After our meeting with him, we looked at the prices of the houses in his subdivisions and noticed that he is quoting us the same price & price/sq ft. We are planning to ask him next time. But before our meeting, I wanted to see if someone else has had the same experience and if this is normal for contractors building outside subdivisions.

Are there differences between your lot and the subdivision lots? Is yours larger, wooded or away from city utilities? If the subdivision is smaller, cleared with city utilities could see that being a big part of the difference.

If he's already building in the subdivision, it's more efficient for him to continue building there - his crew can easily move from one house to the next, he can have one foreperson overseeing multiple builds, everything about the subdivision is a known entity, there may already be water / sewer / utilities, the entire sire may already be cleared, etc.

He's taking on more risk and losing some economies of scale - therefore - you'll pay more.

Right, as gpeach1 has indicated, he probably has a substantial investment in the lots already.

The raw land, the sub division of that land, the plots, the permits, the utilities, the road. When he's selling a package like that, the numbers are not the numbers. On your lot there are many unknowns.

You really can't compare by square foot anyway.

gpeach1, jannicone & jn3344, the land will be in a ready to build condition - it's already cleared, surveyed, we are working on building the road right now, we will also take care of the utilities, permits. We specifically asked him for the price for just building the house.

Aside from the reasons you mentioned, is there any reason he would want to charge us the same price as someone who doesn't own the land? I am starting to think it's either a misunderstanding or he is just taking us for a ride.

How are the subdivision houses priced? Total with lot? Or is it broken down where someone can just buy the lot for 50k. Ask because lots of times a builder will buy a chunk of lots up front. Maybe that lot cost 25k because he got 10 of them. The house is really 375 plus maybe a fee for not being in a subdivision. Or if it is all his subdivision then even less.

Because now his crews have to drive to your lot as opposed to just walking next door to the next house. He has to take his foreman off the multiple homes to go check on yours. That all takes time, money and gas.

And as stated even though your lot will be ready, there are still unknowns since it's not a tract home lot.

cpartist, 50K for transportation costs? That is quite a lot!

gpeach1, I am not aware if you can buy just the lot in the subdivisions where he builds but the price of the houses he sells is total price (inclusive of the land). I have seen other communities though where you can buy just the lot and we could have him build there.

Few weeks ago, when we were touring model homes, we asked how much of the total price was the market value of the land and how much of the total price was the cost of building the house. The answers we got were around the same price range. 50k - 80k for land depending on the lot size, and the rest is the price of the built house (actual cost & markup for building).

Of course, he buys the land much cheaper at a discount (definitely not 50K for 0.5 acres) but he marks it up at market value when he sells it with the house.

It looks like that even if he builds on our land, he wants to get that markup for the land that he usually gets when building in a subdivision.

Can you blame him? Building on a lot that isn't his is cutting into his profit and it is more expensive than building lots he already owns. If you aren't happy with his prices, you should get quotes from other custom builders.

He also has every right to mark up the price of a lot to market value when it is sold. He went through the time and expense of buying raw land, subdividing it, building roads, running utilities to it, etc. If you are also using his design, he has a right to assign a value to that as well.

Talk to another builder.

My land had the road, the utilities to the site, septic, clearing at the site. One moment, in my frustration, I complained about the builder to the architect, "why am I not getting credit for any of this??"

Crickets.

Caroline Hamilton, we are definitely getting quotes from other builders.

We wanted to see if this is the norm with other contractors who build in & outside subdivisions. Would they charge you the same final price if you own your lot compared to someone who doesn't own a lot for the same exact house.

Lost opportunity costs. he can utilize his resources building "next door" with all the "knowns" or he can utilize those same resources less efficiently off site with more unknowns. If he's going to lose a foreman and a crew (and perhaps a foreman that could have managed 3-4-5 houses locally) he's going to want to make the same profit.

Add into that fixes / inch lists / call backs that will take significantly more time (instead of the painters leaving new house #8 to touch up sold house #1, he'll have to schedule them...) and it's significantly more expensive for him.

And this is precisely why the planned unit development / single builder neighborhood is so popular with builders!

If you think about it, it is not just the "cost of gas". Everytime one of his workers comes to work on your house, they are leaving from the other house on the clock. So he is paying an hourly rate (at a minimum) for them to get from the current subdivision to your lot. In addition, even though he has the carrying costs of interest and such, he takes on some more risk with you already owning the lot. In his builds, he owns the house, and if you don't like it when it is all done, you don't have to buy it. If there is a problem with your build, you may decide to hold back funds, etc. He also needs to deal with your bank regarding getting paid. That would be a pain!

And yes, he is making profit on the lot. So he still needs to make the same profit on your build. Unfortunately, you paid full value for your lot...but he is still going to make that profit on the lot. There are actually quite a few times that builders do not pay the developers for the actual lot price until the final house is sold. The developer is basically holding back the loan on the lots the builder is buying. Also, say the lot is only $50,000...the builder may be only paying $30,000 for it. So, he is really only charging you a $30,000 premium to build on your own lot.

B Carey, the scenario you are describing can't happen. Just because "we don't like" the finished house, is not an excuse for us or the bank to say he is not getting paid. There are inspections and contracts for that. I don't recall a contract that says that just because "you don't like" the house, this gives you permission not to pay the final draw to your contractor.

Of course, if there is a substantial problem with the house, it should be fixed regardless of where the house is built (on their lot or our lot).

The draws will be speedy and timely, and he doesn't have to deal with the bank. We will deal with the bank. Again that is another ridiculous excuse for charging 50K more.

Also, is the builder paying his crew to drive from their home to his subdivisions for work every morning? No! Why does he have to pay them when they drive to our lot?

You said: "So he still needs to make the same profit on your build."

According to your analogy (that he has to make the same profit on my build even though we are not buying the lot from him), I as a CPA have to charge a client that wants only bookkeeping services the same price that I charge another client for bookkeeping and tax preparation services regardless of whether the first client is receiving tax preparation services or not. Hmm.... clever! Do I really have to make the same profit of two different clients that get two different services? I don't think so.

But it's not the same service. That is what most of us are trying to tell you. There is more of a risk and cost to him to build on your lot, rather than his own. As such, he is pricing it accordingly. Also many contractors and builders charge a premium because they can and their work commands it. Simple supply and demand. If you don't like his prices you certainly don't have to use him.

I do not have any experience in having a developer build a single unit, but I did work on a contract basis, and you as a CPA should be familiar with variable pricing. The less desirable the work, the more I charged.

jin333, he has 2 business divisions - one for building in subdivisions and one for outside subdivisions.

We chose him because we like the houses he has built - finishing touches and everything. The few other contractors that build outside subdivisions build very basic houses, and we don't like their quality at all.

We just love this particular floor plan he has - it has everything we wanted. We might make some tiny tweaks eventually. But when we were discussing the price with the builder we were talking solely about his floor plan.

Caroline Hamilton, I never said it is the same service! I said the opposite - it's two different services! You completely missed what I said.

I don't understand what is his risk? We will be holding the construction loan and paying interest along the way. If something goes south, it's on us. We have more risk than he does as far as the loan goes.

Jim Matt, if it's less desirable for him to build outside subdivisions why did he open that division and why does he provide that service?

No a builder doesn't pay for the subs to get to the house to start building, but if they have to then go from house A to house B, then yes they are paid for the time traveling. And for lots of other things.

Unfortunately, you're too busy arguing why you're right instead of listening to what everyone here is telling you. Did you come on just so everyone could agree with your thinking to make you feel better? Because that's how it is appearing.

Regarding the same profit. Let's say he is trying to make $100,000 profit per house built. As a CPA, I am sure you realize there are easier areas to mark up the COGS to build on this profit. Many builders already have allowances, so it is harder to get a % profit on those items you shop/decide on. If his cost per lot is $30,000. And assuming he does not have an interest expense or carrying cost on that lot due to an arrangement with the subdivision developer. So he is them able to get 20% of his expected profit as a result of the improved/perceived value of that lot. Now, he only needs to make up $80,000 rather than the full $100,000 on the rest of his build. He may do some of that by hiring full time employees. Some of the profit may come from using cheaper materials where the average buyer may not notice (insulation, inside walls). Some of his profit may come through change orders. That is why I am saying your lot cost is irrelevant. His lot cost is less than yours. He is NOT going to make less per hour working on your lot then within the subdivision.

Regarding the bank payments: The builder is able to manage all the payments for the builds he owns the lots for through his bank. One simple calculation each week. Now, he has to DOUBLE his bank payment time requesting payment from you, getting lien waivers, etc. He can easily pay his employees now. By adding your bank into the mix, he now has more paperwork to deal with. Nobody likes paperwork...while except maybe CPAs!

His employees are not just driving to your place for the day. They float from house to house. HE floats from house to house. The followup fixit list is a good example. Paint touch ups take little time. Driving around is what takes time.

You are not paying more more for the same service. You are paying for a premium service. In addition, he can't as easily walk potential customers through your home to market himself.

Even though he may be building nicer homes, he is essentially acting as a tract builder. You are asking him to be a custom home builder.

I never said you intended to hold back payment. What happens often is payment is held back on a custom home until items on the final fixit checklist are done. That final payment is his profit. By dealing with a buyer who wants to get closed on the house so they can move in, he lessens this hassle. When you own the lot, you can move in when you get C/O and assuming your bank will allow. In addition, assuming you are very unhappy with something in the house, he is under no real obligation to fix it when he owns the lot. He can simply let that purchase contract fall through and sell the home to someone easier to please. If you have read through many of the posts on this forum, you can see all sorts of examples of where buyers are unhappy with something and insist it gets redone. Kitchen countertops would be a great example. I will scream and refuse to pay if my kitchen counter arrives chipped. I will live with plywood counters instead of receiving a damaged countertop. By insisting the countertop be replaced, rather than repaired, I am eating into someone's profit. I own the lot, which gives me more flexibility to do so. If I didn't own the lot, I wouldn't even have the right to come and go on the property whenever I choose.

Everyone is saying the same thing. There are many reasons why it is more expensive to build on your own lot than the builders lot. Yes, it stinks. I think you will find a similar scenario with the other builders.

The right answer is "vote with your money" and either negotiate a price you can live with or move on.

However, if you decide to try to make this transaction happen, at least acknowledging that this build isn't exactly the same as his "5 houses all in the same place build", would be a good place to start that process, so perhaps you at least look somewhat reasonable.

This is a silly thread! No one here knows you, your contractor or the situation. Just have a meeting and friendly discussion with your contractor. Then make a reasonable decision. If you like what he does and you like his plan, that's a plus. Move on!

There is a huge difference in the amount of energy and time a contractor invests building a true custom home-- with all the client interactions, decisions and delays-- compared with a home the contractor builds making all the decisions himself/herself--and assuming all the risk--in house. A premium for the custom version is not at all unreasonable.

There are a lot of answers addressing why the G.C.'s cost might not be the same and they may all be correct, but I am not sure they should really matter.

The answer to your question is because he can charge more. Assuming the houses cost the same thing to build doesn't make your house equal to another house. His house on your lot is a different market than his house on his lot. He may have more costs or he may just be competing against different builders.

Either way, I don't think the cost to build the same house somewhere else is a relevant cost. In the end, he is either cheaper or more expensive than other people who will build a house on your lot and the house is either higher or lower quality. The price of the house on another lot is only relevant to you if you are willing to sell your lot and buy the house there.

On a related note: I subsidized my return to school with consulting. There is a very specific type of consulting I did that very few people had experience in, and when I bid those consulting jobs I bid pretty high, because I could still be very competitive in that limited market, however, I could starve ten times over waiting for those gigs to come around, so I bid other consulting work at a lower price because I had to eat.

Another anecdote: I am having some masonry work done inside a home. These guys are very busy right now, but my job is somewhat appealing because it is in a conditioned space. They gave me two price quotes, (1) the rather high we are busy right now rate, (2) the very affordable December is cold and can you wait rate.

@cpartist, no I didn't come here to argue. As I said in my original post, I was asking what everyone's experiences have been with contractors building on your lot and is it the norm to get the same quotes as someone who doesn't own land compared to me who already owns a lot (and will be prepped for building). All I've heard were opinions based on assumptions (some of them false) and no real experiences.

The only difference that makes sense to me is the location - instead of in one of his subdivisions, his crew will be working somewhere else. And yes, he can calculate this into the cost but 50K? Also, when he starts working on my lot, it will be ready-to-build - no additional work will be required like land clearing, road building, surveying, permits, utilities, no fence required on our lot (all of this is very expensive - we've already poured 20K into all that and there is more work to be done) compared to starting with raw land when he purchases the land for a subdivision. We visited one of his subdivisions that they are just starting to develop right now. It was all wooded, it wasn't even cleared. So, by building on our lot, he will eliminate these expenses for prepping the land that he would usually have in a subdivision.

According to all of your arguments, it's always more expensive to build on your own lot with a general contractor compared to buying a full package from a contractor (house & lot).

@jannicone, you said: "if you decide to try to make this transaction happen, at least acknowledging that this build isn't exactly the same as his "5 houses all in the same place build", would be a good place to start that process".

That's the point, we are talking about exactly the same house & floor plan. In order for us to compare apples to apples, we asked him for a price on exactly the same build on our lot.

@Charles Ross Homes, the homes he builds in subdivisions are custom built homes. You choose the lot and the floor plan (you can even customize it as you wish), as well as all specifications, and he builds it for you. What is standard for all of his houses is the quality of work, the finishes, interior colors and the exterior look to some extent. And we will keep all of these the same for our house as well. His houses are beautiful and do not look like a cookie cutter houses.

Also, based on his contract, he will have as much interactions with us as with a client building in his subdivisions. We get the same type of customization that one of his subdivision clients gets. You falsely assumed that he makes all the decisions when building in a subdivision - he sells the lots to customers before he even starts building as a package with a house plan that his clients have customized to their liking that he will later build.

You are making some false assumptions that our home is going to be more customized than one of the houses in his subdivisions. But we were talking about the same build and floor plan.

Virgil is right. Just have a conversation with him asking him to explain his bid. Be straight and say you were figuring the house would be 350k since you have the land. He will explain. The thread gives many reasons why he may be charging more. Biggest one is really don't think he is paying 50k for a lot like you calculated. Likely half that. If he is the best builder and the one you truly want is 25k premium worth it to get the house and builder you want?

gpeach1, yes, we will talk to him again and discuss the price.

I didn't calculate that he is paying 50K for the lot. I just said that's what he is "charging" for the land after the house is built. The 0.5 acre lot didn't cost him that much! 50K is probably his cost for the land and a markup he puts after the house is complete.

he builds in subdivisions are custom built homes. You choose the lot and the floor plan (you can even customize it as you wish), as well as all specifications, and he builds it for you.

What you are describing isn't custom built. It is just tract building. Custom building is you bring plans from an architect or designer to the builder and have him build your plans the way you want. There is no "customization available" as the entire thing is customized for your needs, not just adapted to your needs. The difference may seem subtle but it creates a different process. Having the builder customize his plans still creates efficiency for him, where a full custom build has no built in "do this thing just like we did five other times" efficiency.

no additional work will be required like land clearing, road building, surveying, permits, utilities, no fence required on our lot (all of this is very expensive - we've already poured 20K into all that and there is more work to be done) compared to starting with raw land when he purchases the land for a subdivision.

In the area I grew up there are several builders who are really developers. They buy hundreds of acres of land for $5,000 per acre and spend a couple of million dollars developing the land, and then sell houses built on .12 acre lots. The basic houses are all built at cost because all of the profit comes from the lot. When they break it down they are charging very little for the home and $30,000 for the lot. For a 100 acre development he will make practically no profit on the homes and more than $20,000,000 on the land.

What makes you think that the builder is allocating his profit equally? As a CPA you should well know that money is fungible, the builder would be in the exact same position if he sold the house for $399,000 and the lot for $1,000. So he may well be allocating his profit to the land and building the house for very little.

bry911, the point i am making here is not whether he is tract building or not. But rather that the house we were talking about is EXACTLY the same (floor plan & customizations) as the one we wanted built. People here are arguing that because our house will be more customized, it is not comparable to a house in his subdivision. That's not the information I am giving you but something that you made up or assumed. We were NOT talking with him about a more customized house. We were discussing the same house when we talked about the price.

There is no point in arguing based on the wrong information.

Again wrong assumptions that his profit comes solely from the sale of the land to his subdivision clients. We know for a fact that there is a markup on the building cost.

It looks like yall are arguing for the sake of making your own point. And just throwing false assumptions out there instead of trying to understand the situation and the information I have given about the contractor.

Based on yall's arguments it is always more expensive to build on your own lot with a contractor than to buy a package from a contractor (house & lot).

I've argued none of your above points.

Your GC pays his folks to work on houses. If they are all in the same place, expense are lower, more predictable, and more efficient. He may also be able to get by with some higher ratio of construction superintendent / house.

For example, his superintendent can manage crews working on 5 houses in the subdivision. I would expect that to go down to 2-3 if those houses were located in different neighborhoods. I am guessing the superintendent would still like to be paid as a full time employee, therefore, your build adds cost (or - decreases efficiency - same net result)

Take the painters - same deal - they can stay busy moving form house to house, priming drywall, to heading down the street to paint siding, to final painting in house #3. Or, they can pack up all their &^$^, clean it, remove their ladders, haul it to your house, set it all up again, FOR THE DAY, remove it at the end of the day to go back to the main site, etc.

Multiple that scenario for other subs.

But you simply don't want to listen.

Based on yall's arguments it is always more expensive to build on your own lot with a contractor than to buy a package from a contractor (house & lot).

DING! DING! DING! We have a winner. Yes that is exactly what we are saying. It always costs the consumer more to have a house built on their lot rather than building on a builder's lot. Why consumers have to pay more doesn't really matter.

People here are arguing that because our house will be more customized, it is not comparable to a house in his subdivision.

You are making a different assumption, but still an assumption. You believe that there is no efficiency created by building a house on his lot. We know that isn't the case, this is why Ford doesn't show up at your house to build your car in your driveway. It is cheaper to build 5 houses next to each other than it is to build 5 houses in 5 different places.

I also didn't assume that your house costs him more, I just noted that maybe he charges more because he can. Before I left to become a professor (of accounting) I worked at a big 4 firm. We didn't charge every audit client the same amount even if we thought they would be the same amount of work. Different clients have different risks and different markets.

You are a CPA therefore at some point you must have had relevant costing. So please explain to me, how much he charges someone else to build this exact same house is relevant to your decision. For that matter please tell me how his profit is relevant to your decision.

Neither of them are.

No we are not making the assumption that it will be more expensive because you want it more customized. That is you not reading what we are all trying to tell you.

We have all explained it over and over again but you refuse to want to believe that because it's not exactly right next to the other 5 or 10 houses he's building, that it will not cost more. It will.

The old saying, Time is money is one of the factors here. Whether that equals $5000 more or $50,000 more doesn't matter. All that matters is how much more the builder thinks it's going to cost him.

And Bry brought up another excellent point.

Many builders don't make money on the house, but make their money on the land they sell. They buy the land for pennies on the dollar and then sell it for many times that amount, so their profit is in the land, not the build. If your builder works that way, and he's building you a house on your land, then he still has to make a profit somewhere. So he tacks on what he considers his profit from the sale of the land. Basically you're paying a premium for the land and getting the house built at cost.

For anyone reading this thread now or in the future, be careful to ensure that you don't let information that isn't relevant into your decision. We naturally do this a lot, and it takes some effort to manage it.

In the end, the only things that matter are what you are paying and what you are getting. Suppose two builders build the exact same house at the exact same quality, in the exact same amount of time. The first builder gets a great deal on the materials and decides to not pass the savings on to you so he makes buckets of money off your home. The other builder doesn't get a deal on materials and so is only making a reasonable profit.

Which one should you choose? Well, since the houses are the same the one who charges less is the better choice. How much money he makes and how he makes it isn't really part of your decision.

The bottom line is that he, and every one else, will charge you, and everyone else, as much as they possibly can so that they can make as much profit as they can possibly make. Yes, they will charge you as much as they possibly can. There is no altruism at work. They aren't looking out for you, trying to give you a fair deal or anything like that. Not one of them is looking to limit themselves to a "reasonable profit" to help you out or be fair to you. They are perfectly happy to make as much money from you, and everyone else, as they can make. They want to make as much profit as they can, so they are going to charge as much as they can charge. How much they can charge depends upon what the market will support. They are charging the maximum they can get away with charging for the houses they build on their own land and they will charge the maximum they can charge to build on land that other people, like yourself, already own. There is no, "I NEED to do this because of xyz." Think more along the lines of, "I WANT to make as much profit off of everyone as I can possibly make." The price is determined by what people, like yourself, are willing to pay. If enough people say no, and they need work, the price will drop.

veggiegardnr is correct. This is not charity, it is business. The OP/lot owner in this case just has to decide whether or not to do business with this builder.

Johnson0476, my only advice is to pace yourself in terms of several things -- money and, more importantly, time and energy. If you are embarking on a home build, custom or otherwise, it will be a LONG process ....

I'm curious as to why you are looking at this in the way you are - meaning that he is charging you the same for 'just the house' as he is charging others for 'house+lot'. I'm not sure why you are bringing the lot value into this - it is incidental. He is charging you $400k for the house, and those who are buying in the development pay $350k. So, depending on which way you look at it, they are getting a 12.5% discount or you are paying a 14% premium. That the $ difference of $50k happens to be the same amount he allocates to the upon completion is coincidental.

But at any rate, as a CPA I'm surprised you put any stock in those allocations as being economical determinations. Likely he just allocates it in a way to minimize his tax burden, or perhaps he has investment partners and he allocates in a way to maximize his share of the profits vs. theirs.

Also...the more money you pour into getting your land ready to build a house, the greater your need may be for someone to build that house for you. This is true unless you can, and will, sell the land and get all that money back. From what I've seen, land can be hard to sell and any money put into it can be hard to get back when you do sell. Have you considered the possibility that, the more they think you NEED their services, the more they think you'll pay for those services? They don't even have to charge you the same amount as they'd charge someone else. They can, and many will, charge you (as an individual) more than they'd charge someone else. If they can get you to pay more than someone else, they will. It's business, not "fairness." I know this sounds awful, and I'm not defending it, but...that's the way things work.

bry911, you said: "How much money he makes and how he makes it isn't really part of your decision."

It is not part of my decision how much money he makes. But rather how much he charges me for building the house.

It's simple.. if someone else can build your house on your lot for 350K would you not choose them rather than someone who is going to charge you 400K. (just because that's how much he would charge for the same house in one of his subdivision.)?

Also, it's not always more expensive to build on your own lot. If you are smart enough, you would do some research before making generalizations like this one.

cpartist, you only talk about the time value and the travel cost associated with building on my lot. I understand that and I agree that it won't be the same as building in a subdivision. It's a different "service", as I already said. But they also have an advantage by building on my ready-to-build lot compared to a raw undeveloped land. Just something to think about. And to answer your question, it does matter if they charge 5k or 50k for that. It might not be a lot of money where you live, but it is here.

I will stop here.

It is not part of my decision how much money he makes. But rather how much he charges me for building the house.

Yes! Exactly. And thus, your (only) decision (really) is whether you want to pay that amount. Period.

it's not always more expensive to build on your own lot.

Well, in this case, it is.

I am not sure why you keep expecting facts to change.

$50,000 is a lot of money. I don't think anyone above has said it is not. No one wants to pay more than they have to or more than they believe is fair. I understand this builder would build a home with a plan that appeals to you and that is a strong emotional draw. It is hard to walk away from, if you choose to.

Best of luck with your decision.

It's simple.. if someone else can build your house on your lot for 350K would you not choose them rather than someone who is going to charge you 400K.

You didn't say there was someone else who would build your house for 350k. If you got a bid for 350k then why did you post the question in the first place? If you haven't got a bid for 350k then why are you assuming that someone will do it for 350k, if you are making up numbers why make up 350k? Why don't we just say 27 bucks? I mean 27 dollars for a brand new house would be a great deal so let's just use that imaginary number.

Also, it's not always more expensive to build on your own lot. If you are smart enough, you would do some research before making generalizations like this one.

I admit that I am kind of a dummy. Every single day I wonder why people pay me for my advice. Although. in this particular matter I am speaking from experience and I tell you unequivocally, that building a one off house on a lot developed by an owner IS MORE EXPENSIVE THAN BUILDING THE SAME HOUSE IN A MULTI-LOT MULTI-BUILD SITUATION. This is true every single time so long as the lots are similar.

Now there are certain situations where that expense may not be passed on to the buyer. So if you are planning on sleeping with the developer you might get a better price.

With respect, I don't think you are really looking for advice, rather you would prefer validation. You came with a simple question based on a simple assumption and instead of getting an answer your assumption was challenged. Speaking from experience, this board is short on validation and long on honest criticism.

You have your answer from people with knowledge and experience. If you don't agree with it, then ignore it. If you want to educate us, come back after your house is built.

I think you should just ask him.

Well, op, I actually completely understand your question, and would be asking the builder for clarification as well. I am sure this thread has been frustrating for you bc no one apparently has dealt with this exact situation. There is a high end production builder in our area who also advertises a side business of building custom homes on your lot with your plans or theirs. It would be interesting to compare the pricing, but I don't know anyone who has built with them. Please do check back in after you meet with the builder bc I am genuinely curious how he will respond to your question. Good luck to you.

I wonder what the OP found out after meeting with the builder ..

He found out he was being charged a PITA tax. Because, well, all of the above points, and the PITA tax factor that his build will obviously be. Any builder that spends a couple of hours with someone as hardheaded and argumentative will add that tax to their estimates as well. Or, decline to be involved t all. Life is too short to work for people like that. Even with a healthy profit.