THE BAIT AND SWITCH
We've all heard of bait-and-switch. It's defined as, "The action of advertising goods that are an apparent bargain, with the intention of substituting inferior or more expensive goods."
Weather you choose Rye Customs Homes or not, it always hate it when I hear of someone falling victim to bait and switch when selecting a home builder or designer.
When it comes to home construction there are builders that will lowball a projected costs of construction or estimate to get the job. Then everything purchased above the unpractical budget is considered and change order and is usually marked up a percentage by the builder. That's bad in itself but to me the worst part is that the home owner cannot build the house they thought they were going to get without going tens of thousands of dollars over budget.
When talking to builders, if three builders tell you the AVERAGE house costs $110 per square foot and another builder tells you they can build it for $90 per square foot. That builder is setting you up for the bait and switch.
PLEASE, I beg you, PLEASE do not all prey to this. I TOTALLY understand that money is important and everyone wants to save money. I understand that you've worked hard for you money but choosing the low ball price is only setting yourself up for disappointment.
That brings up another point of a true story. I recently had a potential client ask me the ballpark price to build and quoted another builder, which was obviously a low ball price. I asked this person, did that include the builder fee, your utility hookups, your septic system, a concrete driveway, site clearing, etc. Their response, I don't know if it did or not. Come to find out later it did not but that particular builder didn't hesitate to guide a price that he could build their house for.
At Rye Custom Homes I ALWAYS include those types of items in my budget and estimates. You can't finish the house or live in it without some of them so they must be included.
I get asked weekly, "What is the ballpark costs to build a home?" My first response is, Well it all depends on a lot of things. That's kind of like asking how much does a car costs.
I usually get the response, We just want 3 bed, 2 bath, open floor plan, 3 car garage with bonus room, can you give me a ballpark for that? Another builder told me $X per square foot.
That's kind of like me saying I want a car with 4 seats, 4 wheels, a steering wheel, a nice motor, and upgraded interior. There's still no way to know what the car that I want will costs.
I ask these questions
- do you have a budget?
- do you have a house plan?
- do you have a target square footage?
- is your lot level it sloped?
- will you be on City or well water?
- City sewer or septic?
You see, all these things impact the costs of construction.
In closing, although it may be a lengthy closing, I want to give you two real life examples that I experienced this past week.
I was talking to a potential client about possibly building their new home. They told me a price that another builder, one I know, had quoted them. As soon as I heard it, I knew it was a lowball quote.
I texted another builder friend of mine and here is our exact conversation as copied from our text:
Me - I just talked to a guy and a builder you and I know told them that he could build them a house for $95/sq ft??
Him - It's a bait and switch.
If it's a 2 car garage. Small back porch. Small budgets on decoratives.
I know Builder X always says that to get the deal. Then pretty much anything the homeowner ask for is an add on.
Me - That's what I told this guy. I feel sorry for a younger couple, first home, that wants brick exterior, granite, etc, and goes for something like that.
I was visiting with one of my clients that we just started construction for. I asked him who was building the house two lots up for our mutual friend. He said, Builder Y (that's what I'll call him).
Builder X told our friend that he could build his house for almost $30/sq ft less than what his house was costing.
Using real numbers here, my client has a $5000 lighting fixture budget that includes all hanging, ceiling mounted, wall mounted lights, smoke detectors, door bell, under cabinet lights, etc. Anything that emits light and needed accessories.
He also has another budget line item of $2500 recessed can lights throughout the house.
My client had visited with our friend and found out that Builder Y gave our friend a $1500 lighting budget, not just for lighting fixtures, but for EVERYTHING. Our friend is not going to be able to do his interior recessed lighting for that budget, much less buy any fixtures. The worst part is that Builder Y will likely take the difference in the budget and what is spent, mark it up 15%, and call it a change order.