the state and carriers to confirm the authenticity of the documents. Most states require a builder to be licensed. This means the builder possesses a skill level that is sufficient for residential construction and has the appropriate insurances for worker’s compensation and liability. Is someone is injured on the job site then the builder’s insurance should cover any expense? If the builder is not insured then you are responsible.


Diy Is A Slippery Slope. If you wish to do it yourself, truly ask yourself if you have the skills, the time, and the contacts to accomplish what you want. If not then any hope of DIY providing you a savings and quality level you expect is not likely to happen.


Now For The “Brother In Law”. Should you have a friend or family that can install floors, paint walls or sell you materials, fixtures or appliances at a good price, ask yourself how you will handle a situation that goes south? Are you willing to risk the relationship? If the opportunity is too good to pass up, then have the friend or family member report to your General Contractor. Respect the GC’s knowledge of craftsmanship and value and listen to what the GC has to say. Then decide if this is a good idea. Remember, the GC’s role is to manage the construction of your home, to ensure the quality and keep the schedule moving forward. If you go ahead and have the brother in law install the floors and the floors warp, then you get to deal with the issue.


Do Your Homework. Your homework is to know what things costs, or at least to provide a budget that supports the quality level you wish to have. In order to identify these costs go shopping. Not buying, just shopping. Kitchen appliances are an excellent example. Know what you want, get the specifications, check on the prices and tell your builder what your allowance for these items needs to be.


Be Ready For Your Builder. This means that you are ready with a decision when the builder needs it. A good example is flooring. The options seem endless. So go look at samples, make up your mind, and let the builder know what you have specified. It also helps to know that the supplier has sufficient quantities in stock for your project and can deliver when the materials are needed. Again, let your builder know what it is, where it is and who to speak with, with contact information.


Communicate With Your Gc. He or she cannot read minds, so be sure to let the General Contractor know what you want and have them tell you what you can expect. Establish a cost for upgrades, add-ons, changes. Then confirm this in writing. Today you have more tools to communicate with than ever, so send a confirming email, text or hard copy memo. This is your responsibility to be sure the communication is complete.


Think Ahead, Think It Through. Every home is unique. It should represent your lifestyle, look and feel. So think about this and make informed and contemplated decisions. Work out details on paper first. Things are easily changed on paper. To rip something out once it has been installed is not easy and is expensive. Discuss the details with your builder ahead of time and you will get a better result.

Establish Accurate Accounting Practices. This is your home and your money. The builder is not your banker. He or she is not responsible for financing your home. So establish with your builder what the construction draw policy needs to be. Ask for accountability from the builder. How has the construction draw been allocated, who has been paid, and for what? Remember this is your home, your money, so know how the funds have been spent.


Respect Your Allowances. An allowance is an amount allocated for a particular item or category of expense. I mentioned flooring earlier. This is an excellent example of an allowance. With all the choices available, you can choose flooring that has an installed cost of $3 per square foot such as carpet or $40 a square foot for reclaimed vintage oak flooring. Know what you want and decide on an allowance for your flooring ahead of time. Then respect the allowance budget by choosing a floor covering that is appropriate. You have every right to select a flooring material that is more, but remember at the end of the project this is the cost that creates the total for the project.


It All Adds Up. Have you ever gone to a Sale and spent more than you intended in order to save 50%. It happens. But the reality is that it all adds up. A little here a little there becomes a To number. We each find things we want for our home that we did not anticipate up front. remembers is when I recommend that your budget include “grace” money. Figure 5 to 10 percent of the total budget. This keeps everyone out of trouble. You have the flexibility to take advantage of a sale or to purchase the antler chandelier that will be perfect for your great room. Just remember it all adds up.


Now For The Dynamic Of Building A New Home…


It Is Stressful. You have dozens of decisions to make such as which tile? tile pattern?, color? cabinet layout? door style? light fixtures? window grills? wall finishes? stone? granite? marble?. If you enjoy this perhaps the stress will be lessened. If not the stress will take out the fun. So engage someone that does know and appreciate their contribution to the project.


Everybody Is Excited. So be nice. Be nice to your spouse. Be nice to your children, your grandchildren, etc. They too are excited and wish to add their ideas to the mix. Little ones just want to play with the cut off 2x4 or go explore the construction site. So help them stay safe.
If Mama’s not happy… For you men out there that wish to have a happy life, then let your wife have her way. Think about this, this new home is her badge of honor, her castle, her respite. Make it a fun process by supporting her wishes. (Remember, chances are good you will have your man cave too).


Be Respectful. The men and women working on your house are crafts people. They want to do a good job for you. Should you see something that concerns you, then speak to your General Contractor to arrive at an understanding. I once saw a client speak harshly to a worker. Guess what? The worker didn’t like the guy anymore. Human nature tells me he wasn’t as interested in doing a good job as before. Another way of looking at it to realize the best way to get the result you wish to have is through respectful communication.


No Monkey Business. Okay the building trades have a lot of “colorful” people, some more professional than others. So should you encounter someone that really is not doing what he or she should be doing, then let it be known. What I am concerned with here is behavior that jeopardizes the safety, quality or the law. For me monkey business is defined as doing drugs, drinking on the job, horseplay or an unsafe job site. Be sure the GC is aware and informed.


Pay Your Bills On Time. This keeps the construction process moving forward. Plus you have an ongoing awareness of the costs. You should have no surprises if you keep up with it weekly. It also helps to get lien waivers for materials and labor you have paid for. This document is your evidence that the bill is paid, and no one can come after you for an “unpaid” bill.


Keep a record. This has never been easier than it is today. That smartphone is all you need to take pictures, send emails, texts, notes to yourself, etc. Say you find a great light fixture for the house but are unsure it will fit either aesthetically or physically in the room. Take a picture, send it to the GC or your spouse and ask. Chances are good you will get an immediate answer.


Just In Time. If you have a fixture you want installed in the house, then be sure it arrives on the site just in time. Neither you nor the builder wants the fixture sitting around the site with the chance it will get damaged or disappear before you need it. So talk with the builder and determine when to have it on site for installation.


Perfection! If you are expecting a perfect house I have news for you. It is not going to happen. Think about this. We are imperfect people. We build with imperfect materials. We have our good days and bad days. The weather, the process and the planning are not perfect. So don’t expect perfection. If you do, you will drive all of those around you crazy. What you can expect is a well build house that is plumb, level and square, a house that doesn’t leak, an energy tight house, a house that reflects you and your lifestyle. A home you are proud of.


Work With A Professional Team. Be sure you identify talent and commitment. You must have both to get the house built properly. It also helps to make it an enjoyable process. Don’t be someone’s learning curve. Chances are quite good you have worked a lifetime to be able to afford this house, so be sure you enjoy it. You deserve it.
One last thing. You control the cost of your home. Once you have signed off on your house construction drawings, arrived at a cost to build with the builder, agreed to the finish out specifications, identified allowances, considered the “add-ons” then you will know what the project cost of this house should be.

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