Construction Cost Breakdown
by: Doug Leavitt
A construction cost breakdown is really the first step in building. Other than obtaining a construction and Mortgage loan and satisfying those requirements, the construction cost breakdown sets forth the building Process. You’ve selected your lot and your building plan, now how much is this building venture going to cost? To take that question further: how much will your building costs be and how to arrive at those costs? It’s no easy task or “walk in the park”. You’ll find a BUNDLE of New construction contracts, forms and agreements, I call the “Builder Pack” at http://newconstructioncontracts.com There will be a lot of research, bidding, time, stress and effort! However there are a number of things to minimize each of these task which is noted in the breakdown. For one thing, where do you find a detailed comprehensive list of what to bid, what to ask each contractor? What is a decent price to pay for their particular task ? How are they paid? Where to get the funds to pay? What forms do you need to request those funds? SET of blue prints? What’s included in a set of blueprints, how do you know when to schedule each contractor, the materials for building, what materials are being included in the house, how to bid the line items that you don’t know what the price will be until you get to that time when you need to schedule deliveries?
I have spent 27 years in the Home building industry. First I worked for a local high volume builder in sales and then as a sales manager. But when I really started looking closely and learning the building schedule then got involved in the bidding process and dealing with contractors, I started seeing the enormous profits in one build job. I Literally dropped my jaw to see the bottom line. All of those 00000′s behind the numbers was staggering. I started paying more attention to that side of the building process , the actual building process vs- the sales side of the Building Industry. I began to see where things could get out of control very easy and very fast. That’s when I began to gather information, forms, Developing our own contracts, installing the organizing factors into place. I developed software, custom tailored forms, schedules,checklists, spreadsheets, description of materials and everything else to minimize mistakes, which completely organizes a home building company. The builder was literally building from the seat of his pants. He was loosing control when we began to sell more and more, growing into several subdivisions, hiring more contractors and sales people, and in a very short period of time. We had to act & get ORGANIZED FAST! So, we were able to grow, profit, and stay focused because of the organization of back office, forms, contracts,scheduling, etc.
After several years of making the builder tons of money, even when interest rates skyrocketed to over 21% with, I believe, around 16% as the national average, I ventured out on my own and started my own building company. For years I did it all, sales, bidding, contracting, scheduling, payroll and so on, but I couldn’t do what I did without all of the organized builder forms that I developed, checklists, information sheets on vendors / suppliers, and the subcontractors, lists and checklist, AND PROFITS were due to the success in adopting and developing these organizational tools.
This construction cost breakdown was developed in chronological order. You could literally build a house step by step using this checklist. I have included tips and tricks and money saving advice in this checklist. I have also shown how to arrive at those building cost and where and how to get the information. It will not only save tons of cash but also help organize your effort.
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Here is a 2009 NHBA Breakdown for National averages. from their website.