Definitely worth trying to negotiate. I would imagine that it depends primarily on your local market how much (if any) a builder is willing to negotiate. That being said, since the housing market for most of the country is still tanking, your odds of getting additional allowances are decent.

In my case, we recently signed on a new construction in an area where there are many new home builders competing with a fairly large pool of existing homes. In order to compete, all of the builders were will to wiggle a bit on their concessions and allowances. We ended up getting a very good deal on a floor plan that we loved in an area that is ideal for our situation.

Good luck!

Thank you so much for your sage advice macv... You've been more help then you can imagine.

If a contractor offers you a low allowance amount for a material, it does not necessarily save you money since the actual amount will be adjusted later when the material is selected. The adjustment is a change order whether it is a credit or an add so a markup may be applied as a standard procedure.

I find that good contractors drop the markup for allowance change orders because it can become a sore point when owners realize the contractor is making money because his supplier charged them a lot more than the allowance for better door knobs, like some kind of luxury tax. This is a place where a contractor can be a hero and generate a lot of good will or at least avoid bad feelings.

Very good macv.....I do believe we have a scrupulous builder.
We have spoken to some of his previous clients and he's received stellar reviews.

Thank you for your help we now have a better understanding of the beginning process.....To be continued.

"Allowances" are just place holders until you pick out a specific product. They're guesses, that's it. And they are usually on the low side in your contract so that the total home estimate isn't so shockingly high for the purchaser that they go elsewhere to have the home built. It's a bit of a shell game in many ways, because of consumer focus on price shopping.

If Builder A says he can construct your home for 475K and builder B says he can do the same plan for 400K, then most people won't have done enough investigating on the front end for a true set of complete bid documents to be able to say that this is an apples to apples comparison. They'll usually just pick Builder B. And, it usually isn't apples to apples. What happens is that Builder A may be closer to the real world price for lighting or carpeting or cabinetry, whereas Builder B is giving unrealistically low numbers for those allowances and when you do the change orders to something you actually want rather than builder grade, the total for the build will actually be $475K.

So, "negotiating" an allowance is merely playing the shell game with yourself. You're still going to end up paying real world costs for the items you want. Whether you have a $400K house with $75K worth of "upgrades" to the allowances or have a $475 house with no changes to the builder's basic choices, well, you still have the same house.

If you decide on which products you are going to use on the front end, and develop a set of bid documents based on that, then you don't have "allowances" i.e. guesses as to what products cost. That's the only way out of the shell game. You put what you want in writing in advance and let all bidders do so with a level playing field.

After researching,I told my builder what my allowances were going to be...

For us, it was that with all 3 bids, each builder just lumped things into one big 'allowance'. The tricky part was to figure out what was actually included in this 'allowance'. One had an allowance that was almost double the other one, but it included the doors, the windows, the fireplace mantle, even the chimney cap (never had thought of that one!).
Basically, if I could do it again, I'd make a list of ALL things that I would be choosing (doors, windows, flooring, cabinetry/built-ins, lighting, fixures/knobs/hinges, tubs, bathroom shower/tub enclosures, switches (lutron vs plain jane ones), any special features like heated flooring), and just put it in as one big estimated sum in the contract, to be able to compare bids equally. It doesn't really matter so much if you're off by several thousand, since you're the one responsible for paying for this stuff. Then have the contractors bid on essentially the rest of the stuff. Our contractor basically said, "if you want something special, buy it, and we'll install it. it doesn't matter to us if we install $1/sf tile, or $10/sf marble onto the floors." Obviously anything that requires more labor will be an extra cost, but that way, at least you don't have one guy bidding a $20,000 appliance package, and another one bidding a $35,000 package.

nycefarm is right. that's what I should have done. I just took the 3 bids, compared them all, asked alot of questions of each one, and then finally got something I thought was an adequate comparison.

The best advice I can give to anyone regarding allowances is to not use them. They serve no purpose but to postpone decisions and they can hurt you. In a commercial project, where an architect is required, they are never used unless some material cannot be chosen during the design process and that is extremely rare.