Statistics show that real estate is the single most expensive purchase consumers will make in their lifetime. For those who are looking to build new, staying within budget is paramount.  While meeting a budget is important, building a home with materials that will protect this investment should be as well.

Having several home builders in the same area gives consumers the ability to find out from several professionals, in the industry, exactly how much it will cost to turn plans from paper into a reality. Submitting the same plans to more than one builder is commonly referred to in the building industry as “ competitive bidding.”

While competitive bidding allows for the exploration of builder options and costs associated with building new, a “low sticker price” often out-shadows the project as a whole, especially regarding the quality of materials and services used to attain an overall low cost. In order to make a budget, many builders will use lower quality materials, which may save money at the outset of a project, but can lead to future damage causing repair and replacement costs that would have otherwise been prevented.

Here are our top three areas that builders tend to skimp out on.

1. Windows

Drafts from windows are something most people would expect from older homes, but cutting costs by opting for inexpensive windows can leave new homes susceptible to the same fate.

By including the lowest quality window in an estimate, builders cut $5,000-$10,000 upfront. To most, this sounds like a significant amount of money that would be better used in other parts of a new home; however, windows are an integral part of a home. While a quality window may cost a bit more initially, the long term benefits far outweigh the future costs of settling for “builder grade” windows that fit the budget. Here’s why.

The most predominantly known grades of windows are: vinyl, vinyl clad and aluminum clad.

Vinyl windows, sometimes referred to as “builder grade,” are the most inexpensive and commonly used window in the residential market.  This attractive price lends to their popularity, but don’t let the appeal of the low price point distract you from the downside of investing in an all-vinyl window.

While vinyl windows do not need to be painted or stained, are budget friendly and are seemingly maintenance free, an all-vinyl window will expand in hot temperatures and contract in the cold, creating air gaps between the window panes leading to drafts through out the home. So, while all-vinyl windows save money up front, the costs to heat and cool the home are escalated on a continual basis.

Vinyl and aluminum clad windows, while a much more efficient option, do come with a higher price tag.  What sets clad windows apart from their all-vinyl counterpart is that they consist of wood-framed windows cased on the exterior in either a vinyl or aluminum overlay.  This option gives a secure structure for the window, with limited expansion and contraction, and an added benefit of the clad protecting the wood from being permeating by the elements.

Aluminum cladding tends to be slightly higher in price than the vinyl-clad alternative, but the overall benefits of opting for a clad window now, far outweigh the costs later.

2. Heating Systems

Another area often overlooked is a home’s heating system. While a traditional HVAC system will save money upfront, the long-term savings that geothermal systems create make them far more advantageous in the long run.

According to the U.S. Department of Energy, “even though the installation price of a geothermal system can be several times that of an air-source system of the same heating and cooling capacity, the additional costs are returned to you in energy savings in 5 to 10 years.”

Unlike traditional heating systems that use the outside air to heat or cool your home, geothermal systems use the earth’s natural temperature of 55 degrees Fahrenheit to aid in the heating and cooling of a home. For example, during the winter months, to keep a home’s internal temperature at 70 degrees, it takes far less energy to heat water already tempered at 55 degrees than to heat water resting at 20 degrees like in a traditional HVAC unit. This same concept holds true during the summer months as well.

How do geothermal heat pumps harness the natural temperature of the earth? Geothermal systems consist of pipes underground in  “closed-loop” and “open-loop” systems. Choosing the right system depends on the climate, soil conditions and available land at the site. Watch the video below by the U.S. Department of Energy to find out more about how geothermal heat pumps heat and cool buildings.

By using heat that already exists in the earth, geothermal pumps are a clean, reliable and renewable source of energy. They are also quieter, need less maintenance and last longer than air-source heat pumps.

In addition to geothermal systems, high-efficiency HVAC units will help cut costs on high energy prices in the future. High-end units use the latest green technology in new construction and solar panel energy. Read more about high-efficiency HVAC units here.

3. Allowance-Based Items

Allowance-based items, while offering a quick solution to making a budget, often times end up being under priced, leaving significant costs in overages after the contract has been signed with the builder. Typical allowance-based items include, but not limited to: plumbing fixtures, lighting fixtures, cabinets and countertops, flooring and appliances.

Builders who offer a lower estimate may be budgeting less spending money for those allowance items that really make a house a home. What is included for an allowance versus what final selections cost ultimately can end up being significant amounts of money not factored into a budget. Spending money not allocated appropriately can add A LOT to your bottom line.

Choosing a builder who budgets mid-range quality items into allowance items is a good way to ensure that the client derived selections won’t break the bank. The benefit to a mid-range material allowance is that it not only ensures that quality materials are being used, but it allows clients to upgrade to items of choice without incurring inflated overage costs for menial variations in selections.

Reviewing allowance-based items and comparing what each builder includes in their package will ultimately help avoid unanticipated costs otherwise not factored in.

Err on the side of caution when entering into the process of competitive bidding. If it seems too good to be true, ask questions! Asking questions and familiarizing with each builder’s project specifications is paramount in staying involved in what materials and services will be utilized during the construction process.

Exploration at the inception of a project is far less expensive than accepting a low estimate at face value and the cost of the aftermath caused by builder shortcuts.

Looking for more useful tips and helpful information on selecting your builder?  Visit us at TurnberryCustomHomes.com and check out our FAQs.

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