ᐅ House Prices – Significant Variations Among Home Builders
Created on: 18 Jan 2018 22:46
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Stagenberger
I have received four different offers from local building contractors. The planning basis is the same: a rough plan for a Tuscan-style house with 108m2 (1,163 sq ft) of floor space, including a basement and a heat pump. The floor plan is from provider 2. All four know my budget is limited and were asked to offer the lowest possible price.
Provider 1: 265,000 + additional construction costs
When asked about the price: "We are usually the cheapest."
When asked about potential savings: "There isn’t much room left, maybe a smaller house, but then it gets tight."
In business for: 5 years
Provider 2: 280,000 + additional construction costs
When asked about the price: "As long as you don’t want any changes, we can use our standard plan; every change costs extra."
When asked about potential savings: "That all comes at the expense of quality."
In business for: 15 years
Provider 3: 310,000 + additional construction costs
When asked about the price: "It doesn’t get much cheaper if you want quality."
When asked about potential savings: "We can make the house smaller for you, but not by much."
In business for: 15 years
Provider 4: 320,000 + additional construction costs
When asked about the price: "If you don’t want or can’t pay the price, there’s always someone else; quality comes at a price, and anyone offering it cheaper either doesn’t have the quality or is hiding something."
When asked about potential savings (grudging look): "I haven’t calculated that yet."
In business for: 40 years
I have received an offer and a detailed description of the construction services from each provider. I have three theories as to why the prices differ:
a) Established companies with a good reputation can charge more; therefore, providers 1 and 2 are cheaper.
b) Providers 3 and 4 don’t see much profit in my project and are not very motivated.
c) Providers 1 and 2 have made their offers more attractive in order to win the contract.
I will now have the documents reviewed by an architect and a gentleman from a nonprofit foundation in the field of home building.
What do you think?
Provider 1: 265,000 + additional construction costs
When asked about the price: "We are usually the cheapest."
When asked about potential savings: "There isn’t much room left, maybe a smaller house, but then it gets tight."
In business for: 5 years
Provider 2: 280,000 + additional construction costs
When asked about the price: "As long as you don’t want any changes, we can use our standard plan; every change costs extra."
When asked about potential savings: "That all comes at the expense of quality."
In business for: 15 years
Provider 3: 310,000 + additional construction costs
When asked about the price: "It doesn’t get much cheaper if you want quality."
When asked about potential savings: "We can make the house smaller for you, but not by much."
In business for: 15 years
Provider 4: 320,000 + additional construction costs
When asked about the price: "If you don’t want or can’t pay the price, there’s always someone else; quality comes at a price, and anyone offering it cheaper either doesn’t have the quality or is hiding something."
When asked about potential savings (grudging look): "I haven’t calculated that yet."
In business for: 40 years
I have received an offer and a detailed description of the construction services from each provider. I have three theories as to why the prices differ:
a) Established companies with a good reputation can charge more; therefore, providers 1 and 2 are cheaper.
b) Providers 3 and 4 don’t see much profit in my project and are not very motivated.
c) Providers 1 and 2 have made their offers more attractive in order to win the contract.
I will now have the documents reviewed by an architect and a gentleman from a nonprofit foundation in the field of home building.
What do you think?
We found differences of around €40,000 (approximately $44,000) between quotes that had almost the same scope of work. When we asked the more expensive builder what was different in their offer (we wanted to give them a chance), their response was just complaints about the “Poland crew” of the cheaper provider, and that the roof gable wasn’t properly framed.
Well, the "Poland crew" did an excellent job building up the walls for us. They worked very professionally and neatly, and the roof gable withstood Fredericke perfectly.
We also asked the cheaper builder why their price was lower: they are significantly larger and can negotiate better deals through bulk purchasing. Additionally, it seems that they have strong influence over the subcontractors due to their market power (this is our assumption).
Well, the "Poland crew" did an excellent job building up the walls for us. They worked very professionally and neatly, and the roof gable withstood Fredericke perfectly.
We also asked the cheaper builder why their price was lower: they are significantly larger and can negotiate better deals through bulk purchasing. Additionally, it seems that they have strong influence over the subcontractors due to their market power (this is our assumption).
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Baumfachmann19 Jan 2018 17:31The crazy price increases have been happening for over 30 years. I have built my third house and each time I requested 8-10 quotes. As an expert, I have found that quality rarely correlates with price. There are staircases from Poland that are true craftsmanship masterpieces, or tile installers from Ukraine from whom others could learn a lot.
It is worth comparing offers. I paid €258,000 for a 176m² (1,895 sq ft) turnkey house with high-end finishes.
The scope of work should, of course, be carefully reviewed, and verbal promises should not be trusted.
As Nordlys says, talking to people who have already built with the companies is definitely advisable.
It is worth comparing offers. I paid €258,000 for a 176m² (1,895 sq ft) turnkey house with high-end finishes.
The scope of work should, of course, be carefully reviewed, and verbal promises should not be trusted.
As Nordlys says, talking to people who have already built with the companies is definitely advisable.
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Stagenberger19 Jan 2018 22:15Provider 2 and 3 are known within our circle of friends and are apparently doing good work. Provider 2 is considered expensive. Either Provider 3 has increased their prices, or Provider 2 includes many additional items that are not listed in the scope of work description.