Interestingly, many of those folks in the planning phase are deliberately taking their time.  Some are waiting for the  real estate market to get better, so that their appraisals will be stronger.  Some are waiting for better economic news so they’ll have more confidence about their jobs or the economy. 

Its a funny and interesting gamble.  At the macro level, housing starts are beginning to jump.  Up 17.2 percent in May.  Of course, that means lumber soon will follow, as well as other commodity based materials.  OSB and 2 by 4s are  climbing already.  

For those who were waiting for the “best time” to build, the window of opportunity may have already passed.   The very best pricing on lumber, labor, concrete, steel, and construction money, may have occurred in late April or early May. 

That’s not to say that there arent still some very good deals out there.  And, there will be some very good deals for many months to come.   But I can say with certainty that new construction will be more expensive in six months than it is right now.

The best advice at the moment is probably -  get your planning done fast.  Get everything ready to go to the bank, to the lumber yard, to the city or county for permit, to the tradespeople for bidding, and be on your toes.   Being ready in times like these can mean a difference of thousands of dollars. 

We can see it coming – its a recovery  headed our way.

There are also some services around, most of them web based, hands-off type organizations, that claim to have screened contractors and chosen just the good ones to be part of their list.   These are also “pay-to-play” systems.

Somehow, it just does not seem right to pay for a good recommendation. 

We decided when we started HomeWrights that the sub-contractors and suppliers that we recommend would never have to pay us for our referral.  That way, we’re beholdin’ to no one.   It’s easier to be honest that way.   

When we put our endorsement on a sub contractor or supplier, its because we firmly beleive that he or she will do the best job possible for our client.   We refer them because we’ve come to respect who they are, and the work they do. 

We emphasize to them that all they owe us is a good job for our client at a fair price.  It just works better that way.

It’s nice to be right, even if it does take a long time to prove it. 

Here’s a link to a recent MSNBC interveiw with Barbara Corcoran, a real estate expert and contributor to the Today Show.  Barbara and I are reading from the same playbook.  I think she’s a genius!!!

http://today.msnbc.msn.com/id/26184891/vp/30825142#30825142

Take a look and enjoy.  We’re number 1!

Home owners run the project, we’re there to back them up, with state of the art systems and support, excellent administrative tools, great technical expertise, and superb sub contractors and suppliers.  It truly is a parntership. 

The description is not 100 percent accurate though, because we do so much more.  Coach, advise, council, evaluate, coax, cajole, and occaisionally – push, pull or drag. 

A couple of competitors have popped up in the last few years.  Their service is similar.  Lets face it, there are only so many ways to build a home, and only so many ways to coach folks along. 

We’ve watched these competitors, and listened, and when appropriate, snooped just a little. 

Oddly – when we call ourselves “building partners” they call themselves building partners.  When we call ourselves “coaches” they call themselves coaches.  You get the idea. 

I guess imitation is the most sincere form of flattery.  Thanks.

Our building model is different in that we prefer to see our clients put their money where it really produces the best product, namely: the minds and hearts of the people whose hands are putting together the parts.   This is not to say that quality parts are not important, we simply mean to elevate the importance of the workmanship. 

Since our clients manage their own construction projects, there’s never a doubt about the hearts and minds of the people in charge.  Owner Builders are always 100 percent committed.   Their hearts and minds are always there. 

If you compare two custom homes, both built with the same parts, but one built by committed craftsmen who have a true working relationship with the home owner, and one built by workers who are putting together the parts for a faceless future inhabitant (and a payday on Friday), your intuition should tell you which home will be better built. 

The point is; it will always be very easy to find someone who’ll do a job real cheap, and its tempting to try to negotiate  the “fluff” out of the higher bids.  The trick is to find the balance…and to truly know the point at which the heart and mind have left the job, and all you’re paying for is parts and hands. 

Really…is there any doubt about which house you’d rather live in?

This knowledgeable couple just finished building a custom home in Denver’s Highland neighborhood.  When they drew the plans four years ago, they talked to us about being their “coach” but at the time they just figured it would be more fun to work on it alone.   Besides, they both had lots of contacts in the industry. 

At the show, he said with a big grin that he wished he would have used our service.  He said “I could have saved myself about $70,000 if I would have used HomeWrights.  I now know I could have done it with your help.”

It turns out he ended up with a less-than-scrupulous general contractor.  After quarreling with the GC for months, over numerous issues and mistakes, he fired him.  He spent the next several months correcting mistakes that the contractor had made – at his own expense of course. 

Rafael’s “bottom line” was this.  HomeWrights experience and connections could have saved him the trouble of mistakes, bad bids, bad  or inexperienced subs, poorly written contracts, and (even though he is an architect) errors on house plans. 

We reviewed a house plan last week for a family that had plans drawn by an inexperienced draftsman.  The draftsman told them that the house could be built for about $100 per square foot.  Based on the draftsman’s input, they had the plans drawn up for a 14,000 square foot home.  They also spent the money on engineering, a well permit, a septic design, and the building permits.  They’ve invested over $40,000 already. 

The house had over 40,000 pounds of steel in the engineering.  Right now, with steel at about 80 cents per pound, its easy to see how the materials alone for such a home will easily exceed $100 per foot.  Appliances on a home like this will cost nearly $35,000. 

It broke my heart and theirs to look at the realistic budget that I prepared for them.  They’re undaunted, but they have decided to put the project on hold for a while.   I’ve suggested to them that they contact the county immediately to see what can be done about the permit fees.  They may get an extension.  It would be a shame to lose the money already spent on permits. 

The point of these two stories is simple – a good builder saves you money long before you put  a shovel in the ground, and for that matter, long before the plans are complete.  There is no substitute for experience.  An experienced builder can look at plans, look at concept drawings, look at a job site, or look at your list of chosen finishes, and tell you up front where you have opportunities for savings, or where you will experience extraordinary costs. 

The rascals in our industry have made it difficult for the good guys.  People are reluctant to committ to hiring a builder until they are sure they will receive value for their commitment, and in some cases, reluctant to committ unitl AFTER they’ve already recieved the benefit of the builder’s work. 

So…check references.  Interview carefully.  Do your homework, and ask good questions.  Check your builder thoroughly, but…make a commitment EARLY.  The savings will start immediately. 

Wow…long sermon huh???

That’s a pile the same size as about 500 refrigerators, or about the same size as 1440 television sets (not the flat screen type), or about the same size as 22,000 toasters.  Its a bunch of dirt.

A tandem dump truck (thats one of the “small” dump trucks with two back axles) holds maybe 9 yards.   That works out to 91 dump truck loads. 

Its a LOT of dirt. 

Beleive it or not, getting rid of dirt is a problem.  Especially now, when construction is slow, there’s no place to dump it.  With urban infill construction, you have to haul most of it away in order to make room for the foundation workers.  When the foundation is done, you have to haul some of it back to fill in around the foundation. 

Dirt out.   Dirt in.   It seems silly.  But its the only method we’ve got right at the moment. 

The problem is – it costs money to move it around.  Its one of the larger and more unpleasant surprises we encounter when we build here in town.  Getting rid of the dirt, and then getting it back. 

So, who came up with the expression Dirt Cheap?    No such thing.

The  article quotes  a report by a group called PMI, a Mortgage Insurer, and states that “Home prices in the Denver – Aurora metropolitan area have a less than 1 percent chance of declining in value during the next two years. ”

It goes on to say that Denver is considered by Mortgage Insurers and Hedge Fund managers as a LOW RISK area for real estate. 

In my book, 99 percent is pretty good.  We’re in a great market, at a great time to build.

We often talk about the importance of working with local lenders for construction loans because of their strong knowledge of the market and their committment to the local communities.  Debbie’s bank is one of the great local banks that fit this description.

Debbie made it clear to us, as she has many times before, that her bank is eager to lend to well qualified investors for residential projects.  She’s frustrated, as are many local lenders, that the message simply isnt getting out there about available money.  

We know that lots of folks are putting projects on hold right now because they beleive that they cant get a loan.  The media has everyone scared of their shadow right now. 

Debbie’s contention is that the only thing thats “frozen” right now is the soil.  Certainly, not the credit market. 

We agree!

That’s not to say you shouldn’t ask.  You should.  But you should do your homework to make sure you’re comparing apples to apples.    Most good builders can quote a range, and they can pretty fully describe what you get at the top, and the bottom of that range. 

Beware the builder who quotes a square foot price for YOUR home, without seeing the plans, and without getting to know you, your tastes, and your wants and needs. 

Its like comparing a 220 horspower Hyundai to a 220 horsepower Mercedes Benz.   Both cars have the same measurable power, and probably they have comparable “zip”.  But, they’re not the same car.    One might deliver the 220 horsepower at $100 per horse.  The other might cost twice that. 

A fair comparison of cost per square foot can only be made with a great deal of scrutiny.  Questions to ask include;

• Are architecture, permits, fees, utilities, landscaping, sidewalks, and fences included?
• What type of finishes are included?
• Are there costs for changes, or change orders?
• What are the specifications of the building materials, trusses, and other structural items?

For production homes, or pre-built homes, the cost per square foot number makes a bit more sense.  The variables are easier to identify and the evidence is right in front of you.  A certain feature is there, or its not there. 

However, before the home is built, take the time to know what a quote includes.  What sounds like a great deal can turn pretty bad in a heartbeat if a $15,000 item is “extra”.