I'm in Central Texas, almost done with a 2000 sqft tract home, and those allowances seem really, really, really *super* low to me. Ridiculously low.

Just to give you an idea, my builder charged $3500 to upgrade the back of the house to brick (from siding), and it only amounted to roughly 50' of brick wall, 10' high. Granted, that included a bit of extra foundation work (a lip had to be added, for the brick to sit on), but my husband and I thought it was fairly reasonable, all things considered. But maybe we're being taken to the cleaners, lol.

Have you priced out some of the other items on your list, yourself, to see what kind of things you'd like and how much they'd cost? For example, appliances for the whole house at $5500 seems like you'd decide on a fridge ($1500), stove/range ($1500), maybe a dishwasher ($300), a microwave ($300), and a washer and dryer set ($1500), and just not have enough, if the builder adds 10%-20% on top of retail prices.

Do you have any plans to speak with any other builders, to get quotes? I have to say, though, that without having specifics (exact model numbers for things), I would find it difficult to compare/shop, because it would be hard to know exactly what you'd be getting.

Those allowances are comical. Incredibly low. We are buying our appliances for our house up front, can't see taking a 15 year note on those. Our cost for wall oven, cook top, dishwasher and refridge is $9500. Lighting is also way way low. You can easily double that and that would not include recessed cans etc. Same with plumbing fixtures. I just went through pricing the above about a week ago and good name brand products but those are online costs.

Forget cost per square ft. You cannot buy a house per square ft any more than you can buy a new truck by the pound.

Revisit builders who, in your opinion are offering home of similar quality. Look at what is STANDARD in the home. Look at everything, fixtures, wall and ceiling finish etc Builders typically make a tidy profit in "upgrades". What may be standard with one is an option with another. Compare everything from the doors to finishes etc, counters, cabinets The whole nine yards. Take photos along the way. If a model home, overlook the glitz. That will give you an idea of what you are getting for your dollar. Get a list of options, upgrades and prices from every builder.

Whrn you are done and it's a lot of work to do it right, you'll soon figure out where the best value is. That's what I'd do anyway.

Those allowances...

$2400 for landscaping? Did I leave off a -0-? Is there a homeowner association?

You're spending money for quartz countertops and then putting in vinyl flooring?

7' cedar fence with caps is included in the 2400? And full sod? Idk...things must be really cheap there.

Hope you're planning on only getting builder basic appliances for that amount.

And $2400 for landscaping and you need two oak trees? And sod? Does that include a sprinkler system because on my 9000 square foot lot, my sprinkler system will cost more than that.

Where it says tile crew is that the allowance for the labor or for the tile itself? If for the tile itself, good luck because that won't even pay for white subway tile from HD.

Those allowances are not for a custom home. They are for a tract home. There is a big difference.

375K x 1.5 for a price for a real custom house with actual upscale choices that aren't shiny fools gold to distract you about the flash over substance. That joke isn't even tract builder level. The tile whole house quote is less than 1/3rd of what it takes to build one properly waterproofed shower that won't rot out your home. Vinyl is fine in an entry level home, but no way does anyone anywhere put it in a something above low mid level. That's builder's BS marketing striking again. $2500 for lighting gets you one boob light in every room, and a big ugly central fluorescent in the kitchen, and probably $20 ugly Depot sconces in the bath. Or, it gets you a nice chandelier for your foyer, and one for your DR, and that's it.

That paper is the biggest joke I've seen in forever. Run fast from that likable con man. Unless you are actually building just an entry level home with everything as cheap as you can get it. If so, then you're overpaying by $275K.

I've built a couple of homes, and purchased most on your list and most of these allowances seem reasonable for a mid-range home.

Maybe I'm not seeing all of it, but your list and his list aren't matching up on all the items. You want a 9.5 foot island. You requested quartz, but he is quoting you granite. A small kitchen without an island will cost over 3K for quartz. Where's the carpentry cost for the built-in you've requested? The landscape allowance and flooring allowance also seem too low. Where's all the other items you've requested on this bid?

Is he a custom home builder? Or a tract builder who does an occasional home on the side? He's pricing it like a tract builder. My guess is his/her markup is anywhere from 36-40K on this. (He must have better than average labor costs than other parts of the country with some of these allowances). And yes, it can be done for $153 square foot, but with you getting all on your list? I'm really doubting it.

Why not just sit down with this guy and express your concerns? I'd lay it all out.

When I see quotes ending in .05. .45.......etc etc......those quotes are COMPLETE BS!!!!!!!!! It's ALL marketing BS!!!! Texas has had one of the most affordable houses markets in the US for years but now that housing is picking up again, the GC's are taking advantage of it to make more profit.

Central Texan, recent custom home builder. I wouldn't even begin to speak with builders until I had a solid architectural plan. As my husband once told me on our latest, total custom home: Why would we hire a crew until we had the "script"?

If you do it backwards, just understand that your builder- not you- dictates the architecture/design. And he/she will do everything he can to cut corners, during the build, to bump his profit.

"Estimates" are worth exactly what one pays for them. The only cost which has any relevance is on a contract for construction, signed by the builder, based on a set of architectural drawings and specifications. Even then, one has to look carefully at the sections on allowances (best to have no allowances), change orders and method of payment (lump sum, cost "plus" something, or time and materials). This situation looks questionable.

I dont see how he can possibly give you a quote without seeing a complete architectural plan. Also, those quotes are incredilbly low. I mean impossibly low. I hope this guy isnt going to start charging you a bunch of upcharges.

My thoughts are, "Know exactly what you want before you sign. And don't change your mind."

Do your builders offer limited selections, from particular vendors? If so, look at what they offer, and make your selections, having them price everything out ahead of time. If you can literally choose anything you want, give the builders exact manufacturer names/styles/numbers/etc., and have them price it all out accordingly.

I would avoid "unknowns" and seriously dislike surprises at closing (especially if the appraisal doesn't match your loan -- you are responsible for any amount over the appraisal, and appraisals are determined by recently-sold homes in the neighborhood/area). Assuming you're even getting a loan, lol, if not, build whatever you want! :-)

ODD and Virgil hit it, KNOW what you want and do NOT change your mind. The allowances are a joke. We know everything we want from cabinets right down to the type of sod we want. I just got back from a meeting with my elevator contractor. If you put everything you want into your contract from your selections, there are no surprises. I've got a massive spread sheet that took months to develop but, nothing is left to chance. There won't be per se any or very few allowances, everything will be documented item by item. We picked everything out and based upon our options, I gave the builder the numbers for cabinets, eletrical and plumbing fixtures. I'm OCD as hell and don't like any unknowns.

Sounds as if you are going to builders who own the land, and who build the building and then turn it over to you upon completion. That's a tract house. On the other hand, if you own the land, and are commissioning an architect to design a home, and contracting with a builder to construct it, then that's a custom home.

I have no idea what a "semi-custom" home is, but I suppose it's a tract with some modifications.

There's a big difference in how houses are priced in these options. "... "at what point is the price of the house determined"...is a very good question, but there are lots of answers. But all of the answers are based on "it depends"...

For example, the price of the house "may" be stipulated at the outset, if the construction contract is a lump sum contract. All other types of construction contracts ( cost "plus", and time and materials) do not initially set the final cost of the house to be constructed, unless a "cost plus, guaranteed not to exceed" contract is used). Other than these two types of construction contracts, the price of the house is determined when it's completed. And even with either of these two contracts, the final cost of the house may differ from the contract sum, based on the following two situations:

1) Allowances: Allowances are a notorious loop hole which almost always cause the cost of a house to increase, since many allowances are either too low from the outset, or the owners have something else in mind which cost more than what the allowance will allow. The first best way to manage allowances is not to have any. The second best way is to ask the builder to put in writing what sort of material, work and quality can be expected for each specified allowance, so that the consumer knows what they will get for the money. Of course, this depends on the integrity of the builder to properly identify the quantity and quality of materials and work covered by allowances. The "first best way" to manage allowances is still the best way!

2) Change Orders: When an owner changes their mind and wants changes to the house during construction, a change order to original contract for construction is necessary. This includes changes for items and work over and above an "allowance". A change order is a formal amendment to the initial construction contract, signed by owner and builder, which identifies a change in the scope of construction from the scope identified in the original contract for construction. A change order also identifies the cost to make the change. Change orders, derived from owners who change their minds and the scope of the project during construction, is another notorious loop hole affecting final price of the house. One of the ways this gets quickly out of control is for one spouse to smile and say, "well, as long as we're building, let's just add this--after all it's going to be our 'forever house' and I've always wanted this". The best way to manage change orders is to have none. Don't start construction until everything is fully understood and satisfactory. And don't change your mind once construction starts.

So..."at what point is the price of the house determined"? The answer is "it depends"!

Appliances should have enough for the side by side fridge.

You probably don't want a side-by-side. French doors are the newer style: Side-by-side refrigerator "up", drawer freezer "down". Sometimes a wide refrigerator drawer in between.

Your estimate isn't nearly detailed enough. Thoughts:

- Your builder has allotted 2600 for "fixtures, toilets, etc. + 243 for bathroom sinks" This is wide open: How many toilets do you need? How many sinks? Pedestals vs. undermounts in vanities? How many faucets? Does this include a single simple showerhead, or are you expecting a handheld shower head + a rainshower + jets?

- What kind of no-jet tub are you getting for -- is that 1007? Is it a tub in a deck or a clawfoot tub?

- I promise you're getting a builder basic two-bowl stainless steel kitchen sink for 270.

See how these are just too vague? You can't know what you're choosing here. I fear that with these numbers you're going to end up with a lose-lose choice: Pony up more money to get what you thought you were already promised ... or opt for builder basic items.

Have you priced out some of the other items on your list, yourself, to
see what kind of things you'd like and how much they'd cost?

Good advice.

Those allowances are comical. Incredibly low. We are buying our
appliances for our house up front, can't see taking a 15 year note on
those.

I totally agree with buying these things out of pocket.

Regardless, it'd be smart for the OP to know what type of appliances, light fixtures, etc. he's considering. My own appliances are running about $6000, but I've picked every one of them myself, and I know exactly what I'm getting -- and I'm planning on picking them up myself for sale prices. I'm sure that this price DOESN'T cover anything fancy such as separate cooktop and double ovens or steam /speed ovens, dishwasher drawers, built-in microwave, stacked or front-loader washer/dryer. The OP needs to specify what he expects for that $5500 to see whether it's realistic or not.

Most of the others have "standard" appliances, etc.

"Standard" means whatever the builder says it means. You need to ask for specifics.

Granite/ vinyl plank is standard in most of the new construction around here.

I'm not building on a budget, but those are exactly the choices I'm making.

I have no idea what a "semi-custom" home is, but I suppose it's a tract with some modifications.

"Semi-custom" means whatever the builder wants it to mean. It could be as simple as, "You choose the floorplan, and you choose your own colors and finishes", or it could mean "Bring me an internet floorplan, and we will adjust a few things to your liking." There's nothing wrong with either of these choices ... but you should know what you're getting as you go into the deal.

".."Semi-custom" means whatever the builder wants it to mean..."

Sums it up pretty well! Sort of like a "builder's estimate"! :-)

Virgil strikes again ! MsP is right there. Those are words of wisdom. Your contract should spell out everything almost down to what type of nails are to be used.

Most of the others have "standard" appliances, etc.

My builder's standard appliance package is all Bosch appliances and actually Bosch 800 series. Your builder's standard appliance package may be builder basic Amana appliances. You need to find out what is standard.

Good points CP. OP just a suggestion. Take some time and go through your plans and photos and make a list on paper as to what you want for lighting on the inside and outside of your home. Remember this means every single light inside and out. Now take a trip to Lowes or Home Depot and pick out the fixtures for each area and make an accurate list with prices. After you leave the lighting department, ease on over to the appliance department. Pick out your appliances for the house and write down the info on appliances and the prices. If you do this right it'll take you a good while. Once your done, compare your choices to the allowances. Let us know how you do with that!

With our builder, when we started this process, we went "shopping" with their designer. She took us to Ferguson's where I pointed to whatever sink I liked, whatever plumbing fixture, etc. We picked for each room in the house. That total number then became my plumbing allowance. (However I decided I could be quite happy with less expensive plumbing fixtures and so now after choosing for real, I actually am under my plumbing allowance.)

We did the same for tile and flooring and once again I'll come in slightly under. (And I chose handmade tiles for my fireplace, marble for my bathroom and cement tile for my friend's entry hallway.)

We did the same for cabinets and at first I would have come in way over budget, but then I found a Mennonite cabinet company and now am coming in under budget.

We also did the same for granite.

This allowed us to upgrade more important things like our HVAC, electrical, insulation, etc while still remaining in budget.

Exactly what we did, every fixture electrical and plumbing, fliooring, cabinets, HVAC., elevator etc. I gave our builders my numbers so I know they're real. Ambiguity had no place in construction contracts. It can lead to unexpected costs and head aches.

You can guarantee ALLOT of up grades to increase the GC'S profit!!!!!!!!!!!! I hate to say it but if you have already given the GC your maximum amount you have been approved for a mortgage, they are going to push it to the MAX for their PROFIT!!!! That's the name of the game! As I said before, around 99% of the people have NO idea what it actually costs to build and GC's take advantage of this!!!!!

Contractors have to feed their families like everyone else, and if a non-impaired adult decides to give their money to the GC in exchange for a house, I don't consider that taking advantage of anyone. ;-)

I understand they need to feed their families but NOT taking advantage of RIPPING people out their money!!!!! They can make a reasonable profit without compromising morals!!!!!!!!!!!

About the appliances: y'all may have super deluxe $12000 Miele fridges etc but here in Dallas the average new home comes with the $99 special (actually it comes without a fridge - that's somehow one of the appliances that isn't part of a home purchase).

I don't believe I've seen a $99 fridge.

Just realize a fixer upper comes with its own headaches and problems. So you open a wall and discover the electrical hasn't been updated in 50 years and is now a safety hazard or the pipes are rotting inside the walls.

(Now having said that, if I had been able to find an old house with good bones, I would have definitely bought the old house and renovated instead of building new.)

Some days I regret not doing the fixer upper myself.

Good luck.

For the benefit of anyone pursuing a similar path, it's worth defining terms:

A "quote" should be a firm price to construct and/or remodel a home based on detailed plans and specifications. The detailed plans and specs should clearly articulate the scope of work (please don't let this devolve into the designer vs. architect argument. I don't care who prepares them as long as they are complete, accurate and the details of construction comply with the current building code.) Quotes will sometimes include cost allowances for items that a client gets to select. Allowances can be a potential problem area, but you can avoid that by simply shopping beforehand and testing whether the suggested allowances are in line with your particular selections. If they're not, get them adjusted up front.

An "estimate" is someone's best guess at what you might spend for a scope of work with little or no definition and usually without any plans. Estimates routinely get folks--builders, remodelers and homeowners alike--into trouble because they are usually guesses and the most credible estimate (guess) is invariably the lowest one.

Good comment, Charles, for everyone to recognize the difference between a "quote" and an "estimate".

estimates like this are what give true construction professionals heartache. This is not a custom home. These allowances are not realistic. This is a bait and switch. I see when people are looking for a builder, they often want to believe that someone has a magic wand. That Joe somehow can buy things cheaper than frank. That's setting yourself up for failure. Find someone that you can trust, someone that you like and someone that will be involved with you direct throughout the process. You don't want to do all of your negotiations with the owner of the company and then never see him again. That's not a home builder, that's a business that builds homes, two very different things.

Most ridiculous prices I've ever seen, they don't make any sense at all...

Yeah these seem kind of unrealistic. I have recently finished doing some internal renovations and I have also hired a company that does prior estimations regarding prices because like so many these days we are all on a very tight budget. I have been looking through many independent contractors as well as building companies while choosing the crew that was going to do the internal works of my home and I ended up choosing a local company in the suburb of London because they had one of the best reviews as well as their building quotes were one of the most reasonable ones that I received. They did a really good job as well. I am very happy with the end result