New Home - "Design Center" selections conundrum

6 years ago

We are having a new home built by a local builder, and just received our quote on "upgrades" from the "design center" - another local company. We were shocked at pricing. After asking a lot of pointed questions, the rep advised that the builder charges around a 50% mark-up on top of the design center's prices, which of course includes their profit margin as well. For a $12/sqft retail price mosaic band in the shower, they are charging $50-$60/sqft depending on the size of the mosaic: $500 for each 12" vertical mosaic or $310 for each 6" (we have 10 ft ceilings in the bathrooms). These prices seem crazy to me for 5 or 10 sqft of tile! I'm trying to figure out if it's worth it or not. In our master shower, the mosaic band would be on a wall that is 6 ft wide, and I'm thinking that a 6" band may look silly. Thoughts and or reassurance welcome! We also want to "upgrade" the granite that is in our kitchen and bathrooms to "viscont white"...and they are charging $4500 for the change of color. The tough part is that we don't know how many sqft of granite are in our home, but our kitchen and bathroom vanities are not that large. Is this actually a reasonable price? We are so beat down from this process, and the thought of having a lot of projects after moving in is daunting....especially not knowing the difficulty level of completing them...but the price tag is quickly increasing.

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cpartist

6 years ago

And this is why sometimes working with a custom builder comes out cheaper.

Personally, I would invest my money in the things you can't see that add comfort to you such as HVAC, windows, soundproofing, etc.

For the pretties, I would go with whatever the builder is offering. Why? Because 5-10 years down the line when you go to sell, both the builder's offerings or the upgrades you're paying 5x the price for will both be out of style.

If you decide to stay in the house long term, then slowly you can make changes to each room as you decide and not pay such an exorbitant premium.

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Comments (9)

PRO
AMD Interiors, LLC
6 years ago
You will be stuck with this unless, you feel comfortable replacing the finishes after the fact. I have worked with quite a few clients who have ended up under these same circumstances, and we have successfully replaced the contractor's most basic finishes with the same or better products than they had originally wanted at half the price.

The high markup that they charge is based on the fact that they know you have little or no choice but to go ahead and upgrade or be faced with tearing it out after you move in. The latter is the option they are banking you wish to avoid. Additionally, most people roll the upgrades into their mortgage, a benefit that costs even more in the long run, but many won't afford to pay cash for those when you complete.

The terms of your contract are important, as well. Some contractors will allow you to pull out a percentage or all of your allowance and purchase product on your own to provide. They will likely still charge profit and overhead, but this might help you get away with some upgrades. In spec home communities, this is likely not the case, but it would never hurt to ask or carefully review your contract to see if you can negotiate it.
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Forgot to add that he saved us money by incorporating all of our needs and many wants without going over in sq footage. He also came up with architectural details that would give the house character very inexpensively. He loaded us up on storage and made the most use out of stadard windows. Also incorporated brick and stone with hardi in a way that kept the expense down but provided a huge visual impact. It is also unique from the other houses in the neighborhood and area, but still blends nicely so that if we ever resale we will standout among the homogenous designs most builders put up in our area. So that will payoff later. I have had someone on my hoa with a house significantly bigger than mine rave over the design and wish she could move in. Also he could have...but we chose not to do this... make it so the first floor was the only floor finished so that we could finish the second and basement later without anyone being the wiser. However we lost our minds and now are finishing the whole basement.
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It is laughable how these things work. Salesman? YES they are. Here is the dumbest strategy the home salesperson tried to use on me. She said, "Well, you have $xx,xxx ( many thousands) left to spend." "What?" I said. She said, "Oh yes. Typically our buyers spend 20% over the price of the home on upgrades. " It is a strategy that psychologically gives a person permission to spend. I said, "Not me.'" (As a side note, I built my own homes in the past and recently helped a friend build his house. I just did a MAJOR rebuild of my current home. Plus for years I have studied the latest design trends. But never have been under the thumb of a design center. )
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apple_pie_order
6 years ago
Most people are shocked at the design center's upgrade prices. I agree with cpartist on priorities. I'd skip the mosaic (will go out of style). Look at their standard grade granites.
millworkman
6 years ago
Welcome to the world of purchasing a developer/tract home. Put your money and or upgrade into the bones (windows, insulation, framing, plumbing, etc) of the home, things that are not easiy chnaged out down the road. Paint interior doors, trim, cabinets, tops are easily done later by anyone of your choosing.
Denita
6 years ago
last modified: 6 years ago
Agree with everyone above. The builders make huge profits on upgrades. It is far better to spend whatever allowance for upgrades you have in your contract on the structural items or bones of the home as millworkman puts it. For the cosmetic items - take the standard. There are two excellent reasons to take the standard options:

1) the price charged by tract builders is outrageous for the upgrade, nowhere close to market charges but many times what the market charges.

2) you can choose from all available materials after you close - but the builder has a very small limited number of choices. Why limit your choices to just what the builder's design center has when you can open up your choices exponentially. Besides then you have time to live with the standard selections and when you do decide to upgrade you can make thoughtful upgrades/changes based on what you want to do.
One Devoted Dame
6 years ago
If you don't have small children (I have 5 + 1 in-utero), then I would totally get the standard finishes for everything, and upgrade later.

We carefully selected our upgrades, strictly keeping to a comps-based budget, and identified our current priorities as well as future inconvenience.... So, we focused on the kitchen. We are a single income, homeschooling family of special needs, and having the kitchen torn up for remodeling was something that we weren't willing to do while the kids were so little.

We didn't get anything fancy like awesome accent tile or patterns. We probably would've been more tempted if they had anything I actually liked, lol, but I was pretty strict with the rules. My husband overrode some of the rules, but we still ended up below budget (and a bit below comps for the neighborhood).

We built for resale, though, so it was easier to stay detached.
artemis_ma
6 years ago
Wow. I read these threads and realize how lucky I am to have a GC who is a custom builder who doesn't work on the "allowance" system. He may be slow, but I don't get charged for picking out tile, faucets, or lighting.
User
6 years ago
Agreed Art, makes 2 of us. "Design Center" equates to cash. Put your money where you can't see it. HVAC, windows, insulation, ALL LED fixtures etc. Thr one thing we did was pick out everything from fixtures to light switches. I gave our builder the total cost. Allowances are for the most part a joke. Triple them and you might be getting close.
rockybird
6 years ago
Wow I am so sorry you are going through this. If it were me, if you are happy with the cabinets, the only upgrade I might consider is the counters, provided you are happy with the cabinets. Does that upgrade price include ALL the counters in the house? I'd also call and price it just to see how high he is upping the price for the upgrade. The reason I'd do the counters is that for me at least, it would drive me crazy to look at counters that i dont really like. Other than that, I wouldnt do the shower. I think the band around the shower will go out of style if it hasnt already. I bet you wont even notice it's not there down the road.

New Home - "Design Center" selections conundrum

cpartist

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AMD Interiors, LLC

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