Home Builders – Different Business Models

Sequim Home BuildersWhen you select a Sequim builder (or Port Angeles builder) for your new home or your custom home, one of the decisions you will make is what kind of builder you want to work with.   By that I mean, what business model approach do you prefer?

For simplicity, I will divide home builders into two main categories:

1.   The Full Service Home Builder.   This is a custom home builders with a business model that includes a comprehensive building approach, meaning that they do everything necessary to build your home on your lot.   Most people would expect this, but let’s explore this a little further.   A comprehensive approach includes developing the site plan, doing the excavation for the house, the sewer or septic system and the driveway, bringing in the power across the lot to the house, building decks or other connected construction, painting the inside of the house, and so on.   This business model is the traditional model that most people expect.

The Full Service Home Builder will quote prices that includes the entire home construction package, and in the Sequim and Port Angeles areas that will typically range from $95 to $150 per square foot, depending upon your material and options.   A custom home with a number of expensive upgrades or extras can easily be much more.   Having talked with many reputable builders in the area for many years, I can tell you that these numbers are realistic.   Be on your guard if someone tries to sell you a bill of goods at some massive discount while claiming to be a full service builder.

2.   The Discount Home Builder.   Many people today are looking for the deep discounts when they hire a builder.   A discount home builder, although they would not necessarily call themselves discount builders, are not comprehensive builders.   They typically have a small number of home designs that they build over and over again, and they do not include the full range of services and construction mentioned above.   The home builder may have to a lot of the work themselves, or have unfinished rooms, or unfinished decks, and so on.   The home builder may also have to be their own project manager, responsible for overseeing construction, the coordination of subcontractors and supplies, and the application for permits, etc.   There’s nothing wrong with this business model, provided you understand what you are getting when you sign the contract.   Many home builders are either not capable or not willing to do all of this.

Full disclosure is critical with the disount builder, because you have to add the cost of what they are not going to do for you at the contract price to arrive at your true total cost per square foot.   An advertisement at $38 per square foot is fine, but by the time you do all the other improvements required to get a permit to live in your home, how much is the true cost per square foot?   Will it be $75 or $95 or $135?

You need to be able to intelligently figure this out if you are trying to decide which kind of business model to go with.   In other words, compare apples with apples when you are using cost per square foot to decide which builder to choose.

For a good comparison of a builder in each of these categories, see:

Anderson Homes, LLC
HiLine Homes

I would recommend that if you are still undecided or need more information to make a fully informed decision, discuss your specific plans with each builder in person, ask about their spec sheet and what they include and don’t include in their contract price.   You should take this approach anyway.   Neither   business model is right or wrong, but only one of these business models is ideally suited for you and for your house plan.

One Response to “ Home Builders – Different Business Models ”

  1. As owner of True Built Home there are several other things folks should consider about the discount builder. Some as mentioned have figured out how to build homes with minimal requirements and in some cases inferior finish products. Although the home will have been site build it may not meet you living needs once in the home. Many are shocked to see after the home is done that cabinets in masters and main baths are only 30” instead of 36” which is common for most of us builders. As a discount builder myself, I have always promoted knowledge and information for those who’d prefer to go this route.
    About True Built Home, Inc
    Over three years in the making
    Nearly 3000 house in 3D renderings
    State of the art website-create your own estimate
    More content than other “on your lot” builders
    The most homes in the 2000 sq. ft range
    True 8 foot ceilings
    Milgard windows
    OC roofing
    BMC West lumber packages
    Birch cabinets
    Moen faucets
    Kohler inserts

    If you’d like to learn more, feel free to contact me at
    lewis@truebuilthome.com or go to our site at http://www.truebuilthome.com

    Thanks,

Leave a Reply

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