The process of taking a design concept and transforming it into a full-blown custom home is anything but easy. Abstract ideas from the client are materialized into a tangible — not to mention beautiful — structure. As a home buyer, building your custom house should be enjoyable and nearly stress-free. And it will be, as long as you’re dealing with an honest and ethical builder that has your best interests in mind.
There are many intricacies involved in building a home, but today we’re going to focus on one of the most important: the builder-client relationship. This is one of the defining factors in the construction process. To a great extent, this relationship will determine how well your home turns out.
Negotiation. It’s a common practice for many businesses. You’ve probably been through the process before, when purchasing a car from an auto dealership. Or maybe you’ve negotiated with an employer during a career transition. Regardless, there’s a reason why these specific situations involve negotiation. Think about it: They involve financial transactions (or rewards) with a significant amount of “wiggle room.”
When you see a car at a dealership with an MSRP of $30,000, you know that has almost nothing to do with the real cost of manufacturing. On top of that, you know the dealership is going to tack on some additional fees. By the time you are done, the price of the car has risen by a few thousand–if you’re lucky. Let’s face it: If you don’t fight back, dealerships will try to squeeze every last penny from you. That’s why negotiation makes sense when purchasing a car. But when it comes to a more specialized service like custom home building, for example, everything changes.
The pricing strategy for custom homes is NOTHING like that of a simple commodity. For that exact reason, adding negotiation to the custom home building process is a big mistake (for everyone involved).
- A successful construction process requires two parties that respect each other and are 100% forthright.
- The pricing for a custom home is entirely based, in our case, on choices made by the client.
- Negotiation only serves to divide the interests of the builder and client.
If you’re dealing with a true professional, negotiation will have absolutely no influence on the construction process. Further, it won’t even be an available option… because it will only cultivate problems and distrust between the client and builder. Remember, the client and home builder are on the same team. They have the exact same goal: an amazing home that meets the desires of the client.
The Best Of Both Worlds
Here at Cornerstone, to ensure the best possible client-builder relationship: we don’t negotiate. For all intents and purposes, negotiation is a dishonest (and poor) business strategy. It forces one side to win… and the other to lose, depending on the result. Do you really want to second-guess every piece of advice given by your builder? Because that is exactly what will happen if negotiation occurs: it will be in the financial interest of either party to deceive and manipulate the other.
Furthermore, we do this for a living. We fight tooth and nail to ensure the best possible price for our clients. In fact, by eliminating negotiation from our process, we are able to make cost-efficiency a top priority.
Here’s how it works: We calculate our overall costs by looking at the bids we receive from suppliers and sub-contractors.
Of course, there is a set margin of profit built into the final price, to allow us to keep designing and creating great homes year after year. But be sure to notice the difference between this pricing approach and one that involves negotiation. This way, we have absolutely no incentive to get “funny” with the price estimate.
We aren’t worrying about how much the price will be affected by negotiation, and we have no reason to provide the minimal amount of service or specifications to reduce costs (and increase our bottom line). On top of that, we have no incentive to spring surprises (like bait-and-switch tactics ) on clients during the construction process.
Doesn’t this seem like a superior pricing strategy? The way we see it, this is the best of both worlds. You get the absolute best advice and service from your builder… and your goals are aligned with no opportunity for mistrust. There’s a certain peace of mind that comes from knowing your custom home builder has your best interests in mind.
The Successful Client-Builder Relationship
So how do you guarantee a successful client-builder relationship? For the most part, you just need to give your full effort and attention to the process. If there’s something you are confused, concerned, or unsure about… tell your builder. It’s their job to ensure clear communication, and to make sure you are fully-informed every step of the way.
On top of that, make sure you understand that the builder is on your team. There’s no reason to waste energy, effort, and time on problems that could be avoided with clear communication and mutual trust. You just learned one of the biggest examples of a preventable problem that falls into this category: negotiation. When it comes to price, know that you are in control. Your choices during the design process are the sole decider of the price. For this reason, make sure you articulate any and all of your ideas during the initial design stages… when you have the luxury of time to play around with different options (and prices).
Remember: Your builder wants to deliver a stunning custom home, to make you happy, and to meet all of your desires. As long as you’re open, honest, and forward with your thoughts, you have nothing to worry about. That alone will help you take a great stride towards guaranteeing a positive outcome for your new custom home.
Interested? Contact us through our website or give us a call today to set up an appointment.