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How Do I Find the Best Builder Deal?

A builder’s time and expertise is valuable, but you also need a price you can work with. These fee-structure options can bring balance to your budget and your build.


 Photo Credit: Ludmila / Adobe Stock


Time and money are two things you never want to waste on a project as important as the place you’ll call home. Your builder likely will charge for labor and materials in one of three ways: fixed bid; cost plus (also referred to as “time-and-materials”); or a combination of the two. Here’s how they differ: 


1. Fixed Bid

This reflects the exact amount a builder will charge for construction, as well as the home’s completion date. In theory, you get what you want and the contractor gets paid what he wants. 

  • Pros: The more straightforward the project, the easier it is to contract for a fixed bid. Plus, a contractor will be looking for the best deal on all materials to be competitive. Trade contractors, such as electricians, HVAC installers and plumbers, often prefer fixed bids.
  • Cons: Log homes often are built on rugged terrain. If you insist on a fixed bid, the builder will have to plan for contingencies, charging far more to cover a wide range of issues that may (or may not) crop up. Translation? You might not get the best price.


2. Cost Plus

A contractor will base an estimate on the time and labor it will take to complete the home, plus a markup on every material that goes into it. This tactic is used on projects where costs are harder to predict. Most builders use this method because there are many unknowns in log home construction.

  • Pros: If you and your builder keep track of your budget and avoid changes, this can be the most competitive payment plan to build your home.
  • Cons: There is no incentive to do the job with any speed or to purchase materials shrewdly, because the builder marks up everything that goes into the house.


3. Combo Deal 

A combination of these two is common in log home construction. Some parts of the house are done on a fixed bid, some on an hourly rate and other parts on a time-and-materials basis, plus a percentage. 

  • Pros: If you invest your time in choosing cabinets, why should a builder receive a percentage of the cost for just ordering them? A combination bid can help make the process easier for both builder and buyer, while building trust.
  • Cons: Not all builders offer this option.


See Also: 5 Solutions to Save Money During Construction

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