Build Your Own House PDF

The Owner-Builder Book:
How You Can Save More Than $100,000 in the Construction of Your Custom Home
Fourth Edition
Copyright © 2007 The Consensus Group, Inc.
Printed and bound in the U.S.A. All rights reserved. No patent liability is assumed with respect to the
information contained herein. Although every precaution has been taken in preparation of this book, the
publishers and authors assume no responsibility for errors or omissions. Neither is any liability assumed
for damages resulting from the use of the information contained herein. For information address The
Consensus Group, 3776 North 300 West, Provo, UT 84604-4907
This book is distributed to the book trade through Ingram, Baker & Taylor, and Partners Publishers
Group.
ISBN: 978-1-932272-04-8
UPC: 6-96326-27204-9
Library of Congress Control Number: 2006910317
Fourth Edition 10 9 8 7 6 5 4 3 2 1
The Consensus Group, Inc.
Toll Free: 1.888.333.2845

OwnerBuilderBook.com
Reader Comments •
Reader Comments
“I took your book out of the library because my friend said it was a good one. Before I finished reading it,
I had found the confidence to go out and build. We read the Special Reports to each other on the way back
from Montana. We read all the ones that go to the budget and we broke it down to our parts where each of
us get bids.”
Melanie & Jeremy T. Riverton, UT
“I read it, my husband is in the process, and we are sold on the idea. My husband was up til 3:30 this morn-
ing reading this, it was so enthralling to him. He says it is very helpful and he is looking forward to using
the software templates. I enjoyed the website, especially the moms that are on there.”
Lyn & Phil S. Kansas City, MO
“I was in the library yesterday and found your book. What a godsend!! I have been reading it and decided to
check out the website. We have already been doing a lot of what is recommended by the book; getting esti-
mates on jobs, pricing materials, calling banks, etc. I have found two banks willing to loan us the money
with us being our own G.C. I know I am rambling on, which is out of character for me! I guess my reasons
for writing are to ask if there is any advice you can give to me and to just thank you for the book. It has
encouraged me that Jim and I CAN do this ourselves and have a nice home without an enormous debt.”
Jodenia & Jim M. Blacksburg, SC
“I liked it. I like the fact that it’s very easy to read. I like the way it’s laid out.”
Mike W. Molalla, OR
“It makes sense that you make your money in planning.”

Kevin T. Lawton, OK
“You’ve got some good stuff in here. The savings emphasis and the encouragement helped me. It agrees
with the things my buddies in contracting tell me. It breaks it all down so you can understand it.”
Eric R. DeSoto, TX
“I’m so glad to find your book. I feel like we can get started now. I felt so alone, but now all of a sudden after
reading your book, I see that it’s not just me.”
Judy & Chris P. Bothell, WA
“I enjoyed reading the book. We gathered about thirty different books, and yours had things like Realtor®
input that no one else had. Many lists of things that we liked.”
Tom W. Logan, UT
“I’ve been enjoying your book. I’ve done some projects as a project manager. That’s my forte, so house
building seemed like a natural. I had a contractor last time, and that convinced me never to do that again.
Everything you say in your book is true.”
Suanne D. Rio Rancho, NM
“I bought your book, The Owner-Builder Book, and found your personal signature in it, we think it is cool.
I am now halfway thru book and really like how you organize the contents. I was going to plan to owner-
The Owner-Builder Book

ii • Reader Comments
build my house in only one month but after reading your book, I extended it to one year. So I am going to
continue renting the house we live in now and plan aheaaaaad.”
Eric Emmons (via email)
“It’s a good book. I’m in construction, and I’ve been reading books on this for 20 years and I really enjoyed
it. It was more practical, and the numbers seemed more real than other books I’ve read over the years. I see
50% and 60% off all the time, not just 10%. Subs will charge what they can get away with. The best part
was how you talked about the planning. For me, planning is about 90% of it. It all should be done in your
mind first.”
Jim & Mary F. Northboro, MA
“I thought it was very great. We are doing a major remodeling, start to finish, and it’s very helpful, very
good info and things you learn. The numbers that hit you when you get your plans are so high, you know
you have to be able to do it cheaper than that. You need to hear it over and over. Very, very good book. I was
shopping around. This is very easy to follow. Easy to read and highlight. It had everything in it. Like one
stop shopping. Eye-opening, but very good. We’ve been doing a lot of shopping around.”
Bonny P. Andover, NJ
“We’ve owner-built once before 24 years ago without any kind of help like this. We didn’t do any of the
trades. We just cleaned up and bought everything. This time we’ll downsize. We have wonderful plans, and
wonderful people because we’ve been here in this small town for a lot of years. I wish I’d had some literature
like this the first time I did it. I just knew that I could shop better than a contractor could. We saved a lot
of money the first time, and we’ll do a lot better this time.”
Gene P. High Springs, FL
“I read your book in two days! I really appreciated it. I’m looking forward to downloading software from
your website.”
Gina L. Fountain Inn, SC
“I was very inspired by your book. We’re getting ready to build a house. It’s going to be fun.”
John O. San Rafael, CA
“I build apartments by trade, I’ve built about 10,000 units. I stumbled onto your book a couple of weeks
ago, and I think it’s the finest publication I’ve ever read on the subject.”
Chris V. Federal Way, WA
“My husband and I are getting ready to build a home in town and we are so much more excited about what
we can accomplish because of what we have read in your book. Thanks so much for the information and
tips and encouragement. We are picking up our final design plans tomorrow to submit to the city and then
the real fun begins.”
Shawn & Amy H. Provo, UT
“Don’t change a thing. It’s easy reading. That’s a big plus. I’ve used this as a Bible, throughout the whole
project. It’s hard to put down.”
John J. Higganum, CT
“It was very refreshing to see the comments you make about referrals and subcontractor certification and
the other games that go on in our industry.”
Mike M. Bonham, TX

Reader Comments • iii
“It’s a good book. I write in it and fold the pages. I like the letter to the reader that says you can do it. I’ve
got my wife thinking we can do this. My friend is having a contractor build his house, and he says ‘I think
I can do it. All you have to worry about is having the subs show up.’ And you cover that in chapter 13.”
Greg T. Harrison, OH
“I started by reading The Complete Guide to Contracting Your Home which was full of valuable information.
Then I got your book and liked it even better. Your book covers a different side of owner-building. What a
perfect complement the two books are!”
John & Pat W. Crystal Lake, IL
“I just finished building my wife and I a house. Where I ran into problems was in the planning stage. When
you say go, you are running down a hill that’s too steep, and you keep up or fall. I was thinking of going
to a psychiatrist because this first project caused such emotional stress, but bought your book instead and
now I know that I have control of those factors, not the construction workers.”
Tom M. New York, NY
“Very interesting. It’s a good read that at the very least will prevent you from getting ripped off. One of the
most fascinating books I’ve ever read.”
Ivey S. New Strawn, KS
“I love your book. It’s great. We were trying to decide whether to act as general contractor. After reading
the book we got so excited about it we are doing it now.”
Becky & Steve G. Waterloo, IA
“Been in the Corps of Engineers, and have extensive homebuilding experience. I’ve looked at a lot of books,
and yours was by far the most comprehensive, especially in getting your construction loan. There’s a lot of
owner-building here. If you want a decent house, you have to do it.”
Clinton B. Anchorage, AK
“The book is simply great. My wife and I are in the planning stages of building our own straw bale house in
Tucson. I especially liked the concept in your book that a dollar saved is equivalent to 10 dollars in wages
that does not need to be earned (or at the very least not spent needlessly). This is why I’m interested in the
budget templates. Your ideas are very similar to the thinking in the book Your Money or Your Life. Follow-
ing the basic principles in that book have culminated in being able to do what’s in yours.”
Robert G. Tucson, AZ
“I was telling a friend of mine, my lender, that this book was probably the best investment I’ve made in the
last twelve months. You emphasized many things the average person doesn’t think about. I can save a lot of
money with this book, there is no doubt in my mind.”
Julio L. Austin, TX
“I’m a management consultant, have done a 6,000 square foot house, a 5,000 s.f. house, and now a 4,000 s.f.
and concur with all that you said in the book. Obviously you had to be a good management consultant to
create the level of detail that’s in the book. I owned the book for six months, and finally took it on vacation
where I read it. I want to commend you. It’s written very well, and very very practical.”
Jim V. Reno, NV

iv • Reader Comments
“I do property management, and I know that preparation is everything.”

Rob B. Mesquite, TX
“We really enjoyed your book. We noticed that it was the only one in the group that acknowledged and
referenced the other books on the subject. It’s nice to know that when you wrote the book you had already
assimilated everyone else’s philosophies. And you’re the only one with internet support where you can
share ideas with others.”
Steve & Kathryn H. Spanish Fork, UT
“It’s a great book. I finished it in three days, I was so engrossed. It was extremely good.”
Emmanuel G. Oak Brook, IL
“Your book was the most interesting in the bookstore. There was nothing in any other book that was so
practical.”
Chris F. Plainfield, VT
“My friend had your book checked out of the library so much that the librarian bought him his own
copy.”
Dale B. Tucson, AZ
“I enjoyed your first edition very much. I was very glad to find this third edition at the bookstore. Because
I remodel houses, I watch for all the books on this subject. I’ve probably read them all. There are so few
books out there that you can use. The majority of the construction books are just written to sell. Yours is
written to inform. Some of the books I just get maybe a paragraph out of that’s new. Yours I can use.”
Cliff S. York, SC
“We are working on a huge apartment project, and this is coming in really handy. The book gave us the
inspiration to get started in the first place.”
Edmund & Emily M. Coppers Cove, TX
“This book fell into my hands last year. It was like an answer to prayer. I just devoured the book immedi-
ately. I have 20-30 sticky tabs sticking out of it all over.”
Dorethy H. Topeka, KS
“Excellent book. A lot of useful information a lot of people don’t have. Very informative. As a contractor, I
sat down with the book. At first I was wanting to toss it out the window. Either this guy is clueless, or he’s
been there before. I finally realized that the realities of running your own project are right on target. You
can run your own project and become your own construction manager. Often the client doesn’t have a clue
and they are running fifteen subs and don’t want to cut loose control and it turns into a nightmare. They
are never there, but they hold the power of the purse. When the subs know that you’re not cutting the check,
they don’t paying attention to you.
It was very informative and very on target. And this is the wave of where construction will go. A great
book to pass on to clients. I’ve got a client now where they can’t get a hold of a contractor. They’ve done a
lot of footwork, but don’t have enough information to take the reins and do it. It’s very hard to get contrac-
tors right now and this is a great resource for people who could do this on their own. This will give them
enough to know what they are getting into at the very least. It gets crazy with people who don’t know what
they are doing.

Reader Comments •
A contractor’s perspective. We hear how to sell. And we find contractors that just slam-dunk people,
and we are trying to build a reputation for doing what’s fair. I’ve laid my books open to people. Everyone
talks about leveling the playing field, but that’s difficult when there’s no one to reinforce the certification of
contractors. We find scabs out here who undercut the price but don’t carry the insurance, the Workmen’s
Comp., and they’re not above board. We often have to go out and clean up a bad mess. If people really want
to level the playing field they have to reinforce the certification of contractors.
Instead, let’s give everyone the information to be a true owner-builder. We’re trying to run a square
game. We try to make enough profits to stay in business for another day. We get slammed with high liability
insurance, workers comp., and all the overhead. I’m all for people being fully informed. If someone had this
information and had their project as well-planned as it should be, it would be a joy to work for them. There
would be very few problems. That does everybody a service.”
Larry T. Driggs, ID
“I love your book. You talk about a software project in the beginning of the book. I’ve used that as an illus-
tration for the need for planning at my own work.”
Scott A. Walnut Creek, CA
“It was very well-written. I liked the summary level detail.”

Gerry R. Austin, TX
“It’s inspiring. The testimonials in there are amazing. It’s very tempting to do this.”
Kathy N. Truckee, CA
“I appreciate your book. I thought it was a very good source. I also appreciate the postings on the web-
site.”
Dave M. Sunnyvale, CA
“This book is done very practically. I like the way it’s put together. It’s not theoretical, it’s my type of book.
Thank you for doing this. You did a great job putting this together.”
Anthony L. San Jose, CA
“The book reinforced our thinking that this is all do-able.

Ken & Linda L. Silver City, NM
“This is the best thing I have gotten my hands on. I checked it out at the library and decided I needed my
own copy to make notes in.”
Mark F. Lynnwood, WA
“I found the book very useful. I found the information you gave on making a contract very helpful.”
Richard R. Huntingtown, MD
“This book has been just tremendous. I read it once and marked it, and now I’m going through again. It’s
been so helpful, I would highly recommend it. I’m thrilled with it.” More than Notes in the color and
Bill H. Sacramento, CA 50 pages of font of the one at left are
reader com- clickable in our electronic
“It’s very helpful, especially for someone new to this sort of thing.” ments are version. (Page 262) You
Jason A. Lake Station, IN viewable on can click through to join
our website. any conversation shown
in our sidebars.

vi • Letter To The Reader
Letter to the Reader

I had no idea I could build a house.
I didn’t know the first thing about carpentry, or cement work, or any of the trades; I had no tools;
and I certainly didn’t have enough money to build the kind of place I knew I wanted.
Yet here I sit in the nicest office I’ve ever had in the nicest home we’ve ever owned enjoying every
comfort and a breathtaking view of the mighty Wasatch Mountains.
Elaine and I built this place. We truly love it. It’s a gorgeous house that has everything we want in
it and works very well. It’s a great comfort because we can manage the mortgage payment, and because we
go to sleep knowing that we have more equity in it than we owe.
I never thought we could do this, because people assume you can’t. And the thought that you
could do it far less expensively than a general contractor really causes resistance. People told us “no” all the
time.
We decided to write a book that would tell you “yes”.
Enjoy this book. It’s loaded with every tool, technique, and tip that we used, most of which we
couldn’t find in any other book.
One more thing. We sometimes felt very alone building our house. Because we don’t want that to
happen to you, we have provided a website where you can interact with other owner-builders. Elaine and I
are accessible via toll-free number and email as well.
Don’t let anybody tell you you can’t do this.

Table of Contents • vii
Table of Contents
Chapter 1: You Can Save $100,000...................................................... 1
Amazing Cost Savings..........................................................................................................................................1
Best Tax-free Way to Make Money......................................................................................................................2
“Cold Sweat” Equity.............................................................................................................................................3
Lowering the Threshold.......................................................................................................................................4
Other Benefits.......................................................................................................................................................4
Myths and Propaganda........................................................................................................................................5
Owner-Builder Misconceptions..........................................................................................................................9
Qualifications of an Owner-Builder.................................................................................................................. 11
Chapter 2: Learn the Wealth-Building Secret..................................... 13

People in Construction Know the Secret..........................................................................................................13
Free and Clear Step-up Strategy........................................................................................................................ 14
Owner-Builder Exclusive................................................................................................................................... 16
Retirement Plan.................................................................................................................................................. 17
“Open Up Your Veins”....................................................................................................................................... 17
D.S.D.E................................................................................................................................................................ 18
Rock Star Wages..................................................................................................................................................19
Guerilla Economics............................................................................................................................................20
Chapter 3: General Contractors Aren’t What You Think They Are... 21

Contractor Games.............................................................................................................................................. 21
You’ll Shop Better...............................................................................................................................................24
You’ll Be More Organized..................................................................................................................................25
You’ll Give It More Attention.............................................................................................................................26
You’ll Keep Your Savings....................................................................................................................................26
How Much Can You Save?.................................................................................................................................27
When is 10% Not 10%?......................................................................................................................................28
Contractors Mark Up Their Costs to You.........................................................................................................29
Get Bids from Three Generals...........................................................................................................................30
Chapter 4: You Can Manage Better Than a Contractor.................... 31

Management Concept One: “People Often Ingest M&M’s”............................................................................ 31
Management Concept Two: “Plan Hard, Work Easy”.....................................................................................32
Why Plan.............................................................................................................................................................33
I Want a Thousand Hours!................................................................................................................................34
Act Like You’re a Business..................................................................................................................................36
Planning Steps.....................................................................................................................................................38

viii • Table of Contents
Chapter 5: You Will Profit By Building a True Custom Home............ 51

Starter, Step-up, Custom, Dream House........................................................................................................... 51
Four Ways to Make Money................................................................................................................................ 52
Your Dream Home Notebook............................................................................................................................53
You or the Market?.............................................................................................................................................54
Real Estate Survey...............................................................................................................................................58
Sub and Supplier Input.......................................................................................................................................60
Features of a Custom Home............................................................................................................................... 61
A House that Works............................................................................................................................................62
Quality Considerations......................................................................................................................................63
Comfort and Convenience Considerations......................................................................................................64
Energy Saving Features......................................................................................................................................66
Chapter 6: Conquer Details Room By Room and Save 20%............. 69

Change Orders Are Costly.................................................................................................................................69
How Specs Save You Money and Get You a Better House...............................................................................71
How to Develop Room by Room Specifications...............................................................................................72
Architect vs. Designer.........................................................................................................................................77
You Are Ready to See Your Designer.................................................................................................................79
Good Design Saves Money in Four Ways..........................................................................................................80
Chapter 7: How to Get the Subs on Your Side.................................... 85

How to Find Good Subs.....................................................................................................................................85
How to Interview Subs.......................................................................................................................................88
Detailed, Accurate Bidding................................................................................................................................88
Get Three Bids from Subs on Each Item........................................................................................................... 91
How to Get Bids..................................................................................................................................................92
Follow Up Your Bids...........................................................................................................................................93
Chapter 8: How to Build a Budget That Is a Powerful Miracle Tool 95

Start with Your Bids from General Contractors...............................................................................................95
Spreadsheet Budgeting.......................................................................................................................................96
Riverbottoms House Budget..............................................................................................................................99
Budget Worksheet............................................................................................................................................. 105
“Shop” Your Budget for a While......................................................................................................................106

Table of Contents • ix
Chapter 9: Commando Shopping Techniques.................................. 119

The Price of Marshmallows............................................................................................................................. 119
Bargains............................................................................................................................................................. 121
Identify Your Suppliers.....................................................................................................................................123
When You Pay for Materials Separately You Save..........................................................................................125
How to Use a Computer to Save......................................................................................................................126
Excerpts from The Owner-Builder Book: Construction Bargain Strategies.................................................... 131
Chapter 10: How to Schedule the Work at a Savings.............. 151

Another Miracle Tool....................................................................................................................................... 151
Picking the Right People is Half the Battle..................................................................................................... 152
Computer Scheduling.......................................................................................................................................154
Live in Your Schedule for a While...................................................................................................................154
Sample Construction Work Schedule.............................................................................................................156
Schedule Worksheet..........................................................................................................................................158
Back-up Plans to Keep the Work Going.......................................................................................................... 162
Schedule Reinforcement Program................................................................................................................... 163
Chapter 11: How to Make Your Lender Swoon................................ 165

Your Next Thousand Hour Payoff................................................................................................................... 165
What the Lenders Want.................................................................................................................................... 166
Your Loan Proposal Book................................................................................................................................ 167
Lenders Want to Put a Copy of the License in the File.................................................................................. 169
Don’t Budget Self-Work.................................................................................................................................... 170
Your Loan Presentation.................................................................................................................................... 171
Shop for the Right Terms................................................................................................................................. 172
Chapter 12: Paperwork Before You Begin........................................ 175

Anatomy of a Lawsuit....................................................................................................................................... 175
Get Good Protection........................................................................................................................................ 177
Lien Waiver....................................................................................................................................................... 178
Write Good Contracts...................................................................................................................................... 180
City Permits...................................................................................................................................................... 181
Contracting Agreement.................................................................................................................................... 182

• Table of Contents
Chapter 13: Six Months to Victory.................................................... 185

“Integrate”......................................................................................................................................................... 185
Step One............................................................................................................................................................ 186
How to Get Subs to Show Up........................................................................................................................... 186
Rules of Work.................................................................................................................................................... 187
Running the Job................................................................................................................................................ 188
Cost Accounting............................................................................................................................................... 189
Daily Record......................................................................................................................................................190
Your Video Camera and Other Unlikely Tools...............................................................................................190
Emotional Roller Coaster................................................................................................................................. 191
Chapter 14: Smooth Execution Saves Money & Improves Quality....197

Other Daily Duties........................................................................................................................................... 197
Why You Need to Be On site............................................................................................................................200
Consensus Breeds Creativity............................................................................................................................202
Clean Job Saves Five Percent............................................................................................................................203
The Inspector Is Your Friend...........................................................................................................................204
You Can Get Independent Inspections...........................................................................................................205
Inspections Checklist.......................................................................................................................................206
Staying on Schedule..........................................................................................................................................208
If You Do Self-Work — Control It...................................................................................................................208
Rules of Self-Work............................................................................................................................................ 211
Sub Recognition................................................................................................................................................ 213
Chapter 15: Mistakes You Can Avoid & Successes You Can Achieve..... 215
Mistakes............................................................................................................................................................ 215
Disasters............................................................................................................................................................ 217
Successes............................................................................................................................................................ 217
How to Score Yourself...................................................................................................................................... 219
If You are Married............................................................................................................................................220
The Ten Commandments of Owner-Builders................................................................................................ 221
Chapter 16: If You Decide to Use a Contractor................................227

There are a Lot of Reasons to Use a General...................................................................................................227
How to Hire a General.....................................................................................................................................228
Who’s Got the Risk?..........................................................................................................................................229
You Know What You are Getting Into............................................................................................................ 231
Afterword: Once You’re In.................................................................237

Table of Contents • xi
Minimize Punch List........................................................................................................................................ 237

Punch List.........................................................................................................................................................238
Lower Your Property Taxes..............................................................................................................................242
Better than Wall Street.....................................................................................................................................242
Help Someone Else...........................................................................................................................................243
Index.....................................................................................................245
Appendix: “The movie they made in the Riverbottoms house”...... 251
Resource Guide....................................................................................257
The Owner-Builder Book: Special Reports........................................................................................................257
Books.................................................................................................................................................................262
Book Combinations..........................................................................................................................................266
DVDs.................................................................................................................................................................268
OwnerBuilderBook.com....................................................................................................................................272
Free Download Gallery.................................................................................................................................... 273
Paperless Coupons............................................................................................................................................ 274

Chapter 1: You Can Save $100,000 Forums
We just signed the
last papers on our
construction loan.
The loan amount,
Amazing Cost Savings which includes
all our costs, less
about $45,000
Y
ou are driving down a beautiful street and you see houses that you would like of our own was
to own. These are spacious custom homes with many upgrades and custom $305,000. The
appraisal which
features. They cost around $450,000. You want to build a house like that, but was done off only
not at that price. You sigh and drive on. But wait a minute. What if you could save our plans and our
35% on construction and build that $450,000 house for $328,000? property came in
at $470,000 for
a 2,538 sq. ft.
Adjusting for land value, the average owner-builder (“O-B”) I studied saved house. Of course
that much on the same type of property. How does $293,000 strike you? That’s what we’re not done
building yet, but
it would cost if my own owner-builder savings were applied to that $450,000 house. that is an exciting
How about $268,000? One of the O-B’s I studied saved that much building a similar start for a first time
house. o-b adventure. I
hope others can
see these kind of
In these examples, I have assumed that the $450,000 house was built on land results.
with a value of $100,000 and construction costs were $350,000. And I have applied Wayne in Fresno,
CA
savings of 35%, 45%, and 52% — actual achievements of people like you.
Forums
I live in Minneapo-
lis greater metro

• Chapter 1: You Can Save $100,000
area and just com-

pleted my second Savings Comparison
home. I built my
first 7 years ago. Construction O-B O-B Cost of Total Cost
This house was Price of House Cost of Land Cost Savings Construction with Land
started in April
and finished in $ 450,000 $ 100,000 $ 350,000 35% $ 227,500 $ 327,500
August. I estimate
we saved more $ 450,000 $ 100,000 $ 350,000 45% $ 192,500 $ 292,500
than $100,000
$ 450,000 $ 100,000 $ 350,000 52% $ 168,000 $ 268,000
by doing the
contracting ourself.
We ran into many The 35% savings example comes from my interviews with owner-builders
more problems
with this house,
from across the U.S. and Canada. Their average savings on construction costs were
but I will do it 35%. These savings are calculated either against actual builder estimates of construc-
again in the near tion cost, or against appraised values after completion.
future. I love the
building process.
Laurie in Elk River, The 45% savings example is our own. Elaine and I built our home for $63
MN per finished square foot (in current U.S. dollars) after it was estimated by a general
Sources Say
contractor at $113 per foot, exactly as specified, with the addition of many upgrades.
“Most people We saved about $180,000, or 45% of the estimated cost.
think that to build
a home you have
to know a lot
The 52% savings example is that of Vince Miner, a college tennis coach I
about architecture, interviewed. He saved 52% on the cost of his custom home by owner-building.
bricklaying, car-
pentry, electricity,
and plumbing.
Not so. Most Best Tax-free Way to Make Money
professional build-
ers are essentially
managers. They “You can make more tax-free money building houses for yourself than any
leave the actual other way.”
hammering, nail- Rod Allred, general contractor.
ing, and wiring to
specialists.”
From Everything Owner-building is the best-kept wealth secret around. I first understood this
You Need To
Know About Build-
when we struggled our way into our first house in Denver, 30 years ago. We tried
ing the Custom painstakingly for a year to save up the $3,000 down payment from my IBM paycheck,
Home and wound up putting part of it on a credit card. I just barely squeaked in before the
(See page 263)
house got over my borrowing limit. The house cost $55,000.
Sources Say
Habitat for A year and a half later, when we moved out of town, I sold the house for
Humanity: How to $74,000, paid commissions of $4,000 and had $18,000 left over. Since I purchased
Build a House out-
lines the investiga- another home right away, I owed no taxes. The $18,000 was mine! I put $10,000 down
tive work you can on the new house and had $8,000 in cash. With the cash, I paid off two automobiles.
do to find a good I didn’t even have $500 in savings from the years at IBM. But I had $18,000 in cash
building lot.
from my house. And I found out an amazing thing about that house profit. It spends
The Complete just like any other money!
Idiot’s Guide to
Building Your
Own Home has Living expenses and taxes had eaten up my generous IBM salary, but the
chapters on choos- money we made from our house was intact. We made that money from appreciation,
ing land and
buying a lot one of the ways that home ownership pays off. Colorado was in the midst of a real
(See page 263) estate boom, and we made a then-phenomenal 15% gain per year on our home. I was

Chapter 1: You Can Save $100,000 •
ecstatic. It wasn’t until years later that I discovered an even better way to make money O-B Connections
on a home. I bought The
Owner-Builder
Book and
Building booms come and go, and house appreciation fluctuates. It is rarely downloaded the
more than ten percent per year, the recent boom notwithstanding; and it can be software and
flat, or worse. As we go to press with this edition of The Owner-Builder Book, the found them very
useful in being an
year-over-year median price for new homes in the U.S. actually dropped a little, a Owner-Builder.
rare occurrence after a 10-year run-up in most of the country. A surer, faster way We basically tore
to make money is through owner-building your home, because you can accomplish our house down
and lived in a 24’
your gain in a very short time, usually less than six months. We saved 45% on our C class RV in front
home in the first year by owner-building, and we continue to add five percent or so to of the house with
its value each year through appreciation. The average appreciation amounts to more 3 kids under 10
years old. We sur-
than $2,000 a month, but during the time we built our home we made about $25,000 vived and saved
a month through construction savings. over $100,000.
Sherry in Ross-
moor, CA
This sizeable income is protected from taxes in two ways. First, money
saved building your house is not taxed at all when you save it. You don’t pay federal, Sources Say
state, social security, sales tax or property taxes on what you save. It goes direct and “As the developer
and general
untouched into your home equity and your net worth. Second, when you sell it, the contractor of your
U.S. Taxpayer Relief Act allows you to keep your profit tax-free. own house, you
perform the most
important (and
If you are married and file a joint return, you can keep up to $500,000 in best paid) roles in
house profits without paying a dime in taxes. You must live in the house for two years home building.”
to enjoy this tax-free bonanza. But you can do it again and again, as long as Congress From Build Your
Dream Home for
maintains the current law. You no longer even need to build or buy a new home with Less
the proceeds. (See page 263)
Some people think that winning the lottery is the best way to make money, Forums
Help! I have 2
but it’s hardly tax-free. You can “make” a million dollars on the lottery, yet with the kids (5 mo. and
$50,000 checks you would get once a year (they usually pay the money over a 20-year 21 mo.) and am
period), the various taxes you’d pay (more than 50%), and the things you’d spend it feeling a bit dis-
couraged about
on, very little if any would go to your net worth. In fact, I added more to my wealth going into such
each month I was building my house than a million-dollar lottery winner does in a a big project.
whole year. All the savings in building a house for yourself go to net worth. It’s pure Has anyone else
out there accom-
wealth! plished such a
daunting task with
kids in tow?
Birgit in Joliet, IL
“Cold Sweat” Equity
Hi Birgit. My
husband & I are
To achieve this wealth, you don’t need to swing a hammer or do much self- midway through
work on your home. On the contrary, I advocate limiting self-work and emphasizing our home construc-
your role as manager of construction. tion and have four
kids (18 mos.-10
yrs.). We are all
The big savings in home costs that build value are often called “sweat equity” living on site in a
— you provide labor to reduce costs on a new home or to improve an existing one. 35-ft travel trailer
throughout this pro-
The value of the property and your equity in it rise. This book will teach you “cold cess. While it’s not
sweat” equity — the savings and value you get through your worry, planning and ideal, we wouldn’t
management. Most of the savings described in the chapters that follow are in plan- have been able to
build the home we
ning, organizing, and controlling construction costs.

wanted without Lowering The Threshold

generalling it
ourselves. The
cost difference For many, home ownership is an unattainable dream, beyond the financial
(our savings) will reach of the average person. The owner-builder process can change that.
be approximately
$175,000.
If the median new home cost is $270,000 and the mortgage payments are
My husband is a $1,800 per month, only people with household incomes of $5,400 per month, or
stay at home dad,
so he’s on site to
$65,000 per year can qualify (rule of thumb: income should exceed three times pay-
manage things ment). This amount of monthly income ranks at about the 60th percentile of U.S.
and handle day households. At a savings of 35% of construction cost, that same average home could
to day problems,
but we’ve really
be erected for $200,000, requiring a monthly payment of $1,200 and a household
been partners in income of $4,200 or $50,000 a year, hitting the 55th percentile of incomes in the
this process. So, U.S.
the short answer
to your question
is YES. The long For those who are just trying to enter the market in the smallest possible
answer is yes, way, you may be looking at a project in the $100,000’s. Kyle and Rachel Simons pur-
but be prepared
and have your
chased a starter home for $125,000 and in two years were thrilled to know its value
homework done had climbed to $150,000. Look at those numbers. The $125,000 mortgage requires
before you begin. a monthly payment of $950 for a household income of $2,850 a month or $32,000 a
Since your time
will be split
year. This comes in at the 35th percentile in the U.S. Saving 35% on the construction
between children portion would put that project at about $91,000 for a monthly payment of $700. The
and your project qualifying household income would be $2,100 a month or $25,000 a year, about the
your time to investi-
gate things during
25th percentile of U.S. households.
the construction
period will be Saving 35% or more on construction costs can make home ownership avail-
more limited. I
can’t stress enough
able to an additional ten percent of U.S. households or about twelve million more
to be prepared. families. Ownership of nicer homes is also available to a wider group. I live in an
Good Luck! exclusive neighborhood that includes the ranch of former football star Steve Young,
Kirsten in Atas-
cadero, CA
and the home of TV personality Donny Osmond. This is a neighborhood far above
our means. Typically, the mortgage on a home like we live in would require a monthly
Hi all, ANY- income of $10,000. Because we saved $180,000 on the home, we were able to save
THING is possible
if you want it bad
$1,000 on the monthly mortgage. Multiplying times three, we were able to get into
enough. In the the house at an income of about $3,000 a month less than otherwise indicated.
past 10 years I
became a nurse,
during which I had
four kids, and built Other Benefits
one home. Last
week got another
college degree We saved 45% building our home, but the benefits didn’t stop there. Our
and in three satisfaction has been enormous — real daily pleasure in our new home and a sense of
weeks we are all pride that we accomplished what we set out to do.
moving from NJ
to New Mexico
where we bought In doing this, we didn’t cut any corners. In fact, we always chose the “upgrade”
three acres, while while trying for the best deals we could get on the improved version. We upgraded the
we are renting
there we will be carpet, cabinets and appliances from the original specifications. We bulked up the
building our next framing, the insulation, the wiring and the concrete work. We upgraded the fixtures
house, but this and added flexibility for future upgrades to the house as each opportunity presented
time being the
O-B!! WHILE WE itself. In many cases, we found an upgrade available at the same or lower cost than
ARE EXTREMELY the going price for standard levels of finish. For instance, we actually saved money
NERVOUS, we shifting from Corian™ to granite slab countertops when a bargain arose.

As your own contractor, you get to buy cafeteria-style. You may have things also are looking
you want to do that vary from the norm, and which save labor dollars. You don’t at it as a great
have to argue the merits with a contractor, like using pre-built roof trusses instead of new adventure...
one which I am
“stick-built” roofs. Or using structural insulated panels or insulated concrete forms eagerly waiting to
instead of conventional stick-built exterior walls. You can realize increased savings start. Have faith!!!
on labor because you negotiate with each trade directly. Stephanie in Las
Cruces, NM
You get the extras you want without the surcharges occasioned by fixed-price We have four
bidding. One of the pleasures of our new home is ceiling fans. They can move the heat children 6 to 12
years old. We
out of a bedroom quickly on a summer evening and provide a very pleasant breeze just started our
through a summer night. Builders will add ceiling fans as upgrades to custom homes foundation, and
at upwards of $350 apiece. We put in each high-end fan ourselves for about $90 and it seems like a lot
of the pressure
each economy fan in children’s rooms for about $45. At that price we installed as has let up. I think
many as we wanted, and controlled the quality closely. the hardest part
so far has been
all the stuff before
We saw just the right vinyl siding at a home & garden show, and met an construction, but
award-winning craftsman to install it. We removed the original siding subcontractor we have only just
from our plans and engaged the new craftsman without a hitch. We found a solid begun so that
could change.
vinyl deck material we wanted to use. We negotiated for a contractor price, and got it I think if you’re
installed at far below market value. In the course of construction, other ideas pretty organized
and improvements occurred to us. We implemented them without having to nego- you can do it.
Good Luck.
tiate with a contractor. We found many bargains, and exploited them on the spot. Denise in Elk
Grove, CA
There are unexpected benefits when you build your own house. You have
control over quality and features. You get inexpensive extras. You ensure low main- Sources Say
tenance and ease of repair. You control energy-efficiency and comfort. You derive a “Here are the
continuing sense of accomplishment, make new friends, experience family and per- major ways to
save money: Real
sonal growth and gain prestige. estate commis-
sion, 7%; Builder
In the course of interviewing architects for The Owner-Builder Book, I talked markup, 20%;
Savings on mate-
with an architect from Louisiana who was curious about our owner-built home. I rial purchases,
described the specifications and asked him what a house like ours is worth. He said 4%; Cost-saving
that in his market, our home would appraise for “at least $190 per square foot”. After construction, 2%;
Doing work your-
being told so often that one cannot achieve a success like ours, this brought me a deep self, 9%; Total: up
sense of satisfaction. to 42%.”
From The Com-
plete Guide to
Contracting Your
Myths and Propaganda Home
(See page 263)
One of the biggest satisfactions in owner-building our home has been that Journal
we “beat the system”. The system tends to be a closed one, reserving the privilege Just got the call
of owner-building to construction industry “insiders”. Many myths about owner- from the bank
– They have our
building have been spread about as propaganda by general contractors. Even some appraisal in hand
construction lenders have voiced the stereotypes you see here. and plan to close
on the construction
loan tomorrow!!
Since contractors have their own industry groups and associations with their
own publicity machines, they can perpetuate attitudes about something like owner- We had to fire
building that they consider to be a threat. Very little exists to counteract the flow of the first appraiser
because she just
misinformation. Owner-builders have no organized voice, no association, no official

didn’t seem to magazines, no propagandist. As a result, many of the following attitudes have come
want to pursue to be accepted as fact.
comps. She
dragged her feet
for almost two
weeks and made
“You Can’t Save Any Money”
no progress.
We also found This is a widely circulated idea that has no basis in fact. Every owner-builder
a new bank that I surveyed saved something over the cost of a general contractor-built house. I
because the last
one was limiting know of several instances of “civilian” O-B’s (non-construction people) completing
the appraiser to their new homes with 50% equity or more. Among construction tradesmen who
a 10-mile radius. owner-build, instances exist of savings of 60% and more in terms of cash expended.
Anyway, the
appraisal came in (Part of their savings is due to trading labor with other tradesmen.)
at $315,200. By
our calculations, if This is not to say that O-B’s don’t exceed their construction budgets. Budget
we stay on budget
(yeah right!) we’ll overruns are common in all branches of construction. Mistakes, surprises, and
be looking at upgrades caused my own budget to go over by $25,000. But I still saved 45% against
almost $100,000 contractor estimate.
in equity upon
completion!! Now
THAT’s motivation
enough for me “The Professional Builder Passes Inspections With Flying Colors”
to pour as much
sweat as possible Building inspectors tell me they catch instances of contractors cheating
into this project!
I’m re-reading The frequently, although less so on custom homes. A veteran general contractor whom
O-B Book for the we hired to do air conditioning and furnace work caused me one of my few failed
third time... inspections. He had framed up the furnace closet three inches too shallow to pass
Danny in Sparta,
IL code. He had been general contracting and doing furnace work for 40 years. He had
to re-frame the closet, and since I was dumb enough to pay him by the hour, I got to
Sources Say pay for his indiscretion.
“You will get more
of what you want
in your house, with Owner-builders on the other hand are regarded as a good bet by inspec-
fewer hassles, tors. They are building for themselves, not to protect a contractor’s bottom line. As a
when you act as
your own general result, they are seen as interested in quality, durability, and safety.
contractor. Most
contractors are
very staid. They “Contractors Get Better Prices Than the Public”
like to do things
the same old way.
This often causes I had trouble getting a good price on the lumber for my house. My initial
problems for the quote came in at $26,000. A general contractor I used as an advisor sent me to his
buyer who wants lumberyard to get his prices. He had built many homes with his lumber dealer over
something done
a little differently. the years. The dealer priced the package at $24,000. I was pleased, but decided to give
With you as the it another try. Then a prestige builder friend of mine who buys $300,000 a year in
general contrac- lumber had his lumberyard estimate it. This time the price came in at $18,000. The
tor, you get things
done as differently materials were identical, and I was able to beat the price of my construction advisor
as you like.” by $6,000, and the initial quote by $8,000. The advisor was amazed. He had never
From Be Your Own questioned his prices at the lumberyard.
House Contractor
(See page 263)
A retired cement contractor told me that he had a deal with the cement plant
to buy concrete at $30 a cubic yard, years ago. At the time, contractor prices for
concrete were $48 a yard. He kept his prices a secret by signing a non-disclosure
agreement with the plant. His conclusion: “There are contractor prices, and then
there are contractor prices.” This contractor got wealthy by sourcing the material at

secret prices, and passing it on to his customers at street prices. Note well that any Readers Say
contractor who gets a special price may have no motivation for sharing his savings Mark, sorry for
with you. not keeping you
posted (smile).
This has got to be
There is always a better price to be had, usually through research and effort. one of the easiest
Chapter 9 provides you a guide to construction buying at a savings. things I have ever
done. This is the
first home that
I have built by
“Contractors Take the Risk and Relieve the Owner of That Burden” myself. My father
built the home he
Author Ronald Horne says that increasingly, contractors work without risk: lives in (1989).
The exterior is
“There is no risk for the builder any more.” This is particularly true if a home is built complete (3 sides
on a fixed-bid contract, as 90% are. If a contractor agrees to a fixed price with you, brick, HardiPlank
he knows that he can meet it because he has control over materials and workman- in the rear). Finish
grading will
ship, and can cut corners to protect his profit. For the owner, the risk is the viability start next week.
of the single greatest investment he will ever make. For a review of relative risks, see Cabinets have
Chapter 16. been installed.
Hardwood
flooring installed.
Interior trim to start
“Contractors Can Get Better Quality Materials Than You Can” tomorrow.
One contractor told me that owners were liable to get “crooked lumber” 2,700 heated sq.
ft ranch on a full
because they don’t know any better. That wasn’t a problem for us. Before we signed daylight base-
our lumberyard credit agreement, our framer advised us to cross out the paragraph ment. 4 br, 3 ba,
that said we had to pay a restocking charge for any returns. He then inspected all the split configuration.
Formal (what-
stock that was delivered, and refused to accept anything that was hard to work with. ever that means)
I hired the framer; the framer checked the lumber. livingroom, formal
diningroom,
great room. 3-car
“The Contractor is There to Protect Your Interests” garage (675 sq
ft.).
The interests of a contractor and his customer are frequently at odds. The The hardest part
customer wants every upgrade and attention to detail possible. The contractor wants of this project
was planning.
every bit of his planned profit, and that means economizing on costs. Most of these The home was
trade-offs are decided by the contractor during the course of construction. Who do designed on a
you think he decides for? slab, I made
changes to
accommodate
“Owner-Builders Build Shoddy, Cheap Houses” a staircase. I
planned on using
an engineered
This makes no sense. The owner wants the best for his comfort and his floor system, but
decided to build
investment. Unless he is doing the work himself (not recommended) he is contract- using dimensional
ing for the best quality he can get. In reality, owner-builders are known for upgrades lumber (that was
and extras, not for shortcuts and cheating. fun).
At this time, I
“Owner-Building Isn’t Legal” am building the
home at approx.
$77/sq. ft. We
Unless you buy land in a developer-restricted subdivision, there is no law (my wife) decided
against owner-building in the United States. You must own the land, obtain neces- to put in a few
updated features
sary permits, and make timely requests for municipal inspections. You are expected (granite counter-
to occupy the house. You may be required to carry certain forms of insurance. tops, stainless steel

appliances, etc.). “You Have to Have a License”

Land was pur-
chased for $54K
(2 acres). Subject Not to build your own house. We know of one state where you pay a small fee
to appraisal, value to get a G.C. “license”, but there are no examinations and no special qualifications. In
$365K.
a few areas there are restrictions against doing some of the mechanical trades your-
We will do self, (electrical, plumbing, heating and air conditioning). But even those restrictions
this again for are rare.
ourselves in 2
years. I have been
approached with
building for others.
“Banks Won’t Lend to You Unless You Have a Contractor”
As a side note, I In nationwide telephone interviews of bankers, I found that 15% of banks
am dealing with
the reality that not
refused to make construction loans to owner-builders. 40% made the loans with
everyone will do some restrictions. 45% made the loans with no special restrictions. Chapter 11 shows
what I am doing. you how to overcome any restrictions.
Not that they
can’t, but that they
won’t. “You Can’t Possibly Get It Done on Schedule”
There was a
little fear when I My survey of owner-builders indicates that the average planned schedule of
started, but the completion for a custom home was about nine months. Average actual time was nine
fear left me after
beginning and months. About half of my respondents finished in under seven months. Vince Miner,
turned into the owner-builder extraordinaire, finished his 4,000 square foot house in four months.
desire to finish. Gary Ziser built and occupied a similar home in three and a half months.
I get frustrated
trying to convince
others to do the
same. “You Will Save Enough In Interest Alone To Pay a Contractor”
I did not do this My carrying charges on a seven-month $190,000 construction loan were an
alone. I had great
subs. I have seen average of $780 a month. The National Association of Home Builders says average
the work of all the completion time on average contractor-built houses is six months. As it took me
subs that worked seven months to build, completing the house in six months would have saved me
on this home prior
to hiring them. only $780 in interest.
I feel honored to But many contractor customers complain about how slow contractors are
be part of this
project. I am 39, to finish a job. Particularly on custom homes, the contractor time to complete can
married with one be much longer. My neighbor built a 9,000 square foot dream home with a contrac-
child. Let me know tor. The original schedule was 14 months, and they got the job done in a mere 30
if you need more
info. months.
Phillip C. Wallace
Sources Say “You Can Make More at Your Job Than What a Contractor Costs”
“Unless special
licensing is
required in your The average American saves less than ten percent of his salary. However, all
area, you are just of the savings you realize building your home go directly to your net worth. If you
as much a builder build a $350,000 house for $250,000 you enrich yourself by $100,000 in equity. If you
as the next guy.”
From The Com- make $100,000 at work, you enrich yourself by less than $10,000 on average, a sav-
plete Guide to ings rate of less than $1,000 a month. The average owner-builder I studied completed
Contracting Your their house in seven months. Which is better, $100,000 saved or $7,000?
Home
(See page 263)

Few people have to quit their jobs to act as their own general contractor. O-B Connections
However, you will have to make some choices during the construction period. John, I am cur-
rently in the pro-
cess of building
“The Subs Won’t Show Up for You” an addition to my
home in Pleasant-
ville, I would be
A good portion of this book is devoted to the problem of managing subs glad to share info
effectively, starting from subcontractor interviews and references, to the bidding with you. I was
going to move but
process, to on-site management. Some of the O-B’s I interviewed had no problem in Westchester
with subs showing up. Much more to come on this subject. County everything
is so expensive,
i’m sure in your
“You Can’t Do It Because You Lack Know-How” area prices have
increased a lot
also. O-B is a
You may indeed lack construction skill. However, contracting a home is not great way to
a construction skill; it is a management skill. save, contractor
by me are insane
with their prices,
One contractor told me that no one should expect to come in and do what I would highly
a contractor does any more than expect to do what a doctor does. He said, “What if recommend you
look for individual
my wife needed surgery — do you think I could cut her open with a knife and start people to do the
messing with her organs?” phases of con-
struction. you will
have to do some
I have to laugh at the gruesome illustration. I can just see a couple hearing work and juggle
this harangue and the wife squirming at the vivid analogy. And then placing them- multiple tasks
selves wisely in the hands of this surgeon of brick and mortar. but the saving is
large and in NY
even better than
But the analogy is a scare tactic and hardly apt. This builder went on to say what the people
that he had seen windows framed into owner-builder walls without headers, and on this forum say.
Although some
later on, the walls would sag, he said. Well, O-B’s rarely do their own framing. This of the prices
is the province of the framer. It is inspected by the inspector. You choose the framer these people are
you trust. reporting seem
unattainable. I’d
be glad to share
A better analogy is that of a homemaker. A builder is more like a homemaker any contacts with
than a surgeon. He shops or should shop for good values; he coordinates the efforts you. Since we
O-Bs here in New
of different members of the group, and manages a budget. The task is a management York are few the
task, not a medical one. only way to show
these contrac-
tors we can do
it without them
Owner-Builder Misconceptions is to do it on our
own. Good Luck.
P.S. You’ll freak
For their part, prospective owner-builders labor under some misconceptions, when you get the
too. Lenders tell me that O-B applicants for construction loans are almost never pre- prices back from
pared. They tend to underestimate the size of the task, and overestimate their own the GC’s – I could
have built a new
ability to contribute. Many don’t understand the risks involved and how to manage house for the price
them. they were quoting
on my addition.
Steve from Pleas-
“I Could Do This With My Free Evenings and Weekends” antville
The general contracting task will actually take owner-builders about one
person-year of effort, though you could spread the planning part over several years

10 • Chapter 1: You Can Save $100,000
Sources Say of time. Most of that can be done on evenings and weekends. The
“Many would-be home builders are construction phase requires about four hours per working day
discouraged from attempting to build of the O-B’s time. At least half of that during normal working
their own homes because of fear due
to the mystique of modern construction hours.
practices.”
From The Complete Guide to Contracting
Your Home “Once I Get the Ball Rolling, the Project Will Manage Itself”
(See page 263)
Sources Say This could be true for someone who has done dozens of
“We (contractors) aren’t tradespeople houses and had systems and routines in place to manage the pro-
or very handy do it-yourselfers. We are cess. The construction phase of building a house has been called
professional managers of people, time
and money. Those are the required “Mr. Toad’s Wild Ride” for good reason. Many things will go
skills for managing your own renovation wrong if not managed, and many opportunities for improvement
project.” of house comfort, longevity and value will be missed.
From Be Your Own Home Renovation
Contractor
(See page 263)
“Subs Will Show Up as Promised and Do What They Prom-
Sources Say ised”
You and the Law
Dennis Beaver, Attorney at Law For the
Times-Standard Almost never.
PATIENCE BIG MISTAKE WITH NEW
HOME BUILDER “There Is Only One Way To Do It”
Dietz-Crane builds homes all across
America. They are part of the D.R. Some O-B’s will not take counsel from the subs they hire
Horton family of construction firms, and for possible improvements in design or approach.
describe themselves with these words:
Pride, Care and Craftsmanship go
into every home we build. Come meet
the builder other builders talk about.
“My Construction Drawings Provide an Infallible Guide for
Business is good for Dietz-Crane, and the Subs”
for D.R. Horton, very good. Unfortu-
nately, what is good for them -- a home
construction universe on steroids -- may One key to saving time and money is to be decisive. Many
not be especially good for some of their questions as to the owner’s desires and intent arise every day on a
customers.
custom home project, in spite of detailed drawings.
Two years ago in June, Andy Tang
and his wife moved into a very attrac-
tive Dietz-Crane home in the Rancho “The Subs Know What They Are Doing and Take Care of
El Mirage subdivision, near Phoenix,
Arizona. “Our house came with a Everything”
new Whirlpool fridge which had been
installed sometime before we moved One O-B went on vacation and returned to find that the
in,” Andy Tang stated in an e-mail. “The
freezer could not make ice, and the roof had been placed on his house, but that the second story had
rest of the fridge was lukewarm. After been omitted.
going through all the troubleshooting
steps in the manual, I called Dietz-Crane
customer service, and instead of imme- “The Subs Will Do Everything They Can To Save Me Money”
diately just exchanging this obviously
defective refrigerator, I was told to deal
with Whirlpool,” Andy wrote. “Remem- Most savings come through persistence and planning.
ber, this is June, Phoenix, and we were Help from any quarter is welcome, but it rarely comes spontane-
looking at daily temperatures well over
100. I also had a fridge full of food that
ously.
would go bad,” he added.

Chapter 1: You Can Save $100,000 • 11
Qualifications of an Owner-Builder Construction crews were still in Andy’s neigh-

borhood, working on other houses, so it
would be logical and most customers would
1. You come to the job each day prepared to fire expect that, once notified of the problem,
the nice folks at Diet-Crane would simply
people if needed. swap refrigerators. That, of course, would
immediately solve the problem, but Andy
This consists of being clear about what you expect and didn’t know that common sense and prob-
lem solving just seemed too complicated a
holding subs accountable for it. You are writing the check, you notion for “America’s Home Builder.”
are in power. You stage your payments so that you can pay for
performance to date and release the sub if necessary. You can ”I pleaded with the customer service people
to please just exchange this broken fridge!
put your foot down if needed. It was unbelievable, they were building
other houses down the block, installing
appliances, and someone could easily have
2. You are somewhat familiar with construction. just brought me a new refrigerator, but they
refused! While they were generally polite,
I had a tough time understanding how
You have interest in the subject of building and some any responsible home builder could sell a
aptitude, and are willing to learn. You talk the talk of the busi- customer a new home and not immediately
ness. This can be learned from building shows on television, swap out a new but defective refrigerator for
one that worked – I mean, let’s get serious
from builder magazines to which you can subscribe, from here, I as the customer had just paid them
interviewing subs, and from observing building projects, a small fortune for a new house that should
among other places. Even though you may not perform a given have had a functioning refrigerator, not a
broken one. I did not know it at that time,
trade, you can talk about it knowledgeably. but was in for more surprises with Dietz-
Crane and Whirlpool,” Andy told me during
However, overemphasis on the minutiae of building one of our many phone conversations.
knowledge can interfere with the exercise of good planning 2 Years and 5 Repair Attempts Later...
and management, your principal tools. Over the next two years – from June 2003
to June of 2005 – Andy Tang lost two
refrigerators full of food and put up with 5
3. You communicate well. repair attempts by Whirlpool service techni-
cians. “It gave new meaning to the words
incompetent service,” he told me. Even after
You make clear your expectations, and make certain being told by both Whirlpool and Dietz-
they are understood. You can talk to all kinds of people. You Crane employees that his fridge should
can win loyalty and build relationships with the team. You are have been replaced, it seemed that was not
to be. One technician told him there was
capable of making endless phone calls to check on things. a slow Freon leak and the fridge needed
to be replaced, but neither Whirlpool nor
Diet-Crane did what common sense called
4. You pay patient attention to detail. for. Not until Andy was put in touch with this
column on June 13th.
Winston Churchill, who liked to lay brick on his English
Nice Doesn’t Mean Action
country estate and was a competent oil painter, said, “Genius I immediately contacted both Dietz-Crane
is the capacity for taking infinite pains.” The tiny details done and D.R. Horton management in Arizona
right add up to a distinctly superior house. The O-B must be and Texas, asking these questions of
everyone I spoke with: “What is your policy
prepared to take the time to see that things are done right. concerning immediate replacement of a
customer’s defective refrigerator? Why was
Andy put through two years of nonsense?”
5. You have job flexibility.
Everyone I spoke with was polite, friendly,
Either you or your spouse need to spend four hours a assured me that I would be called back
immediately, but that seldom happened.
day or so on site during construction. Many construction lend- In fact, they were sooooo nice, and I
ers interview their applicants about the circumstances of their concluded that is their way of dealing with
employment to ensure this flexibility. complaints; be nice, but that’s about all, if
Andy’s situation was typical case.

12 • Chapter 1: You Can Save $100,000
One of their Customer Service Coordinators 6. You have determination and problem-solving
-- Bill Miller, who works the same develop-
ment where Andy lives, stated, “I can’t ability.
believe this! I will call you back in 24 hours.
He should have had a new refrigerator.” You don’t lie down at the appearance of the first knotty
I never did hear from him again, despite
being repeatedly told, “We will radio him at problem. There are several every week during construction.
once and he will call you right back.” You will stick with them until they are solved.
Want To Buy A Home – You Can’t Sue Us!
One of the more disturbing things I learned 7. You are financially motivated.
from Andy was a form that Diet-Crane
salespeople made him sign. “It said I
am waiving my right to sue for breach of Parkinson’s Law is that work expands to fill the time
contract or other defects with the house,” allotted to it. A corollary is that a construction budget expands
he told me. “It was sign that form or we will to the borrowing limit of the owner. If your limit is low, you
sell your house to someone else, leaving
no choice as we wanted the house. While will be more ingenious in finding ways to meet it.
I do not think it is legal, and have heard of
other builders sued even with the same kind
of language in their contracts, it seems to be 8. You are organized.
high pressure and not very ethical,” Andy
Tang concluded. If not in general, at least for this project, you are orga-
Is Dietz-Crane any worse than other home nized to a fault. You will tend to the agreements, paperwork,
builders? It’s difficult to say, but if they have schedule and budget tirelessly.
behaved this way where it’s only a refrig-
erator, I have to wonder what it would be
like with much more severe construction 9. You are a good shopper.
problems. In fact, Andy did have another
problem – a water shut-off value that was
stuck in the open position, making it impos- You can tell differences in quality, can find bargains,
sible to turn off the main water source to his and won’t overspend on anything.
house. “We will get right back to you on
this,” he was told. It never was to be, and
Andy repaired it himself. 10. You are a good student.
The last time I heard from him was on
Wednesday, June 29th. “Thanks for your You watch well and learn quickly. You can get answers
help, because they just delivered and to your questions.
installed my new refrigerator!”
It is no doubt true, just like their advertising, I possessed, or Elaine did, nine out of ten of these
“D.R. Horton is the builder that other build- qualifications, though we had to work at number two. It cost
ers talk about.” I just wonder what they are us dearly that I was utterly incapable of number one. If you
saying...
© Times-Standard – Eureka,CA lack one or more of these, perhaps you can hire someone to
compensate. In my case, an independent inspector would have
been a great help. See Chapter 14.

Chapter 2: Learn The Wealth-Building Secret
Readers Say
“I was a plumber
for 21 years. I’m
going to build
a house for
People in Construction Know the Secret $250,000 and
the one I saw built
to the same plans
W
e’ve all heard of “inside information” and “insider trading”. In build- on a lake sold for
ing homes, industry people have the “inside track” on a wealth-building $1.2 million.”
David D.
secret, the building of houses for themselves. Probably half of all owner- Lilburn, GA
builders are construction people. For them, owner-building is something of a side
benefit to their profession. But you shouldn’t be excluded from the privilege if you Sources Say
The Well-Built
aren’t a construction person. House has a
good section on
The average American’s net worth is equal to about four times their annual choosing a lot.
(See page 263)
compensation. Thus, if you make $75,000 a year, you would hope to have a net worth
of $300,000. And many people toil their entire lifetimes to develop it. But people in Sources Say
construction often have homes that contribute that much by themselves to their net Your New House
lists 20 questions
worth. to ask before
buying a piece of
One of the general contractors I interviewed was an executive in a large con- land such as, ‘Are
there any impact
struction company. He owner-built his $800,000 house with help from company fees?’
tradesmen for $550,000. It was finished in four months. He added $250,000 to his (See page 263)
wealth practically overnight. This approximates the net worth that many of us work
for over our entire lifetimes. For him it was an employment perk.

14 • Chapter 2: Learn The Wealth-Building Secret
Sources Say
Better Houses, One of the subs on my house built his own 4,500 square foot house for $110,000
Better Living has plus land, making a total cost of about $150,000. It took less than six months. Yet that
a good chapter
on lots. house has a valuation over $315,000. In six months, he added more than $165,000 to
(See page 263) his net worth!
Readers Say
Mark, I enjoy the
website and learn
a lot from read-
Free and Clear Step-Up Strategy
ing it. The book
inspired me to As an owner-builder, you may not feel very rich when you take on the
do my first house increased mortgage payment that comes with your larger home. In fact, you may not
two years ago.
Success on the see the financial effects until you step up to a house with a reduced mortgage pay-
first house inspired ment or no payment at all, what I call the Free and Clear Step-up Strategy.
a step-up plan that
is still evolving.
Custom Home Step-Up Strategy: Shrinking Payment
I purchased G.C.’s G.C.-Based Borrowed O-B Current
another lot in just
as we finished the Cumulative Estimate Monthly Net Cost to Monthly Two-Year Value of 1st
first house. Since House O-B Equity with Land Payment Owner-Build Payment Sale Price House
then, I have split First $100,000 $445,000 $2,109 $224,250 $1,371 $489,500 $489,500
the lot and built on
both halves. We Second $265,250 $592,295 $2,710 $42,743 $299 $651,525 $538,450
just moved into
Third $608,781 $788,345 $4,362 $0 $0 $867,179 $592,295
one of the houses
and I sold the Equity
other house to my after 6 yrs.: $867,179 $186,718
friend and helped
• Assumptions: 5% annual appreciation, 5% inflation in constr. costs; 7% APR interest-only mortgage, 35% owner-
him owner-build. builder construction savings, 10% increase in successive house scale, self-sold.
• First house example is a 3,000 square foot home at $115 per foot with paid-for land valued at $100,000.
The strategy was
effective and I The table above dramatically illustrates the financial divergence between the
hope to repeat it
again on the two- O-B and the typical custom home buyer. By the end of the sixth year in this example,
year cycle. the owner-builder has more than quadrupled the home equity of the GC customer.
Here is how it
worked: LOT 1: I had heard it said that you can own your home free and clear if you build
$96K + Construc- seven of them, over 14 years. South Carolina owner-builder Alex Acree says that you
tion Cost $294K can do it in three builds. My calculations say that the average owner-builder can do
= $390K. House
1: Sold FSBO at it in three builds over six years under the assumptions shown above. The analysis
$700K two years assumes that the owner-builder starts with the land paid for or perhaps proceeds
later. from a previous home — $100,000 in initial equity. It assumes that the initial owner-
Then bought new built home is a 3,000 square foot custom home with a market value of $115 per square
2.5-acre lot at foot. In this example, the O-B takes advantage of increasing equity by making a
$225K Owner- smaller monthly payment on the second house.
Financed
Next year split off The owner-builder in the next scenario could own a home free and clear
1.25 acres and after two builds in four years through the simple expedient of keeping the monthly
sold for $125K
mortgage payment level. This means that even though the required mortgage pay-
This year built on ment shrinks on the second house, the owner-builder intentionally makes the same
remaining 1.25 monthly payment. The non-required portion of the level payment goes to reduce
acres ($100K cost
basis) + $335 loan principal each month. This builds equity faster, and in the example below, the
construction cost = second home is owned free and clear after two years of payments on the small resid-
$435K ual balance of $37,943:

Chapter 2: Learn The Wealth-Building Secret • 15
Moved into house

Custom Home Step-Up Strategy: Level Payment #2 appraised at
$750K
G.C.’s G.C.-Based Borrowed O-B Current
Cumulative Estimate Monthly Net Cost to Monthly Two-Year Value of 1st Net Gain so far
House O-B Equity with Land Payment Owner-Build Payment Sale Price House $615K.
First $100,000 $445,000 $2,109 $224,250 $1,626 $489,500 $489,500
This is not too
Second $270,050 $592,295 $2,673 $37,943 $1,626 $651,525 $538,450 bad for working
a part-time job
Third $646,221 $788,345 $3,766 $0 $0 $867,179 $592,295
for two years.
Equity Rapid real estate
after 6 yrs.: $906,203 $195,118 appreciation
was also a factor
• Assumptions: 5% appreciation, 5% inflation in constr. costs, 7% APR conventional mortgage, 35% O-B construc-
tion savings, 10% increase in house scale, self-sold.
over the last two
• First house example is a 3,000 square foot home at $115 per foot with paid-for land valued at $100,000. years, of course.
This is a factor
Here the owner-builder approaches five times the house equity of the GC that cannot be
counted on again,
customer after six years, through continuing to bank the level payment amount after though. Given
owning free and clear. these results, I am
shopping for land
again and looking
In my case, I will achieve a free and clear home in two builds because house for the next O-B
and land prices went up dramatically fast at the right time for me, because I had project.
a low mortgage rate, because I saved 45% on construction of the first house, and
The timetable
because I have waited longer than two years between builds. It’s not just me — over for each house
the past five to ten years in the U.S., conditions have been very favorable against these has been pretty
assumptions, and the average O-B in our survey anticipates being free and clear in a similar. Finding the
land, defining the
stunning 2.25 builds. project, doing as
much engineering
Author Marian Robinson says: “Owning your own home free and clear — and designing
as possible and
that’s the key to all the rest. Once you have your snug harbor, your safe base, all else closing escrow
comes easy. You can tell the rest of the world to go to hell if you want, once you own has taken about
the roof over your head.” 90 days per
project. Permit-
ting has taken 12
More than half of the owner-builders I studied have built or plan to build to 14 months!!!
more than once. As one wit put it, some believe that “You have to build two houses Construction to
the C of O stage
to get one right.” Some O-B’s are motivated by the “hands-on” satisfaction of trying has taken six to
new trades or by the pleasure of negotiating better deals. I found many ideas build- seven months,
ing my first one that I am anxious to include in our next house. My net worth rose primarily working
on the weekends
dramatically during this project, and that becomes a major motivation to repeat. with 10 to 12
person crews
One owner-builder who is a commercial freight pilot contributed this case made up primarily
of moonlighting
study example of the financial effects of stepping up: subcontractor staff.
Then landscaping
and swimming
Case History pool construction
add another three
to four months
Two pilots, one with a commercial airline, one with freight. “A” makes $200,000 of less intense
a year. “B” makes $100,000. Four years ago both bought houses. Both paid work, bringing the
$190,000. “A” started paying his mortgage down, owes $150,000 and his house beginning to end
timeline to nearly
is worth $200,000. His equity is $50,000. “B” sold the $190,000 house for two years.
$300,000 in a stronger market. He then built a $300,000 house for a mortgage
of $205,000. That house is now worth $375,000. His equity is $170,000 — more Again thanks for
the excellent book

which helped me than three times what “A” has. He lives in a nicer neighborhood now with half the
to overcome my salary that “A” earns. And he has something for retirement.
reservations in get-
ting started on the
journey. Owning your home free and clear knocks out more than a third of your
Michael Wendt- family budget, while potentially improving your level of home comfort and utility.
land, P.E. The free and clear strategy reduces your need for salary. For instance, if you have
O-B Connections a gross salary of $100,000, your income after taxes is $60,000. Your discretionary
We are moving income after taxes and housing is $27,000:
along quite nicely
these days. We Percent of Gross Income
have drywall in Gross Salary:
and have the $100,000 100%
installation of floor- Net Income: $60,000 60%
ing and cabinets
scheduled. The Housing Costs: $33,000 33%
interior doors just
came in as well Discretionary Income: $27,000 27%
and are being pre-
hung right now. I Turning this on it’s head, you would obviate the need for $30,000 if you elim-
think I see the end inated mortgage costs from your budget. (You still have to pay property taxes and
in sight, although
it is still a couple
insurance.) Your discretionary income is still $27,000, but you can live on a much
of months down lower salary:
the road. Despite
all the trials and Percent of Gross Income
tribulations, we
enjoyed doing Housing Costs: $3,000 7%
this so much that Discretionary Income: $27,000 63%
we have already
purchased another Needed Income: $30,000 70%
property that we
will demolish and Needed Salary: $43,000 100%
rebuild as soon
as we are finished This means that if you eliminated $30,000 in annual housing costs, you
with our current could eliminate $57,000 in needed salary.
O-B.
Readers Say
When we bought
our house, it was
Owner-Builder Exclusive
in the framing
stage, so my Due to the U. S. Taxpayer Relief Act, U.S. owner-builders are in a unique
wife and I did position to profit from their homes. The law allows you to sell a home every two years
all the picking of
wallpaper, carpet, with no tax consequences (unless your profits exceed $500,000 for a married couple).
lighting and In actual practice, only owner-builders can sell a home profitably every two years. An
paint. I see just ordinary homeowner who buys a custom home usually does not get enough appre-
from that little bit
how much work ciation in two years to profit from selling the house (at 5% appreciation per year,
we did for the the 25-year historical U.S. average.) The “in-and-out costs” of Realtor commissions,
builder, while we mortgage origination fees and closing costs consume the profit of two years of house
paid him dearly
for the privilege. appreciation for typical homeowners.
I have worked
construction while This leaves the owner-builder in a unique position to profit from the provi-
growing up, but I
didn’t realize how sions of the Tax Law. Because O-B equity stems from building at a reduced cost,
much opportunity owner-builders have a handsome profit to reap, tax-free, as often as every two years.
there was to save If you build a $450,000 house at a savings of $125,000 every two years, you can enjoy
on the price of a
home.” a tax-free bonanza of $65,000 each year until the law changes. Since the $65,000 is
Kevin T. tax-free, it amounts to the equivalent of $110,000 of ordinary taxable income.
Lawton, OK

Retirement Plan Readers Say

The work you’re
doing is abso-
This tax benefit builds your net worth along the way at a dramatic pace. In an lutely incredible. I
economy where less than a quarter of retirees are financially independent, you have found your info on
lumber discounts.
three very pleasant options during retirement. If we had people
who had time to
shop around for
Option One: their materials
they’d save more
According to the banking industry, Social Security and your company pen- money than my
discounts can
sion or 401K will typically provide less than two-thirds of the income you’ll need produce even as
for retirement. Since people spend about a third of their income on housing, if you a contractor. The
have your home paid off via your step-up plan, you only need two-thirds as much for techniques you
mention I never
living expenses. You can retire without worries on Social Security and your pension get because I
or savings. You stay in the dream home you built for yourself. don’t have time to
go dig for them.
Everyone who
Option Two: does spec build-
ing like me would
like to know the
After you own a home free and clear, you can continue to build and sell techniques of
residences as often as every two years and bank the tax-free profits. After about four saving money in
step-up builds over the course of a lifetime, with the value of the home you live in, building.
Larry T.
and with normal inflation, you will have amassed a net worth over one million dol- Driggs, ID
lars from the process. You are free to move into smaller retirement quarters or into a
facility providing residential care and live off your wealth. Readers Say
I built a fence, a
historic design,
Option Three: for $12,000 and
a lady copied it,
with a contractor,
Through a financial vehicle known as a “reverse mortgage” you could stay in and it cost her
the house you own free and clear and tap the value of your dream home to lavishly $50,000. Hys-
terical! I get great
finance your twilight years. You draw payments monthly against the equity in your satisfaction from
home until the end of your life. saving money.
Anyone can
spend money, but
it’s a lot tougher to
“Open Up Your Veins” save it.
Karen C.
Kennewick, WA
Money saved on the construction of your house is different and financially
more powerful than money you save buying groceries or insurance, or even paying
Forums
taxes. Your house is an appreciating asset, much like a savings account, but even I see that you are
better. A bank won’t credit you with $450 if you only deposit $350 into your account. using Countrywide
But you can build a $450,000 house for $350,000 and have the market count it as for your mort-
gage...do they
$450,000. You can sell it for that much and keep the difference. do owner-builder
loans? If so, what
Money you save on building your house goes directly to your net worth. It do they require?
Thanks.
reminds me of the buffet at a recent Chamber of Commerce reception I attended. Brenda in Eustis,
I chided the caterer on the high cholesterol in the hors d’oeuvres including bacon- FL
wrapped chicken livers skewered with toothpicks. She answered, “Yup, you might as
They do require a
well open up your veins and mainline the stuff.” In a different way, you get to main- GC or at least a
line money right to your net worth when you build a house. Everything you save goes GC to oversee the
direct to net worth. No processing, no withholding, no deductions. project. I have a

GC that is doing
my foundation If the accepted market value for a custom home at your level of finish is $150
and excavation per square foot, and you build it for $100 a foot or for $90 a foot, you get to keep the
and a few other
little things, and difference. Every bargain you find, every price concession, every savings adds directly
so I just set up a to your wealth.
contract with him
to help me out
on the project on
hourly basis. He
was willing to sign
D.S.D.E.
off on my plans
and budget; I Benjamin Franklin made famous the expression, “A penny saved is a penny
did get my own earned.” He said this about 150 years before we had income taxes in our country. I
builders risk and
liability insurance, say now that “a dime saved is a dollar earned”. That is, you typically have to earn a
though. dollar to set aside ten cents. The savings rate in our country is well below ten percent,
Viler in Westmin- thus when an American earns a dollar, he will save a dime, or less, of it. The rest goes
ster, CO
to payroll deductions, taxes, and consumption.
A GC should be
responsible for the When I built my house, I discovered that my humble efforts at contracting
whole project, not
just your founda- were far more valuable than my professional salary as a planning consultant. If I
tion. Watch out earned $100,000 in salary, $10,000 or less, maybe much less, would make its way into
for this...when you savings. But when I saved $180,000 on my house, it all went into savings, into my net
have an individual
subcontractor sign worth.
off as a GC for
your project, you To have saved that much otherwise, I would have had to earn ten times that
can end up in
trouble. Michigan amount, or $1,800,000 in salary, which would have taken many years. I call this prin-
has similar laws. If ciple “D.S.D.E.” or “a Dime Saved is a Dollar Earned”. Every dime I save building my
you run into prob- house would be the savings equivalent of ten times that much in salary.
lems with your
project this could
come back to Suppose you are making a mortgage payment of $1,500. How much goes to
haunt you. I tried equity? On the mortgage that I held after building, our monthly payment for prin-
to get someone to
sign off as my GC cipal and interest was $1,500, and only $80 went to equity, about five percent. But
prior to doing my the dollars you save building your house go straight to equity — 100%. Say you are
own project and building a $300,000 house, and the lumber is $60,000. If you find a way to get it for
my lawyer strongly
advised against it. $45,000, your savings of $15,000 goes straight to equity. It “should” cost $60,000;
Something about but it costs $45,000. The savings reduce your cost but don’t change the value of your
bank fraud and house.
problems with
building permits/
inspections. This book will present this special style of economic thinking and how it cre-
Brad in MI ates a new view of money for you. DSDE thinking (pronounced “dazdee”) changes
Many banks allow the way you see both construction savings and costs on your home. If you can save
General Contrac- the $15,000 on lumber, you value that savings as much as you value $150,000 of
tors to act as site salary. If you made $150,000 a year it would take you a full year of work to save or set
supervisors for
owner-builders. aside $15,000. If you can save $15,000 on lumber through a few hours of research and
IndyMac, Wells effort, you have perhaps saved the equivalent of twelve months of striving on a good
Fargo, Capital salary.
City, Countrywide
and Mid-Country
to name a few. When you are into DSDE thinking, you multiply any savings times ten to see
There is no bank the equivalent in units of salaried work. If you save $100 on a ceiling fan, was it worth
fraud involved.
the hassle? If you consider it to be the equivalent of $1,000 in salary — ten times the

100 dollars — and it only took you an hour or two to find the savings, it was well In most states an
worth it. It may take you two days or a week to earn $1,000 at your employment. O-B is allowed
to act as their
own contractor.
When you are into DSDE thinking, you multiply any cost times ten when Sometimes a bank
you consider it. What if trash hauling service adds $1,000 to my construction cost? may require a
That would reduce the equity on my house by $1,000. It would take ten times the GC to look over
things. Depending
$1,000 or the equivalent of $10,000 of salaried employment to set aside that amount. on the contract the
$10,000 in salary could be weeks or months of work. And I can haul away the trash GC is not respon-
in a day or two. It would be well worth it to save that expense. sible for anything,
other than what
he does. All the
At 45% of the contractor-estimated cost of my house, general contracting GC is doing is
would have cost me $180,000 (contractor profit and overhead). The $180,000 cost making sure the
O-B is handling
would have done nothing to change the value of my house. The house was worth things properly
$450,000 in our market without a contractor, and it would have been worth $450,000 and giving advice
with a contractor. The $180,000 I saved on contractor costs went straight to equity. I if needed. This
happens every
realized that I would have had to earn the DSDE equivalent of $1,800,000 to replace day in Florida and
that equity otherwise. That made me think twice about using a contractor. Especially other states. Many
when in less than a year’s time I eliminated that cost. And you can, too. homes are built
this way.
Phil in Gainesville,
Turn the DSDE principle around for a moment. Suppose you pay $150,000 FL
for contractor costs on your house. Say it increases the cost of construction from Readers Say
$350,000 to $500,000. You’ve used up your cash for the down payment, so naturally, We are going to
you mortgage the amount to cover it. Your mortgage payments on the additional meet two owner-
amount add $1,000 to your monthly payment on the house. Since bankers multi- builders this week
who saved over
ply monthly payments by three or more to determine qualifying salary, you have to $100,000 each
make an extra $3,000 a month to qualify – an extra $36,000 per year. Over a 30-year on their houses,
mortgage you must make an extra $1,000,000 to cover an extra $150,000 borrowed. and we are
bringing a tape
recorder for each
session.
Rock Star Wages Kayla & Troy L.
Provo, UT
It is worth being conscientious in the management of your construction. You Readers Say
We built a 7,000
are being paid handsomely to do it — DSDE thinking means that savings of $150,000 sq. foot home,
equate to earnings of a million and a half dollars — rock star wages. full brick, beauti-
ful detailing, had
excellent people,
For the time I was building my house, I made rock star wages. Over a ten- always on time,
month period, Elaine and I put in 3,000 hours of effort. A year and a half’s work for very helpful. Our
one person. We saved more than $180,000 or about $60 for every hour we spent, plumber is going
to build and wants
whether planning, shopping, or sweeping the concrete. The DSDE equivalent is $600 to imitate us.
per hour in salary. In a normal work year, someone making $600 an hour will gross Columns, arches
$1,200,000 — about what Donny Osmond’s salary was in his pop music days. Ironi- throughout, a fabu-
lous home with
cally, Donny and another musical performing star (less famous) live in the neighbor- 60 windows and
hood we now enjoy. glass doors. All
for $83 a square
foot.”
Why can I afford a house like these megastars? For a brief shining moment, Joan L.
I made the equivalent of rock star wages, in savings on my own house. And you can, West Mountain,
too. UT

Readers Say Guerilla Economics

We went up to look at our chosen lot last
Saturday, and found a car parked nearby.
We asked him what he was doing, and Take a moment to consider the widely disseminated
he said he was in line for the lot sale. I told myths and propaganda about owner-building described in
him that the lots were going on sale next
Saturday. He said he knew, but he was in
Chapter 1. This is what you are up against. No one will simply
line for it. We parked our car behind him provide you with savings, although many will deprive you of
and will be in line for a week. Soon there savings on your project in the blink of an eye. The constant
were six cars and several RV’s. Sometimes it
takes that kind of thing to get your lot when
struggle over those savings is something like a war. And as in
land is scarce.” war, the first casualty is the truth.
Jim & Larene D.
Salt Lake City, UT
Your truth is that you can save an amazing amount
Sources Say of money on the construction of your custom home and that
“The tools you need to be your own contrac- those savings go straight to your net worth. (The average O-B
tor are in this book...The payoff is two-fold.
First you save money…you can save many
in our survey saved about $180,000 on their house.) You must
thousands of dollars by being your own con- hold on to this knowledge in the face of many naysayers and
tractor. Second, you earn bragging rights. much resistance. If you do you will prevail.
You can say, ‘I built this home.’ And even if
you had help, you’ll be right!”
from The Complete Idiot’s Guide to Building Your attitude may seem like a guerilla or rebel insur-
Your Own Home gent one to the opposition. Because it is. You need to stretch a
(See page 263)
dollar to accomplish your goal, and you can. You may also need
to temporarily forego some income, and it’s worth it.
A lot of people are what independent inspector Joe

Stark calls “checkbook rich, and savings account poor”. They
can’t owner-build because they don’t have the patience and dis-
cipline to come up with the land cost. But your reward for your
guerilla savings efforts and attitude are a superior home and a
galloping net worth.

Chapter 3: General Contractors Aren’t
Readers Say
Generals here
aren’t real anxious
What You Think They Are to work on a fixed
fee basis. I got
disgusted with
what you had to
pay, and with the
Contractor Games lack of control.
Their propaganda
is: ‘You’ll mess it
Perpetuating Myths up and it’ll cost
you more to fix
later.’
Y
ou call a general contractor for a bid on your project and he shows up in a Dan Q.
nice pickup truck wearing jeans and a work shirt and work boots. Perhaps he’s Overland Park, KS
carrying a clipboard or a laptop. The impression is that of a tradesman, and of Readers Say
technical expertise. The contractor will reinforce some or all of the Myths described We built a home
in Chapter 1. Most non-construction people would hesitate to question the word of for $185,000
four years ago,
this “expert”. recently appraised
for $365,000.
The big myth is that you can’t do without this “technical expertise”. It’s a Joe & Connie W.
Olathe, KS
specialized field, and you need an experienced specialist. But the work of a contrac-
tor is to “contract”, that is to hire and manage independent craftsmen, known as
subcontractors. His work is management work, much like the work of any of us who
have ever run a household with its myriad expenditures and activities.

22 • Chapter 3: General Contractors Aren't What You Think They Are
Forums Almost any independent construction inspector, (usually a retired contrac-

I am just starting tor) has equivalent knowledge of the process and the details as does the contractor
my first project, so before you. They are paid as consultants, and can advise in detail on custom home
I am working with
my prime, who construction for fees of less than $1,200.
has a line item on
his bid reading
“Builder OH and Scare Tactics
P”; does anyone
know what that is?
Paul in Marina,
Relying on the impression of exclusive expertise, a general contractor may
CA play on the fears of prospective homeowners. An illustration comes from the recent
text for general contractors, Building Contractor by R. Dodge Woodson:
Overhead and
Profit?
Kenneth in Lees “The Fear Factor Can Sell Jobs”
Summit, MO
Overhead and
If you prepare yourself with stories to tell, you can increase your in-home sales.
profit. These can People are often nervous about the dependability, ability, and performance of
add up to 20 per- contractors. This nervousness stems from fear created by the media. When people
cent or more. But
at least this guy
read a news story about how a homeowner was cheated out of money by an
is being honest unscrupulous contractor, they become concerned. This type of news can hurt busi-
about it. ness for contractors, but it can also be your ace in the hole.
Jeff in Provo, UT
It is in fact Once you have developed a portfolio of contracting-related horror stories, you
overhead and can use the fear factor to sell more jobs. People generally assume you wouldn’t be
profit, and that is
normally 15-20%.
educating them in the risks that are present with contractors if you were one of the
It includes the cost bad guys. Automatically, when you begin warning the consumer, you are building
of your builders the image of one of the good guys.
insurances, liabil-
ity, taxes, cost of
having a license, After telling your stories, tell the customer how you operate to put their mind at
guaranteeing the ease. By showing the consumer what could happen, and why it won’t if they work
work performed
(generally 2 years
with you, you’re on your way to signing a new deal.
on workman-
ship), and then What does that tell you?
profit margin for
running a busi-
ness – after all if
he isn’t making
Pursuing Self-Interest
money, what is he
working for? It is a The danger is that you believe that the contractor is there to protect your
great advantage
to see it up front,
interests. In reality, the contractor is set up to make sure that his own interests are
then you know if met over the course of your project.
he is jerking you
around on the
other items or not.
In the same book, Building Contractor, out of 20 chapters, only one deals with
– Good luck – schedule and budget. In fact, almost nothing in the book deals with your concerns.
Rene in Tucson, If you count the Customer Relations chapter, only two of the chapters, or ten per-
AZ
cent of the book pertain to you. Lots of them deal with taxes, insurance and retire-
ment plans, image, sales, marketing, and pricing. There’s lots to learn about handling
money, employees, vehicles, and your office location, but you don’t care about that.
You care about subs, schedule, and budget.

Chapter 3: General Contractors Aren't What You Think They Are • 23
Offering Self-Serving Agreements Readers Say

I got one house
package estimate,
The typical bid-price construction contract is an example of the orientation (lumber, doors,
general contractors have to their self-interests. The contract sets a price for your con- windows, and
trim) and was
struction. You agree to pay so much for the house no matter what. It gives total con- going to go with
trol to the contractor. He can procure materials and labor at a savings, and keep the it, then went to
savings. He can substitute cheaper materials or cut corners on craftsmanship and is Menards, and
had them price
paid to do so by keeping the difference. If you want something better, you generally the same takeoff
have to pay extra. for a savings of
$30,000. The
original contractor
Most residential construction contracts are fixed-bid agreements. The gen- and lumberyard
eral contractors I interviewed used them 90% of the time in preference to the little were surly about
used “Cost-plus” agreements, which are less profitable to them. But cost-plus agree- it.
Yvonne B.
ments are self-serving too. These are agreements that require you to pay the “cost” Caroline, WI
of construction and give the general a fee or commission of, say, ten percent on the
whole amount. It’s self-serving, because the contractor controls what the costs are, Readers Say
I have a contrac-
and the higher they are, the more fee you pay. tor who actually
had it in the
With cost-plus, it is hard to pin down cost. In many cases where the contrac- contract to finish
by 18 Dec. of
tor uses an outside source for material or labor, he receives the invoice, tacks some- last year and he
thing on for his overhead and sends you a separate billing. When the contractor’s is not 1/4 done
own forces do work, he always adds in for overhead before sending you the invoice. yet. Talk about
putting eggs in
It is common, for instance, to multiply wages paid to workers by 2.75 before listing baskets, he openly
“labor costs” on your invoice. At the end, the contractor is allowed to apply his profit admitted that he
to the whole amount, including the extra overhead added to each item. You are not spent my money
on another project
permitted to scrutinize the detailed charges, nor can you control what he calls over- and doesn’t have
head. the money to
buy supplies for
my project now,
Enforcing Package Buying I gave him a
second chance
and he blew
As an owner-builder, you get to buy cafeteria-style, selecting your materials that. He’s actually
and labor from the best source in each case. Contractors deprive you of this privilege. putting my eggs
from my chickens
For instance, they will use their own cement crew or framing crew. You have no idea in someone else’s
if the prices charged are competitive. Nor is there an assurance of quality. You take basket, probably
the service because it is part of the package. You have some comparison in the begin- his.
Ray P.
ning by getting bids from multiple general contractors. But once the deal is signed, Aurora, CO
you are captive, and any extras are at the price the contractor quotes.
Readers Say
Really all you
Lowball and Change Order need to know
is how to make
phone calls. Ask:
Some contractors take advantage of this situation by quoting a low price ini- ‘Will you give me
tially and claiming later that certain things were not included. For example, you may contractor prices?’
They say, ‘Sure’”.
think you’ve paid for oak trim, and you visit the site to discover that the carpenters Lynn H.
are putting up paint-grade economy trim. You object and a price is quoted to you for Tremonton, UT
the “upgrade”. Time is short, the carpenters are waiting, and you agree without any
chance to check out price and availability. Such contractors are free to follow the old
rule of crooked auto mechanics: “Double the usual price, and if the customer doesn’t
flinch, go with it.”

Journal Exploit Your Ignorance

Met with interior
designer to get
opinions on At an early point in my construction project, I got cold feet because I couldn’t
layout, traffic answer some of the questions posed by the subs. I began belatedly to look for some
flow, furniture on-site supervision. My designer told me that the going rate in our market was $3,000
placement, etc.
Expected to spend – $4,000 for assistance from a general contractor, including use of the general’s license
about two hours and some of his subs, answering questions, and providing some on-site supervision.
with her, but I put the word out for help, and a wily general contractor called me and offered the
barely made it an
hour. Didn’t really assistance for nearly $1,200 a week. That would have been over $30,000 for a six-
have too much to month project, 15% of my budget. I felt desperate, but I wasn’t ignorant. I found the
offer beyond what needed answers elsewhere for no charge.
we had already
thought of and
she didn’t have
any great solutions Cuts Corners
to somewhat
problem areas. Inspectors have told me many stories about corners that contractors have cut
From what I gather
it really comes to improve their profit. Some examples: plumbing running uphill, roofs without base
down to personal felts, gutters without flashing, reduced beam sizes, bowed walls, foundation walls
preference and two inches thick in spots, or poured five inches thick throughout instead of six, short
what issues one
can or cannot live roof shingles extended to provide minimal coverage, inadequate roof bracing, collar
with. Originally I ties missing on every other rafter or omitted completely.
was looking for-
ward to working
with a designer, Are these shortcuts the fault of the general or the sub? Some work is done by
and I guess I just the general’s own forces, and he controls it directly. Other work is done by subs, but
expected a lot the general dictates what he will pay them, and he is responsible for their supervi-
more. Not worth
it! All in all I’m sion.
glad I met with
her, it just reas-
sured us that we
are on the right You’ll Shop Better
track trying to
really think things Contractors are poor shoppers. Witness my construction advisor, a general
through in this
“planning” stage. contractor who has built hundreds of homes. He offered me the lumber price men-
Jamie & I need tioned in Chapter 1. With a little checking, I was able to beat his price by $6,000 in a
to come together week’s time. He couldn’t believe that his prices at the lumberyard were high. He had
and tweak a few
things on the plans built over 200 homes with that lumberyard, and had never “shopped” their prices
and back to the against other lumberyards.
architect we go!
In the meantime, The contractors I interviewed had few or no ideas on saving money, other
I’m collecting than to speed up the project, which they all mentioned. That doesn’t save you much
lots of pictures money — some on interest. It makes them money because they earn their fee over a
of ideas on all
sorts of things shorter time, and can go earn another fee from the next customer sooner.
and organizing in
a notebook. I’m The contractor looks at his fee based on time to complete:
trying to be much
more organized.
Continuing to
learn a lot from
Example: Overall Fee of $100,000
this forum, and Months to Complete: Twelve Nine Six Five Four
branching off
to do our own Fee Earned Per Month: $8,333 $11,111 $16,666 $20,000 $25,000
research as well.

You will shop better because you are not in a hurry. You will shop better We need to
because you will start long before you break ground. You will shop better because it’s decide on the
your money. home structure
itself. So far, I
really like the ALL
WALL system but
You’ll Be Better Organized need to gather
more info. Hope
to decide soon!
A recent NAHB survey revealed that only 56% of builders used a computer Kristy in St. Lucie,
FL
for estimating project costs. This is an indication of how disorganized, how “seat of
the pants” general contractors are. Spreadsheet budgeting is a very valuable tech- Journal
nique that we will teach you in Chapter 8. It is easy and fun to do. We estimate that it Here’s the
will save you five percent on your overall project, when used as a tracking device. Monday morning
scoop:
The pad is done
If you have kept your own ideas about your custom home in your head, or in and invoice is in
a dream home notebook, you are prepared to track details you expect. Since many hand, and I think
the well is about
bills will be paid out of your own checking or credit card account, you already have done too. There’s
in place a very personal and controlled system for financial management. no need to write a
bunch of commen-
tary, the below list
If you can keep a file of bids for your job, along with product literature, you sums up our goals
are already far ahead of what a general contractor will do. The list below contains for the week.
some suggestions from other owner-builders to get organized. We will explore most
of these ideas in more detail in later chapters: To do (in order):
Find lien release
(C)
Mail IndyMac
Owner-Builder Ideas to “Get Organized” interest payment
(C)
Pay fill invoice (C)
❍ develop written “flow chart” schedule of construction Pay well invoice
❍ maintain loose-leaf binders for bids from subs (C)
Get compaction
❍ fill a box with hanging files for product literature test (J)
Schedule survey-
❍ keep a binder for insurance work ors (J)
❍ use a box for samples of wall and floor coverings, swatches and finishes As soon as permit
comes through
❍ use a spreadsheet budget, make sure is complete (please, O-B
gods, please):
❍ get all prices before starting Call foundation
❍ keep a business card reference file of subs and contacts people (J)
Call electrician (J)
❍ keep a binder of subs you hear about, both good and bad Cara & Jason in
Orlando, FL
❍ know your running tally of expenses at all times
❍ know what week of your schedule you are on Readers Say
I’m building
❍ interview contractors and take notes 4,700 sq. feet on
❍ keep a phone list of contacts a golf course, and
I have a full-time
❍ file all invoices and attach copy of check and lien waiver secretary who
helps me to do
❍ list all items you must purchase, record price comparisons the bidding and
❍ make up a file box for clippings from magazines or brochures sourcing.”
Jim K.
❍ separate bank account or Quicken account for EVERY penny you spend Elk Grove Village,
IL
❍ keep a large calendar to track appointments and trades, etc.

Readers Say You’ll Give it More Attention

The Owner-Builder
Book was right
about setting up Building inspector Jim Wright told me “Contractors usually call subs, and
the proper files, get started, and then are somewhere else right away. In my opinion they probably
knowing where to
go for things, and
spend one to two hours a week on site.”
staying organized.
Checking refer- I asked generals how much time they spend on each job and found they were
ences. I became
the form queen.
a little evasive about this. Most tell you about how they are on site “all the time”. One
We are building general contractor building custom homes admitted that his superintendents handle
now. We didn’t a dozen jobs each at a time. In a 40-hour week, this means they could be at any given
track a lot of it on
computer, but I
job no more than four hours a week. Allowing for travel time, office meetings, and
carry a notebook paperwork, I would guess the actual on-site time is two hours a week per project.
with me. I write
down the tasks
and cross them
Even at that low level, inspector Joe Stark complained to me that the super-
off, and go back intendents in the industry today tend to be “kids”. “They may know how to order, or
through periodi- schedule, but they don’t know quality.” This is not comforting when it’s your house.
cally to see that
things are done. I
keep my conversa- It is indisputable that you will spend more time on your job than a contractor
tion notes there would. But the less costly the house the more true it is. You might get a general who
and can find
things later that
builds three a year to be on site an hour a day, or about 100 hours overall. But the
way. builder who handles 50 a year will probably be there an hour or two a week, maybe
Kathi D. 35 hours altogether. As an owner-builder, I was at my job site nearly 2,000 hours, and
Tucson, AZ
Elaine was there about 500. This is about 25 times as much attention as a general can
Readers Say give.
The general con-
tractor is simply a
middleman. The time they are there doing their own trade work doesn’t count. How can
Jerry B. they supervise themselves? If providing more care would cost them money, they have
Tucson, AZ a conflict of interest deciding whether to provide that additional care. Something
Readers Say about being watched all day long makes people provide more care. You do the watch-
We’ve thoroughly ing and get a better house.
enjoyed owner-
building. We’ve
saved about You will also give more attention to quality. The builders I interviewed had a
$70,000 on a difficult time describing quality. Mostly they said it was finishing quickly. Good and
$220,000 house quickly seldom meet, and quickly usually helps their bottom line, not your quality.
at contractor
price.
Brenda & David
R.
Caneyville, KY
You’ll Keep Your Savings
Forums The contractor isn’t motivated to save your money, only to complete the job
We are set to faster. He will let you pay for any overhead expense he thinks is justified. In my initial
break ground on budget to build the house, I allocated $625 for cell phone service. When my budget
our new home in
Draper, Utah as
began to get tight, I decided to sacrifice the service to save money. I carried a roll of
owner-builders quarters in my car for use at the pay phone at the nearest gas station. I spent less than
and I read The $25 for phone calls over the remainder of the project. Would a builder deny him-
Owner-Builder
Book to get
self the use of his cell phone to save you money? Most likely not, and every general
new ideas and charges this expense and many others to his customers in the form of overhead.
strategies. I work
for one of Utah’s
largest homebuild-
The contractor isn’t paid to bargain-hunt, find less expensive but equal qual-
ity components, or find superior products at special prices for you. The contractor

is more loyal to himself and his subs than to the owner. He actually has a conflict of ers part-time as a
interest in trying to save you money. CPA and between
what I’ve learned
on the job and
Contractors routinely get promotional rewards or “Spiffs” from lumberyards from this book,
and other suppliers for spending their customers’ money there. These are prizes or we’ve decided to
incentives which may include clothing, tools, cash, or trips to Hawaii. Have you ever go for it and build
our dream home.
heard of a contractor passing on the benefit to his customers — even though the cus- We started plan-
tomers paid for it? ning last June, and
now are chomp-
ing at the bit to
break ground. I
How Much Can You Save? want to start a
diary of this build,
either here or
One way to look at potential savings when you eliminate the general contrac- somewhere on-line
tor is to look at how much contractors make. to share the stress
and the joy with
others doing the
I got a simplified look into contractor economics from a decking subcontrac- same thing.
tor who ran a crew but didn’t do any of the work himself. He estimated my deck at
A mini-background
$2,420 (current dollars) for labor only, as I was purchasing the materials separately. I on our home-to-
called him back and asked him to break down his bid. be: 6,800 s.f.
custom luxury
two-story w/walk-
Reluctantly, he told me that it was $1,125 for labor, $1,000 for overhead, and out basement and
$295 for profit. The labor was 60 work hours at $19. He paid them $10 an hour and all the bells and
charged them out at $19 per hour to cover payroll costs. What was the overhead? whistles, including
a pool! We are
“We’ll be on your job for parts of two weeks, and we only have two other jobs going cheating a bit at
on. My expenses and salary are $1,500 a week, so divided by three jobs, that’s $500 a the owner-builder
week. Somebody has to pay that. The profit we earn for managing your job.” thing since I am
using some subs
that my employer
This deck subcontractor resembled a general contractor in that he contracted uses and they
with others to do the work and he handled multiple jobs. On the face of it, it appears are giving me
a helluva deal
that his margin (overhead plus profit) was $1,295 or 53%. But it might be even more because of the
than that. volume that my
employer does
with them, but
I hired two carpenters at $19 per hour to build the deck and I provided since this is a
unskilled help. They finished the project in 20 work hours at a cost of $375. It is hard custom home (my
for me to imagine that an experienced crew that builds decks for a living would be employer builds
starter homes)
slower than two general purpose carpenters. True work hours would be 20 or less, not that has different
60. If you take my actual labor costs of $375 and compare them to the estimated costs requirements,
of $2,420 the margin for the contractor in this instance would be $2,045 or 84%! I have had to
branch out and
choose some subs
But it gets worse. A few years after finishing the Riverbottoms house, Elaine and suppliers
and I went to the JLC Live contractor show in Las Vegas and attended a seminar totally on my own,
which has been
called “Spreadsheet Estimating, Your Simple Solution”. The case study for the session fun.
was a standard redwood deck. With materials and labor, they managed to crank up
the cost for a 12x12 deck to $10,546. An 80% markup was used on materials and hard In bidding, I had
a LOT of flakes.
costs were overestimated on everything, just to be conservative. The total included I ‘lost’ about 6
$725 for tear off and disposal of the old deck, if any. I find it ironic that tearing out sets of plans to
an old deck would be nearly twice the labor that I paid for building a new deck. jerks who just
weren’t on top of
their game with
returning bids,

plans, etc. timely. Labor was charged out at $35 an hour, and the hours were way overestimated
But I did find some on each item. Then they still added in “administration” for the carpenter at one hour
gems in the rough for every eight labor hours, and still marked up the whole thing at the end. There
– subs that were
just willing to bend were two differences between their $10,546 deck and mine. Theirs was smaller by
over backwards about 100 square feet and it was out of redwood. Ours was a solid vinyl deck. Apples
to get this job and to apples comparison, my deck would be $1,625 labor and materials or $7.22 a foot vs.
use it as advertis-
ing. I am not a $68.20 a foot, factoring out tear off and disposal. In this case, compared to an actual
mean person measured project, the builder’s estimate amounted to an 89% margin.
either, which my
husband worried
would get me Two memorable quotes from the builders’ seminar:
walked over in
this process. But “You don’t need to tell the client about set-up. They don’t want to know they’re
I’ve been good at
bargaining, and paying you to travel and bring all the tools to the job, even though they expect you
my friendliness to do it.”
hopefully will be
evened out by the
fact that they all “God forbid the lead carpenter leaves his estimating printout on site and the
know who I work homeowner gets to see it.”
for and that I will
give them a bad
name in the busi-
ness on a HUGE
scale if they screw
When is Ten Percent Not Ten Percent?
me over as an
O-B. Usually general contractors claim to make “only ten percent profit” on
I am looking custom home construction. Yet, owner-builders report an average 35% savings. So
forward to sharing
this process with what gives? The builder makes something on everything else. He makes it on over-
other O-Bs and head on all labor, he makes it on material markups, trade markups, overcharging for
especially any work not bid out, and on general overhead.
Utah O-Bs with
who want to chat
local numbers on One contractor I interviewed told me he added overhead to materials and
bids. Our permit labor and then imposed profit on the entire amount. For example, on one job, lumber
is ready to be
pulled, the city was $25,000 but they billed it at $37,500. Framing labor was $19,000, but they billed it
called yesterday. at $31,250 for a total for framing of $68,750. Then they tacked on a ten percent profit
We have lined of $6,875. However, direct costs were only $44,000. The contractor charged $75,625,
up our surveyor
for March 7th, which is a difference of $31,625 or a 42% margin. But technically, his profit was only
and our excavator ten percent.
for March 8th. I
am meeting with
him tonight to A contractor from Indiana told me he makes 60% margin (overhead plus
discuss where I profit) on a custom home. Like other contractors, he probably tries to show no more
want all my utilities than ten percent profit each year so he doesn’t have to pay excess taxes. He may make
trenched in, what
he recommends, profits of 30% on a given job; but with the slow seasons of the year, and any expenses
etc. Now to pray he chooses, he only shows overall company profits of ten percent or less for the year.
for a WARM DRY
SPRING here in
Utah :) The great variable is overhead. This is what a contractor spends.
Laura (and Mike, If you make a healthy margin and want to pay less in tax, you spend more
my husband who
will really only money on your company. You may put in place a retirement plan for your full-time
sign checks, I am employees, life insurance for your key people, medical coverage, higher salaries for
the true general the partners, and any manner of personnel expense. But it doesn’t stop there. You
on this house!)
Laura in Sandy, may buy the biggest and best earth moving equipment, new expensive vehicles, build
UT

a bigger, better building, buy office computers, furnish- Congratulations on starting your new project. Mine
ings; almost anything under the sun could count as over- is almost finished, finally. Started the whole process
head. over a year ago. We have only had one weekend
off since then. We were working on all holidays
including Christmas. I can say we are all tired and
I had one general contractor executive tell me glad it’s done, with the exception of landscaping.
insistently that his company only made ten percent on Have fun and don’t make any vacation plans! :-)
their work. Then I asked him if the company had built a You will learn a lot about yourself & family and the
home for him. He admitted they had, at a cost of $120 a building process. I am looking for another lot this
foot. “And what would your company have charged for spring and will do a complete owner-build and
self-finance. A purely sale for profit box-type house!
that?” His answer, “$170 a foot.” Even though the com- Good luck and have fun with your project. I am
pany claimed to make only ten percent profit, they man- going to put together a picture book like others
aged to save 30% on the executive’s house. on-line here from start to finish once we move in
and get back for a long well-deserved vacation to
Hawaii!!!! Aloha.
The average for all the general contractors I sur- Dennis in AK
veyed was an overhead of 29% on residential projects and
Update: I pulled the final permit. It is laminated and
profit of 14%. They may only admit publicly to profits of at the front of my building binder. We don’t have to
ten percent, but that’s the tip of the iceberg. The overhead post permits here, we just have to keep them with
is something every customer must also pay, and that is our stamped prints and have them available for
inspections. The lot was cleared and the footprint
more than two times greater than profit, on average. of the house was staked on Friday morning. They
did it in pink sticks, I laughed at how fitting that was
for this Barbie-doll-style contractor. I had to make
a sign for the lot number so they’d know which lot
Contractors Mark Up Their Costs to to dump the portapotty on, etc., as all begins next
week, so I wandered over to another lot and asked
You the framers if I could take a piece of scrap plywood
to spraypaint my lot number on. They were laugh-
ing and saying, “Have your builder do that, you’ll
Part of the contractor’s standard formula is to break a nail” and I said “I am the builder!” and then
add something to every cost in a job. Hourly employee they commented on my pink Land’s End construction
wages, for example, are marked up considerably to pay boots/mudslogs so they teased me calling me the
Barbie-doll-builder and helped me get some wood.
for various indirect personnel costs. A common formula So then when the surveyor staked it in pink, I knew
is to multiply hourly wages by 2.75. Thus a $14 an hour they’d have a laugh with that. I’m sure they’ll have
worker could be billed out at $38 per hour. some fun watching me boss all these rough men
around over the next few weeks.
The book Building Contractor teaches budding Our final appraisal came back early in the week,
general contractors how to price their services. The first and we are elated. The home was appraised for
$900,000 and per our budget, it is costing us
key point is a hidden freebie: markups on materials. The $661,000 to build. I kept that in mind this morn-
author confines his discussion to a range of from 10% to ing when the long-term weather forecast showed
35%. How would you like to pay a markup of ten percent it freezing this week at night again, so I had to
go and get concrete blankets from the subdivision
on a $40,000 lumber package? The lumber supplier deliv- where the builder I work for is building. Those things
ers and offers credit. What does the contractor need to do are HUGE, and DIRTY, and AWKWARD. I got so
to procure that lumber that you couldn’t handle yourself filthy dragging them onto the utility trailer, I wanted
to cry “so this is how it is going to be” but then I
for a savings of $4,000? remembered what I am getting in return for such
hard work. We ran one trailer load up to our lot
In the 1980’s, I consulted for several contracting and dumped them in the corner so they are there for
the footings and foundation later this week, but we
firms in Ohio, and spent two years as a vice president for will still probably have to do one more load tomor-
one of them, responsible for marketing and sales. I never row morning. ACK! And so ends week one of my
“swung a hammer”, so to speak, but I reviewed many diary of this home. And here is the final picture of
our lot before anything was done to it.
construction budgets. In one instance, the principals of Laura in Sandy, UT
the firm had bought farm land for $4,000 per acre and
after building infrastructure, bundled some of the land

for around $250,000 per acre into an office building project. Allowing $25,000 per acre for infrastructure,
that land was marked up about 900% to the customer.
In my survey of general contractors, I found that they marked up materials by an average of 24%.
But the number could be even higher. An architect in Nevada told me that he set up a purchasing company
to help his clients save money on materials. He said his firm openly marked up the materials by 35%. Yet,
they almost always beat the material prices offered to clients by contractors.
One possible explanation is that some contractors may start with a list price, far above actual cost,
and mark that up. Or they may be practicing the double whammy of marking up an item, and then adding
a standard profit to the marked-up number. Or they may not buy scientifically and simply pay too much
for material. Either way, these contractor markups increase your cost and decrease your equity.
Get Bids from Three Generals

While a contractor can hurt you, they can also help you. Even if you don’t intend to use a general
contractor you need to take advantage of a free service they offer and get three general contractor bids on
your plans and specs once they are detailed. If you provide all three general contractors the same detailed
specifications (Chapter 6 will show you how) you will get an apples to apples comparison. This sets the bar
height for what you can save.
One expert tells me that bids may vary 15% on the same house at different times based on market
conditions. You may get a real bargain and decide to skip the effort of owner-building. More likely, you
will get an education in specifics that will help you save far more money. Insist on line-item estimates on
each thing with an indication whether it is to be done by “own forces” or who will likely do it. And have
them prepare a written schedule showing sequence and indicating how they will finish in six months, the
“deadline you must meet”.
Sources Say
“A general contractor usually takes the cost of labor and materials and adds a 50% markup.”
“By assuming the duties and responsibilities of a general contractor, you will save a dollar amount equal to what a gen-
eral contractor would have made in the form of profit and overhead.”
From Be Your Own Home Renovation Contractor
The Complete Guide to Contracting Your Home

Recommends spending 6 months planning and 6 months building.
“Incredibly, in some areas of the country, there is no systematic check to determine whether contractors are licensed or
not. Therefore, unlicensed contractors can ‘pull a permit’ to build a house and dupe consumers into thinking they’re legiti-
mate.”
“Even more amazing, loopholes in laws also let contractors build houses without permits. A few states allow unlicensed
contractors to build houses without a permit if the house is for their personal use. Some builders use this loophole to claim
they’re building a house for themselves, only to quickly turn around and sell it.”
From Your New House
“As a manager, the builder should know good and not-so-good materials and workmanship. Scheduling and coordinat-
ing material deliveries and subcontractor work are critical, and oversight during construction is crucial. Inept and don’t-
care builders turn things over to the subcontractors and accept whatever happens while good builders stay right on top
of the work, with frequent visits to the site to insure coordination and to get boo-boos fixed before they get locked into the
fabric of the house.”
From Better Houses, Better Living
(See page 263)

Chapter 4: You Can Manage Better Than
Readers Say
We started buying
a year ahead of
a Contractor time, boxes, and
outlets, 30 rolls
of wire. We over-
wired it. You build
Timeline: One year before groundbreaking better than anyone
else would.
Bryan & Debbie
G.
Management Concept One: “People Often Ingest Ottawa, IL
M&M’s” Readers Say

I’m building my
E
own home and
ven though I was a management consultant for more than 15 years, I am going I’m sure I can do
to restrain myself and only include two management concepts in this book. it better than a
However, these concepts will really help you to get a handle on your project general contractor.
I will pay more
and save money. attention to detail
then any general
The first is the duties of a manager. They apply to any general manager. ever will.
John N.
These are the tasks that a contractor should perform when building a house, and Lehi, UT
they describe your duties in doing the same:
Readers Say
Mark, I have been
✓ Plan ✓ Organize ✓ Integrate a reader of your
site for a long time
✓ Measure ✓ Motivate but an infrequent
participant. As

32 • Chapter 4: You Can Manage Better Than a Contractor
someone who was These five words form the acronym “POIMM”. The device I use to remember
been a general them is the phrase, “People Often Ingest M&M’s”.
contractor for
20 years I have
always thought ✓ Plan
that many of the
people we did
work for were Later in this chapter we will suggest high-value planning items that will
more then capable change the outcome of your project. Planning will be about half your work in build-
of managing their
own project. Since ing a home.
suggesting this
to them would
soon render me ✓ Organize
out of business,
it remained just a
thought. Organizing (making an organization) is bringing together your team. “Con-
Thank you for tracting” means organizing because it describes making arrangements for various
building a very specialists to work with you.
informative web-
site.
✓ Integrate
Ray Clark
Readers Say
We are trying “Integrate” is a good management word. In my seminars, I have found people
to add curb
appeal through who thought the “I” in POIMM was “implement”. But a general manager doesn’t
a major remodel actually implement. He or she “integrates” or coordinates the functions of the team
of our home: so they complement one another.
first; upgrade on
doors, baseboard,
and trim, new
closet doors,
✓ Measure
carpet, paint, and
electric, second; a “Measure” refers to management control, as in the job of a corporate con-
kitchen redo, and
third; a master
troller. To measure is to see that all the measures of the project are met. In particular
bedroom bath this means budget and schedule.
and closet expan-
sion. Remodel
rates out here are ✓ Motivate
$300-$500 a
foot. A carpenter
here told me Motivating your team includes clear communication, payment for services
he worked real and special recognition.
cheap, $150 an
hour. I’ve used
tradesmen for floor That’s it. These five functions are the work of a general manager. They are
refinish, and paint- the work of a contractor. My experience is that contractors usually neglect more than
ing. We’ll demo one of these functions, and sometimes every one of them. As an owner-builder, you
(demolish) the
kitchen ourselves, will be trying to perform for the first time the functions that a general contractor has
and are doing performed many times. If you think of them as POIMM you may find you do some
much of our own or all of them better than the best contractors.
work. Adding
walk-in closet,
fireplace, Jacuzzi.
The local prices
for that would be Management Concept Two: “Plan Hard, Work Easy”
$400,000. We
hope to bring it in Your first task is Planning. Years ago I discovered an amazing thing about
under $175,000.
Dave M. planning. It saves time and money. This idea was made clear by Crawford Greenewalt,
Sunnyvale, CA president of DuPont in the 1940’s. DuPont had done manufacturing studies to see if
planning was worthwhile. I call the conclusion the Greenewalt Principle:

Chapter 4: You Can Manage Better Than a Contractor • 33
“Top-notch workers first plan and then follow a relaxed rather than a frantic Readers Say
pace. Planning their time makes this ease possible, for every moment spent plan- We do a better
ning saves three or four in execution.” job than experts
because we care.
They tend to just
DuPont discovered that a twelve-month project could be shortened to nine get through it and
months by first spending one month in planning. Then, an average of eight months they slop around.
Wilma B.
more was required to complete the project. Tampa, FL
Readers Say
One of my friends tested this on programmers in a computer testing division I read some of
of a major software company. Two programmers of the same average productivity The Owner-Builder
were given the same program to write. Much like general contractors, both program- Book but I ended
up getting a
mers indicated they would like to jump right in and begin work. One was permitted contractor. Things
to start programming without any preliminaries. The other was instructed to plan are slow with
and diagram the work in detail before programming. the contractor. It
would have been
faster if I had built
The first programmer jumped right into the task, and with changes and it myself.
rework, he had the finished program ready in eight and a half months. The second John F.
Asheville, AL
programmer merely planned. He planned for a month, then two months, and finally
was ready to program after two and a half months. He was finished three weeks later. Readers Say
Both programs were considered equal in quality. Banks think that
owners are total
dummies. They are
used to working
Why Plan? with developers
who have a nice
little pat package.
We all know the old tailor’s maxim, “Measure twice, cut once.” It only takes When you walk in
a few seconds to make a cut with a power saw. Measuring takes just as much time. with something to
present, they don’t
But construction tradesmen know it saves effort, time and money. I have heard car- know how to deal
penters exclaim with mock irritation, “I keep cutting this piece, and it’s still not long with you.
enough!” Jean & Bill H.
Lansdale, PA
My then college-age son, Ben, supervised a crew of American high school Readers Say
students a few years ago in the construction of a low-income house in an impover- We were way
over budget and
ished area of Mexico. He instructed the sophomore girls on the first day to cut the it took a lot longer
lumber lengths for the frame of the small structure. In the space of a half hour they than we thought.
cut all the lumber to the wrong length. There was no more lumber available, and the You almost get
into a panic state.
crew had to work around the problem for the rest of the project. We had to do
a lot of building
When you plan a construction project, you are “measuring twice”. It costs during the winter,
couldn’t find a
nothing to plan. It causes no one a delay. You are off the interest clock that starts roofer, went into
when you break ground. Later, when you follow a good plan, you can work at a a panic and
relaxed pace and get done much sooner. You naturally save money on interest but grabbed who-
ever... If we had
also on all your other expenditures. Planning time uncovers bargains, opportunities, gotten the city to
and superior options that you don’t turn up in haste. move a little faster
on our permits,
that would have
General contractors and some owner-builders seem in a rush to break helped.
ground. I felt the impatience to do so. Even though I did much with planning, I Jim and Carol T.
glossed over the planning for the unfamiliar task of doing the electric wiring for the American Fork, UT
house. Confucius said, “Nothing done in haste is thorough.” This proved painfully
true for me.

Readers Say I spent an hour or two planning the electric work, thinking that my construc-
Your book was tion advisor would show me what to do. He never showed up to help me, and it took
very informative Elaine and me 800 hours and lots of anxiety to do the job. We saved money, about
on this. I feel
bad for any- $6,500, but the task was excruciating. Real electricians can finish a house like ours in
body who lacks about 80 work hours. It’s amazing but true that we beginners took ten times as long as
understanding on the pros do.
the management
side. With the
information, I think Having been through it, I now estimate that if we’d spent a month, or 160
it would behoove legitimate hours planning the task in detail, we could have saved three times that
everyone. I don’t
think there is much in implementation, (480 hours), as the Greenewalt principle indicates. That
anything in print means we would complete the electric work in 320 hours total, about four times what
like this. Let’s start an experienced team would take.
by introducing
the plans to some
subs that might Electric work is interesting, as are the other trades in a house, but only a small
do the work. It’s portion of our savings came from doing self-work. We saved about $25,000 on the
really, really busy
here now, even four trades we did ourselves: electric, ceramic tile, painting, and landscaping. The big
my own subs swinger is the management of the job at a savings. The rest of this chapter gives you a
are abandoning look into the possibilities that planning affords.
me. Two or three
bids isn’t going to
work. I look at a
minimum of five to
six subs bidding
I Want a Thousand Hours!
on a project if
you want to have You remember the wartime expression “Uncle Sam Wants You!”. My version
a choice. There’s
such a demand
is “I want a thousand hours!”. I want you to spend 1,000 hours planning the construc-
here that the tion of your house. There are 2,000 hours in a work year (40 hours times 50 weeks). I
crews are selling want about a half year of planning, even though you and your spouse may share the
themselves out to
anybody for more
duties and possibly spread them over several years of time.
pay. There are a
lot of slam-dunk Once our job started, I found that I was too short on time to do a number of
homes with vinyl
siding in Idaho.
crucial things properly. Inevitably, the things you rush cost you more money than they
Very few new should. As owner-builder Debbie Crosby told me, “You find you are under the gun to
people coming figure out windows, for example, in two days.” I regretted that I had not done more
into the trades.
It’s a common
planning. The most common regret of O-B’s I interviewed was the same.
problem to try and
find labor. We When I first interviewed owner-builder couples ten years ago, they reported
get people who
tell us they are a
521 hours of planning, on average. It’s gratifying to see in our most recent survey,
12-year carpenter, that O-B’s (two-thirds of whom had read The Owner-Builder Book) now averaged 688
and then they do hours. Elaine and I spent about 700, and it was relatively easy to do. Some of the tasks,
$3,000 worth of
damage in two
like shopping for fixtures and attending the “Parade of Homes”, are actually recre-
days. If people ational. I have been keeping track of the work hours I spend for about 20 years. It has
have the informa- become a habit for me, and has provided me many insights. On our house project I
tion you give in
your book, it’s a
also tracked Elaine’s hours. This is how we spent the combined total:
win-win for every-
body. They will Planning: 700 hours
enjoy the process, Electric work: 800 hours
they will get what
they want. Other trades: 1,000 hours
Larry T.
General Contrac-
On-site supervision: 1,200 hours
tor Total: 3,700 hours
Driggs, ID

We saved $180,000 on the house, which works out to $60 an hour saved. But Readers Say
we only saved $25,000 on the trade work, or about $14 per hour expended. The other Built our house
$155,000 is attributable to planning and on-site supervision. Site time is valuable, and we’re in it. It
went great, very
particularly in preventing mistakes and rework, but not as valuable as planning. I few problems.
would say planning is three to four times as valuable as site time. Therefore, I would People tell you
attribute $150 per hour in savings to the planning and $42 per hour in savings to the can’t do it, but you
really can. You
site time. run into a lot of
obstacles, but if
Task Time Value Total you are prepared
for it, it goes well.
Planning: 700 hours $150/hr. $105,000 Chuck & Laura L.
Providence, UT
Electric work: 800 hours $8/hr. $6,500
Readers Say
Other trades: 300 hours $19/hr. $18,500 We built 2,071
square feet fin-
On-site supervision: 1,200 hours $42/hr $50,000 ished, and 2,071
in the basement.
Total: 3,700 hours* $60/hr. $180,000 I cherrypicked
the marble for
the bathroom,
(*Don’t be alarmed by the huge total. The average O-B couple in our survey spent less insulation, rain
than 500 management hours on site during construction.) gutters, sheetrock
taping, the lever-
It takes a thousand hours to plan because there are so many requisite, high- age worked well.
I show the vendors
yield tasks to perform. A thousand hours is a lot, but people in our country watch actual figures.
an average of more than 25 hours of TV a week, so just by eliminating TV-watching, Vern & Catherine
a married couple can open up 1,000 hours in 20 weeks. That’s only five months. If P.
Willard, UT
you consider that each hour may be worth $150, what’s a few missed reruns of “Sein-
feld”? Readers Say
I know some
people who are
Is 1,000 hours too much? It’s only half a year of work for one person. You owner-building
have to figure that you are trying to do the work of a contractor better than he does it. right now and they
That contractor may have learned his trade over many years, even decades, he or she are having a hell
of a time. They
might have gone to school for additional training, and you are going to replace him. didn’t read your
This naturally takes some effort. book, and didn’t
plan properly,
even though he’s
By comparison, remember that saving $100,000 on a custom home could cut an electrician.
ten years off the necessary working life of a person making $100,000 a year — not a Marion J.
bad exchange for a few months of planning. Hooksett, NH
But the good news is that the effort is enjoyable. Forums

I submitted my
plans to Planning
What do you do with your 1,000 hours? At the end of this chapter are the com- and Development
in February. I have
bined recommendations of ourselves and the owner-builders we interviewed along submitted a final
with the suggestions of lenders, house designers, and inspectors. Most of the ideas are revision (fingers
explained further in this book. Others are self-explanatory. Use it as a checklist to crossed) of my
drainage plan,
see that you have worked the suggested areas. Take them in the order that works out and a revision of
for you. Keep track of your time. If you address each area and spend 1,000 hours, you the building plan
will have an easy project and a quality house. You will beat the system and save more with the engineer-
ing, and the wind
than $100,000 on your custom home. analysis, follow-
ing the revision
guidelines. If all

is good and well, how When I wrote my first marketing plan for a client 20 years ago, it took
much longer will I have me 1,000 hours to complete. After some years, my tenth plan took about 200
to wait to obtain a build- hours. Any general contractor would laugh at the expenditure of 1,000 hours to
ing permit? The CS told
me 3 weeks. Is this fairly plan your first owner-built home. It wouldn’t be considered efficient. But you’re
accurate? not concerned with efficiency, only that you succeed. On your tenth house, you
Claudia in Glendale, will be able to knock out the prep work in, say, 200 hours.
AZ
Three weeks is prob- There are 85 items on our list of planning suggestions. If you or your
ably realistic for a spouse spent an average of a day and a half on each of them, it would add up
review cycle based on
my experience. If you to 1,000 hours well-spent, and well-rewarded. Of course, some of the activities
haven’t heard anything will take many days, some a few hours. Henry Kissinger, former U.S. Secretary
in three weeks begin of State, said of his time in office that “...all you can do is spend the intellectual
calling and/or going to
the counter. If they find capital you have accumulated in advance.” If you are tempted to short yourself
something they don’t like on planning, consider that each hour you forego may cost you $150. Once you
about your plans you start construction, you will have no more chances to prepare.
are in for another review
cycle figure two months
to get the changes
made, the submittal How to Use the Planning Steps Worksheet
back in and review
time. Use the Planning Steps Worksheet as your notes of planning activities
They normally send and chart your progress. There is a progress bar provided with each step that
faxes when they want you can color with a pencil to see at a glance your level of completion. On the
plan revisions and call right of each step is a tally of hours to allow you to track the extent of your
you when a permit is
ready. effort.
Michael in Cave Creek,
AZ
You guys in Maricopa Act Like You’re a Business

County are spoiled.
We are used to “three
weeks” which means
If you plan, organize, integrate, measure, and motivate, you are per-
that’s the day Pima forming the intended functions of a contractor or developer in building your
County sends it off to house. For the duration of the project, you are performing business functions.
third-party for review
and they “have no con-
You are a business and should be recognized as such.
trol” over the schedule.
Had one project take To reinforce your role, make the effort to resemble the existing busi-
3 weeks just to get
Outdoor Lighting Code
nesses in the industry. Name your business, (you don’t have to incorporate) and
revisions approved. get business cards. You can be a “contractor” or a “consultant” or a “developer”
for the duration of your project. Register with your state or province to buy at
Usually have to bug
them just to find the
wholesale and pay sales taxes when you use your purchases on your own proj-
plans, because their ect. This is called a sales tax or resale number. There is no charge for this privi-
computer “updates” may lege in my state. Get a business license, sometimes called a DBA license, from
be four days behind.
But we have a new
the city or county where you live. Print the license numbers on your business
director and he suppos- card along with your email address and your phone and fax numbers.
edly is on the ball about
all this scheduling and
turn-around stuff.
If you don’t have a fax machine, you can use the fax number of your
local quick printing establishment. Treat it as if it were your own number. If
Hush, this is a secret, you receive faxes, they will call you and you can pick up the fax when you pay
there are some employ-
ees downtown I have
the charge. You can even put a toll-free number on your card. It is not expensive
yet to see work in five to set up this service with your long distance carrier.
years.
Dale in Tucson, AZ

Readers Say
We are a year away from having blueprints, and I have 300 hours of prep in already.
Letha M. San Anselmo, CA
Readers Say
At first, I thought that 1,000 hours of planning was crazy, but now I think 1,400 hours sounds good. Everything we did in
the planning phase saved us time and money later.
Kathi D. Tucson, AZ
Journal
I must be getting ahead of myself. Every time I think we’re getting close to starting the actual groundbreaking we’re really
still many months away. Why did I think this would be easy?
The realization has set in that while I really want to start building my house tomorrow, I am still only in the “planning &
research phase” and have many decisions left to be made. While there are many knowledgeable people on this website
who are more than happy to offer me advice, the decisions still rest on my shoulders. And with so many options out there
– which one is right for me?
I thought I had this all planned out a year ago. How naive. There are so many things to consider when building and I am
lost in a sea of information trying to fish out what appeals to me and sounds like something that is affordable, practical
and beneficial for my family. Just when I think I’ve set my hook and I’m reeling one in, I see a bigger fish out there ... So I
guess this could go on for a while, but I’m OK with that. I would rather take my time and learn everything there is to learn
about every product out there. Then I will make informed decisions that we can live with. Until then I will stare longingly at
my house plans.
It seems as though everywhere I go I try to make contacts. Do you know a good electrician, plumber, HVAC, GC (to
use for consulting only) ... I have so many names and recommendations that I don’t know how I could possibly talk to all
of these people. But here and there I get some good advice and by talking to some people of the trades they are able
to offer me ideas that I haven’t thought of and have given me a general idea on what costs might be or directed me to
change something in my plan because it really wouldn’t work the way we had it.
One step at a time ... we’re forging ahead and learning as we go. It’s a great and stressful experience that I wouldn’t
want to pass up. I’m proud to say that I’m owner-building my house. Most people pass this opportunity up because of
lack of time and experience, but it’s worth what you have to learn and all the extra time you have to put into it. I think the
end result will be an amazingly beautiful home and it will feel awesome to know that I designed and built it myself.
Angela in Lake Helen, FL
Forums
Just a little something I came across... vistaprint.com prints 250 free business cards. All we did was pay for the ship-
ping, which was nominal. They gave us an estimated turnaround time of 14-21 days for the slowest shipping, received
it in less than a week. The cards look really nice – ours have a colored background and it looks professional. I wanted
something that didn’t give the fuzzy edges of perforated cards. Only thing is – there’s a small line on the back in tiny print
saying their website name, but around here, that won’t raise an eyebrow. I’ve seen other professionals use these cards.
That’s actually how I found out about them. Just wanted to share that if someone was looking for an inexpensive way to
print professional-looking cards.
Joanne
Sources Say
The Complete Guide to Contracting Your Home recommends spending 6 months planning and 6 months building, and
suggests: “Form a separate corporation if you want to set your enterprise off from your personal affairs. This may give you
a better standing among members of the building trades if they feel that they’re dealing with a company instead of an
individual.”
“Bob Vila? Bob, Norm, and Steve from This Old House? Sorry, folks, this type of skilled building is seen only on television.
Real life means building crews who are more like Larry, Curly, and Moe – bumbling idiots who couldn’t tell their butts from
a two-by-four. The only thing these guys ruminate on endlessly is which bar they’ll hit at quitting time.”
From Your New House
“One of life’s greatest satisfactions can come from starting from scratch and ending up with a home that’s the result of your
ideas and decisions. You can even be your own general contractor! This may seem ridiculous to you right now, but it’s not
that difficult with the help of companies formed specifically to help you make decisions that general contractors make and
to help you save part of the money that a contractor needs for overhead and profit.”
(See page 263)

Planning Steps
Task Notes
Create or add to a dream home notebook.

25% 50% 75% 100%
Start and add to a written list of your questions.

25% 50% 75% 100%
List the resources you bring to the project.

25% 50% 75% 100%
As a couple, resolve differences and work on your relationship.

25% 50% 75% 100%
Clarify your household budget in writing so you know how much you can contribute while building.
25% 50% 75% 100%
Generate personal financial statements and supporting documentation.

25% 50% 75% 100%
Obtain a copy of your credit report and clear up any errors.

25% 50% 75% 100%
Develop a file of house pictures you like.

25% 50% 75% 100%
Make seasonal observations at your property.

25% 50% 75% 100%
Go out to projects and watch homes go up, talk to foremen.

25% 50% 75% 100%
Scan the classified ads for construction-related offerings regularly.

25% 50% 75% 100%
Read books about self-contracting.

25% 50% 75% 100%
Network with other Owner-Builders through our on-line Forums or O-B Connections.
25% 50% 75% 100%
Tour the “Parade of Homes” in your area and take notes.

25% 50% 75% 100%
Notes Tally of Hours

Task Notes
List and refine your house ideas.
25% 50% 75% 100%
Measure rooms you like in other houses.

25% 50% 75% 100%
Do extra research on kitchens and baths.

25% 50% 75% 100%
Develop lists of features room by room.

25% 50% 75% 100%
Write up specs for each trade.

25% 50% 75% 100%
Interview subcontractors. Try for five in each category.

25% 50% 75% 100%
Background visits with lenders.

25% 50% 75% 100%
Develop preliminary construction budget.

25% 50% 75% 100%
Interview general contractors.

25% 50% 75% 100%
Get estimates from general contractors.

25% 50% 75% 100%
Develop preliminary drawings with architect or designer.

25% 50% 75% 100%
Develop materials lists.

25% 50% 75% 100%
Meet with suppliers to get recommendations and prices.

25% 50% 75% 100%
Visit construction supply outlets regularly. Track prices on items you will need and take advantage of specials.
25% 50% 75% 100%
Open “builder” accounts at lumberyards and distributors.

25% 50% 75% 100%

Task Notes
Confer with each utility. (Includes gas, water, electric, sewer, phone, cable TV, internet, and trash removal.)
25% 50% 75% 100%
Identify and talk with other “team members”.

25% 50% 75% 100%
Get lumber package estimates.

25% 50% 75% 100%
Shop for plumbing and electrical fixtures.

25% 50% 75% 100%
Shop for bargains on all other materials.

25% 50% 75% 100%
Read about trades you will supply.

25% 50% 75% 100%
Go to do-it-yourself classes for trades you will supply.

25% 50% 75% 100%
Develop a written plan for your self-work.

25% 50% 75% 100%
List your tools; clean, sharpen and lubricate.

25% 50% 75% 100%
Select and purchase any tools or cleaning materials you’ll need.

25% 50% 75% 100%
Buy a generous supply of common fasteners to keep on hand.

25% 50% 75% 100%
Shop for trim materials.

25% 50% 75% 100%
Inspect the work of subcontractors you may use.

25% 50% 75% 100%
Attend home and garden shows or a professional construction convention.

25% 50% 75% 100%
Meet and talk with your municipal inspector.

25% 50% 75% 100%

Task Notes
Interview and select an independent inspector.
25% 50% 75% 100%
Select ceramic tile.

25% 50% 75% 100%
Select hardwood flooring and find source.

25% 50% 75% 100%
Find carpet source.

25% 50% 75% 100%
Study and select cabinets.

25% 50% 75% 100%
Select bathroom and kitchen fixtures.

25% 50% 75% 100%
Shop for towel bars and door hardware.

25% 50% 75% 100%
Shop and compare window sources and windows.

25% 50% 75% 100%
Make revisions to drawings with architect or designer.

25% 50% 75% 100%
Share and discuss drawings with selected subcontractors for input and estimates.
25% 50% 75% 100%
Get three bids from selected subcontractors in each category.

25% 50% 75% 100%
Get more bids in categories where you feel uncomfortable.

25% 50% 75% 100%
Get three bids from selected suppliers needed.

25% 50% 75% 100%
Build a file of sub and supplier estimates.

25% 50% 75% 100%
Review the bids down to the line items. Enter on a spreadsheet.

25% 50% 75% 100%

Task Notes
Refine your budget.
25% 50% 75% 100%
Talk with past customers of selected subs.

25% 50% 75% 100%
Write letters (faxes, emails) to selected subs to indicate their selection.

25% 50% 75% 100%
Watch construction videos, planning DVDs, and TV shows.

25% 50% 75% 100%
Read builder magazines.

25% 50% 75% 100%
Dream.
25% 50% 75% 100%
Check with your state or province about insurance coverages required.

25% 50% 75% 100%
Shop for coverage.

25% 50% 75% 100%
Learn how to use a computer spreadsheet.

25% 50% 75% 100%
Build your budget on computer.

25% 50% 75% 100%
Review your budget with several people.

25% 50% 75% 100%
Build your calendar on computer.

25% 50% 75% 100%
Review your calendar with several people.

25% 50% 75% 100%
Make revisions to budget and calendar.

25% 50% 75% 100%
Develop loan proposal and presentation for lender.

25% 50% 75% 100%

Task Notes
Apply for loan.
25% 50% 75% 100%
Develop final drawings with architect or designer.

25% 50% 75% 100%
Study your plans thoroughly, review them with other people.

25% 50% 75% 100%
Take out builder’s risk insurance policy.

25% 50% 75% 100%
Set up clear property boundary markers.

25% 50% 75% 100%
Get your permits; laminate a copy for on-site use.

25% 50% 75% 100%
Go to Zoning if you need to pursue any variances.

25% 50% 75% 100%
Set up economical cell phone plan, program team member phone numbers into phone.
25% 50% 75% 100%
Preliminary clearing and rough staking.

25% 50% 75% 100%
Call your local underground utility locator service for underground utility flagging.
25% 50% 75% 100%
Make construction sign with street address and laminated permit copy.
25% 50% 75% 100%
Other:
25% 50% 75% 100%
Other:
25% 50% 75% 100%
25% 50% 75% 100%
25% 50% 75% 100%

Each of the
planning steps
is explained
and illustrated
in our DVD
series, “The Ten
Commandments
of Owner-
Builders”
(See page 268)
These planning
steps are also
available on
a spreadsheet
template at our
Free Download
Gallery

Project Notes

Chapter 5: You Will Profit By Building a True
Sources Say
“Getting a custom
home is well
Custom Home within just about
everyone’s ability.
But there is work
involved. You’ll
Time line: Nine months before groundbreaking have to figure
out just what you
want, not as a
nebulous dream,
Starter, Step-up, Custom, Dream house but as something
that can be put
A
onto paper and
ccording to a recent survey of custom builders in Custom Builder Magazine, then built.”
the average U.S. custom home was 4,000 finished square feet in size. The From Better
average total value of a new custom home was $950,000 including land. Fac- Houses, Better
Living
toring out land at 25% of total cost, custom home construction prices were then $180 (See page 263)
per finished foot, on average. The average contractor-built custom home construc-
tion budget in this survey was $713,250. Forums
Cara, if you have
what you want,
By contrast, the median house built in the U.S. this year was 2,400 square feet pay what you
in size and had a value with land of $270,000 according to the U.S. Census Bureau. have to pay and
Factoring out land at 20%, the median construction cost of a new house in this coun- move forward.
try is $216,000 or $90 per finished foot this year. It was our experi-
ence in the end
Traditionally, single-family homes are classed roughly into three groups, by we didn’t really
“save” any money.
size and cost: “starter”, “step-up” and “custom” or luxury homes. To these groups, I We could have

52 • Chapter 5: You Will Profit By Building a True Custom Home
bought a house would add a high-end classification of “Dream Home”. The starter homes are at the
for $100 a sq bottom of the market in scope, the step-up homes are in the middle, and the custom
ft. We got a homes occupy the high position. A dream home is a highly customized custom home
house for $100
a sq ft that a that the owner personalizes to his tastes without major concerns over its appeal to a
builder would subsequent buyer.
have charged
$300 a sq ft to
build. There was With custom (and dream) homes averaging over $900,000 and the median
a house about new house price at $270,000, there is a great distance separating the categories of con-
6 blocks from us struction. Factoring out dream homes which can run into the millions of dollars, the
that was built the
way we wanted custom home category would likely start in the $500,000 bracket currently. Step-up
with upgraded homes would generally start in the $300,000 to $400,000 bracket and starter homes
materials. It was in approaching the $200’s.
the Sunday paper
that the builder
charges $300 per The issue for you when you set out to build a custom home is that it will be
sq ft. recognized by the market in the custom category, and priced accordingly at resale.
You are going to The starter and step-up categories hold much slimmer profit potential at resale than
end up with the does a custom home in total dollars. At the same time, a custom home can bring a
house you want disappointing return if it tips over into the dream home category and is too custom-
at a tract home
price. ized to attract a solid price.
Lyn
For example, if you build a high-end custom home of 10,000 square feet
Lyn – you could
not have said it with large rooms, but only two bedrooms, as one owner did, you may find very few
better. I finally prospective buyers at resale and attract a very small profit on your costly original
JUST about a investment.
month ago real-
ized the difference
between building
“budget” and
building the way Four Ways to Make Money
you described.
You have to look Traditionally, your house adds to your wealth in two ways. The most impor-
at the end value
of the house tant way is through appreciation, which has averaged 5% per year in the U.S. for the
compared to what past 25 years. This is a valuable source of gain, much better than a savings account. If
you spent. If you you have a $300,000 house, and made a typical down payment of $30,000 to buy it,
come out on top
(and you likely your 5% gain is measured against your $30,000 down payment. That returns $15,000
will), great! But in per year on $30,000 or 50%. Your savings account pays less than five percent on aver-
all honesty, even age.
if you just “broke
even” – and that
really depends on The second way your home adds to your wealth is through retiring your
what you consider mortgage. For most of us, this is a small but steady gain. If you hold a $300,000
breaking even
– and ended up in mortgage, and you make $2,500 monthly payments, you reduce the mortgage by only
your dream home, $1,000 or $2,000 per year in the early years.
I think I’d still call
it a successful
project :) A house I bought in 1980 gained $85,000 of appreciation in twelve years, or
Cara in Orlando, $7,000 a year. I had also paid down my mortgage by more than $12,000, or $1,000
FL a year during the period. Compared to savings, this was a superior gain for us; but
Sources Say small compared to the gain afforded by owner-building.
Your New House
gives ten clues to Owner-building opens up two additional areas of gain. The first is keeping
a quality home.
(See page 263) the costs down, and the second is pushing the value up. The latter is done by building

Chapter 5: You Will Profit By Building a True Custom Home • 53
a house with market appeal, one which sells better and for more money. This is where Forums
selected, researched features come in. Does anyone
know if the
absence of a tub
We added $180,000 to our net worth in the eight months it took to build our in a house hurts
custom home. And the special features we managed to incorporate will enhance the the resale value?
price at sale. We built the house, which was estimated at $115 a foot, for $63 a foot
It is just the two
using the techniques described in this book. But because of the strategic features we of us and we are
incorporated, we were told that the house would be currently worth $190 a foot in sure this may be
some markets. our last home;
since we have not
used our tub in
One architect told me that the right design and features will add 15% to the the present house
value of a house. Well-chosen features rank with budgeting and scheduling as your we are thinking
of having a large
core tools in making money by owner-building your home. The four ways of increas- shower with heads
ing your wealth through your home rank as: on both walls.
Shower stools and
such would suit us
1. Reduce cost of construction. fine, but as things
2. Improve resale with right features. go we will sell the
house one day
3. Derive appreciation. and wonder how
4. Pay down mortgage. bad this will effect
things at a later
date.
Marc in Defuniak
Your Dream Home Notebook Springs, FL
It’s just my opinion,

One important source for feature and design ideas is your personal thoughts but I wouldn’t
and observations. The planning you do in this area need not be confined to the year waste effort/
money/floor
before you build — it can span a lifetime. I started with a notebook, later included space on an item
a photo album, and then went to a word processing file that I could keep forever you won’t use.
updated and complete.
Unless this is a
spec house, I think
My first home was just a thrill that wore off slowly. It was such an improve- you should design
ment from married student living conditions that I thought it was perfect. It wasn’t your home the
way YOU want it.
until a few years into my second home, around twenty-five years ago, that I began to
write down ideas for improvement. You could design
the bathroom
so that a little
Some of the thoughts I entered into that first dream home notebook were: rearranging could
provide enough
- Guest complex with own bath — privacy. space to add a
tub in the future.
- Have a dinner party with other couples who have Pre-plumbing the
built and tape record the session for ideas. supply and drain
lines is a great
- Make the place as low-maintenance as possible. idea. That way,
- Water filtration system at point of origin. you get to live
with the shower
- Big storage bin or deep freestanding shelves you want, but
for seasonal items like Halloween costumes, future residents
can have a bath-
Christmas decorations, camping gear, and sports tub if they want
equipment. one.
Jon in Ellicott City,
MD
It took many years, but eventually all of those thoughts were implemented.
Samples from our current idea file include:

Personally, I don’t
use tubs; however, - Wider flutes on woodwork.
when looking at
new homes, a - Use slag for base under garage and basement
master bath with- floor, not pea gravel.
out a tub or even
a small tub seems - Floor drain within ten feet of hot water heaters
to “cheapen” the and water softener.
home. A Jacuzzi
or whirlpool
- Nice to have a ringer on the back porch for the
“completes” it, in doorbell, and one for the telephone, so you can
my opinion. At the hear on porch and in yard.
very least, I would
plumb for a tub - Next time, do solid-core interior doors. Choose
to be installed at oak or birch for stainability and solidity.
some later date.
Doug in Lawrence, - Insist that all ceramic tile grouts be mixed with
KS latex additive instead of water.
Ah, the freedom
to ignore what Our current idea file runs to 100 pages, and we add to it all the time. When
anyone else thinks you notice something that could be improved for your comfort, enjoyment, or con-
and just do it
your own way! venience, add it to your file.
But when you go
to sell, people Jim Stark, a veteran owner-builder from Nebraska, has built four times.
expect certain
things and that’s He says: “Building a house will stress any marital relationship. Making choices is a
why they’re stan- strain. We put together a notebook of what it will look like before we even start. We
dard items in new get most of the arguing out of the way. We take pictures as we build and turn it into
homes.
an album. We use the album to develop specs.”
Another thing to
consider is a tub Before our marriage, Elaine often cut floor plans and pictures out of maga-
that you can walk
or roll into. They zines and placed them in a file. By the time we began to owner-build, she was unusu-
have a door that ally competent at reading blueprints and visualizing the final product. She was a
shuts behind you, good owner-builder because she had come to a clear idea of what she wanted.
then you fill it with
water. You might
want or need that We arrived at common ground as a couple by visiting many “Parade of
feature some day. Homes” houses and noting features that we both liked.
William in Seattle,
WA
I agree. Some
things that seemed
You or the Market?
like a good idea,
(i.e. 5,000 sq ft In marketing, we say there are two orientations: product-driven and market-
home with two driven. You may be in love with a product (a house feature), and not find a market for
bedrooms or a
three-bedroom it. In residential construction, hot tubs and swimming pools are notorious product-
home with 9 driven examples. They cost more than they return on resale in many markets. If your
bathrooms) will thinking is market-driven, you may not particularly care about a feature, but you
decrease the
amount of poten- might incorporate it into your house for the sake of resale. In our case, market-driven
tial buyers down features included open floor design and high ceilings.
the road.
You never know Owner-builder Gary Ziser stresses this point:

what life will
bring you; a job “Be really careful how you design the house. This is extremely important. When
change, financial
change, spousal laying out a floor plan, you have to know when to back off your personal taste if
change, death, it falls too far outside the norm. Unless you are wealthy, you want to keep “resale”

in mind. Don’t overdo quality. You can spend a lot of money that’s not recoupable. disability, etc.
Remember, if you are an average family, you won’t live in the house more than Why limit the
seven years.” market that may
buy your home in
the future? If you
To get a feel for the market, Elaine and I made a study of the “Parade” homes get desperate, you
we visited in the year before we built. We noted features and the work of craftsmen need to attract
“common” types
that we liked in each home we visited, as this sample shows: of buyers.
Granted, it could
be 30 years from
“Parade of Homes” Example now; or maybe
next summer...
My guess is most
Features We Liked ladies will walk
into the master
bath and ask
Parade House #2 Robert Nelson Construction “where is the tub?”
285 S. Main St., Salem James in Broad-
view Heights, OH
Total Sq. Footage 5,554 It’s a balancing

Finished Square Footage 5,554 act (like everything
else in life), isn’t it?
Base Price (Construction) $714,086
Cost per total square foot $129 You’d LOVE a new
Cost per finished square foot $129 Ferrari, but the
expense would
hurt your family. A
Features Noted: used Civic makes
great financial
sense, but you
✓ Trex® front porch may not enjoy the
✓ Brick borders in front walk time you spend
✓ Leaded glass lites and transom front door in the car very
much. So, you buy
✓ Courtesy lights in front steps something you like
✓ Oak entry floor that’s within your
✓ Sports court financial means.
✓ Low, middle, and high molding in office As far as the
✓ Wider than normal doors house goes, you
✓ Brass grab bars in bath certainly have to
keep an eye on
✓ Pedestal sink resale. Building
✓ Marble bath floor and splashes something that’s
✓ Clawfoot tub with heat lamps above way out of the
norm could hurt
✓ Fireplace in master bedroom you in the long
✓ Crown molding in master bath run. On the other
✓ Outdoor drinking fountain hand, you’re
going to be
✓ Swinging door to dining room spending a great
✓ Turret room with leaded lites over double-hung windows deal of your life in
✓ Porcelain tub in guest bedroom upstairs this house. I think
you should design
✓ Walk-in closet off bath in guest suite your house to fit
✓ Ten-foot ceilings, wall painting, ceiling fans YOU, but with
✓ Fancy crown molding throughout an eye towards
the day when the
✓ Window seats, individual walk-in closets house needs to be
✓ Wooden wainscoting sold to someone
✓ Verdi Foresta granite countertops else.
✓ Six-burner countertop gas range

This bathroom
could be
✓ Tile backsplashes by Terry Robertson
designed with a ✓ Mirrored exercise room in basement
standard tub and ✓ Immense plumbing manifold system
shower layout,
either side-by-side
✓ Shared bath downstairs with urinal
or a combo unit. ✓ Formica™ countertops downstairs
Then the design ✓ Tile bath floor
could be modified
to put an over-
✓ Concrete window wells
sized shower, and ✓ Home theater in basement
possibly an extra ✓ Mud and laundry room with tile
closet or makeup
table, in the same
✓ Breezeway
space. That way, ✓ Fluorescents and shelves in back of garage
you get a area
that you enjoy
every day, but
To check our thinking against the market, we enlisted the help of an enter-
allow for a tub to prising Realtor® we found. This Realtor® pulled Multiple Listing Service® examples
be easily installed from his computer to show the features of houses that had sold recently in our target
in the future if
need be.
price range. The examples showed the prices paid and the features included for each
house.
I wouldn’t do it
that way if I only
planned on living
We used the Multiple Listing Service® as a checklist to compare against
in the house for a “Parade” homes that we liked. The home in the previous example looked like this on
short time. But if our checklist:
you plan on living
there for the long
term, why not
design it in a way
Multiple Listing Features
that makes you
happy?
Parade House #2
It’s a balance (Numbers in parentheses are MLS codes)
between your
enjoyment of the
home and the cost
of changing it for
someone else. Feature Quantity or ✓ if present
Designing your Bedrooms (MLS 9) 5
dream house
based purely Baths (MLS 10) 5
on resale seems Size of garage (MLS 11) 4
like marrying a
woman that you Main floor bedrooms (MLS 35) 1
think would be
easy to divorce. Main floor baths (MLS 35) 2
Jon in Ellicott City, Main floor square footage
MD
Levels 3
I think you have
to temper what
Upper level bedrooms (MLS 34) 2
is considered the Upper level baths 2
“norm” vs. what
you want yourself. Upper level square footage
Lower level bedrooms (MLS 36) 4
In all honesty,
after visiting Lower level baths 2
HUNDREDS of
modern homes, I Lower level square footage
have YET to see Brick construction ✓
a master bath

Metal siding without a tub.

Model homes,
Stucco spec homes, floor
plans, resales, etc.
Rock
Cedar shakes On the topic of
cars...When I
Composition shingles ✓ ordered my own
Corvette a few
Gas heat ✓
years back, the
Electric heat pump dealer had a story
of a special order
Formal entry ✓ Blue exterior/
Red Interior that a
Formal dining ✓
salesman wanted
Window coverings for the show-
room. It was way
Water softener beyond normal,
Garage door opener ✓ and they sold it
for thousands less
Wet bar than the others
that were there,
Humidifier and took much
Jetted tub longer.
Electronic air filter And this was

South Florida,
Unfinished basement where gaudiness
Walk-out basement ✓ is pretty much
acceptable.
Gas fireplaces 3
Expect to take a
Wood stove hit in selling some-
Second kitchen ✓ day, or plan on
a bath remodel.
Vaulted ceiling ✓ JMHO
Cable TV James in Broad-
view Heights, OH
RV parking ✓
Your comments
Satellite dish have been much
Dishwasher ✓ appreciated, It
even spilled over
Food disposal ✓ to the “M-in-Law
supper day”. As
Refrigerator ✓
with this forum, it
Complete range was split.
Countertop range ✓ I like the idea of

the closet, table
Range hood where the shower
Trash compactor would be and
have an oversized
Microwave ✓ shower where you
Wall ovens 2 could put a tub
at a later date,
Gas water heaters 2 plumb in for drains
under the table.
Electric water heater I can envision
Landscaping ✓ a 68” shower
with heads on
Fenced ✓ both walls and
benches. WOW!!
Sprinkler system ✓

OK, Next Tile flooring ✓

question, Tile or
Marble? I got a Vinyl flooring
quote for $3/sq
ft labor, 133 sq Wall to wall carpet ✓
ft or so. 12” tile, Hardwood flooring ✓
around $3/sq.
ft, give or take Patio ✓
$800 for tile. I
cannot imagine a Deck ✓
marble quote, but Covered deck
I will inquire in the
AM... Storm windows
I wonder how big
Storm door
of a fiberglass Double-pane windows ✓
drop-in shower
they make (at a Ceiling fans ✓
reasonable price)? Central air conditioning ✓
Marc in Defuniak
Springs, FL Swamp cooler
Very common in Laundry room
South Florida is Ten-foot ceilings ✓
the half-pentagon
shaped walk-in Vaulted ceiling ✓
shower on an
exterior wall with Family room ✓
dual heads and Main-floor master ✓
glass block win-
dows. The only
problem is that the Real Estate Survey
conditioned air
from the bathroom
makes the shower
Gradually we arrived at a list of features that we liked
cold. and the market seemed to like, as well. By looking at the Home
Builders Association “Parade of Homes” we got the ideas that
The ones in
friends’ homes
local builders seemed to favor. There is a risk that builder ideas
have tiled 24” are simply personal preferences and represent “product-driven”
benches, and very thinking. By using MLS listings of recent sales we tried to get
nice. A sample list of
James in Broad-
a “market-driven” perspective. We decided to test the resulting features from
view Heights, OH ideas with active Realtors. the Riverbottoms
Don’t forget that
house is available
young families will
We took our planned list of features and made a tele- for computer in
need a tub for phone survey of ten Realtors with agencies that sell custom our
bathing children. homes in our area. The Realtors were happy to talk and seemed Free Download
Mark in Canton,
TX
to enjoy our survey. We asked them to rate from 1 to 10 each Galley
feature in terms of its saleability in the price range we intended
Thought I would to build.
drop a line to tell
you all the tub
won out... The following were the features that scored 5 out of 10
or higher:
We negotiated
a great deal with
FWB Marble and
all the baths are
getting cultured
marble tubs and
showers. The wife
really liked the

Realtor Survey colors, too!! Also,

cultured marble
sinks and counter-
tops in the heads
Score Feature as well.
9 Jetted tub In the end, the
resale appeal was
9 Large master bedroom the advice that
9 Large walk-in closets swayed us. Our
neighbor is a real
9 Closet systems estate salesperson
and she highly
9 Formal dining room recommended
a tub, no matter
9 Walk-in pantry what the house
looks like. If you
9 Solid-surface countertops do not have a
tub they make for
8 Light, open look a hard sell, she
says.
8 Hardwood kitchen floor Marc in Defuniak
Springs, FL
8 Extensive exterior utilities
Wise choice!
8 Office
They also make
8 Removable windows for cleaning for a nice water
reservoir during
8 Water softener hurricane season.
Just add a few
8 Whole-house vacuum system drops of Chlorine
Bleach and seal
8 Gas fireplace the drain to pre-
8 Tile or hardwood entry vent slow leakage.
James in Broad-
8 Spacious kitchen cabinets view Heights, OH
7 Whole-house air filter Sources Say

“If you can, use
7 Sitting room off master bedroom underground
drainpipes instead
7 Bonus room over garage of simple splash-
blocks. Care must
6 Vegetable sink in kitchen island be taken that they
are not completely
6 Telephone in bathroom buried during the
backfill stage. A
6 Courtesy footlighting on stairs Heavy PVC black
tubing should be
6 French doors to master bedroom used.”
From The Com-
5 Whole-house sound system plete Guide to
Contracting Your
5 Home theater Home
(See page 263)
5 Hot water in garage
5 Center-meet closet doors
5 Recycling center

Sources Say Sub and Supplier Input

“Most buyers per-
ception of quality
starts (and finishes) To the Realtor input we added input from subs and suppliers that we inter-
with how much viewed. (See “How to Interview Subs” on page 87.) The idea is to balance what is
molding there is in
the house.” (Quot-
desirable with what is doable. The subs helped to explain the costs of doing things
ing a Georgia and alternative approaches to consider.
builder in Builder
Magazine.)
From Your New
Our wish list of features eventually filled several pages. We decided to incor-
House porate features on three levels:
(See page 263)
Sources Say 1. Crucial to quality, must accept costs.

“Eliminate as
many hallways Examples were:
and walls as pos-
sible. Hallways
waste building dramatic design and good layout
materials and add dual furnaces, air conditioners, and water heaters
to heated space
while making custom windows
a house seem high-end cabinets
smaller.” “Air is the jetted tub
cheapest building
material you can closet systems
use.” hardwood and tile
From The Com-
plete Guide to
Contracting Your
Home
(See page 263)
2. Helpful to resale, if costs not out of line.
Sources Say For example:
“You can save
money by pur-
chasing your own pre-wire for “future-proof” house technology
electrical fixtures. telephone jacks in every room
The markup is home theater
incredible.”
From The Com- courtesy footlighting on stairs
plete Guide to vacuum system
Contracting Your French doors
Home
(See page 263)
Sources Say
“It is possible to 3. Personal preferences if costs are low or opportunities arise.
save more than
20 percent, but it For example:
is also possible to
save next to noth-
ing. It all depends ceiling fans
on how well you bedside light controls
prepare yourself
for the task.” whole-house air and water filters
From Build Your solid vinyl deck
Dream Home for indoor sports court
Less
(See page 263) granite and marble countertops

Features of a Custom Home Sources Say

Better Houses,
Better Living
Owner-builders I interviewed from around the country offered their views gives five reasons
of important features to include in a custom home. The following list of their sugges- people buy or
build custom
tions is ranked by number of mentions: homes.
(See page 263)
• Tile and hardwood floors sion
Sources Say
• Central vac • Multiple phone and network outlets “Please don’t wait
• Custom woodwork and trim • Spectacular views until the meet-
• Granite countertops • Multiple separate bathrooms ings, or worse,
the drawings,
• Custom cabinets • Custom ceiling lines are under way to
• Pre-wire for automation and security • Master bath johnny room with read- figure out what
• Custom recessed lighting ing rack and telephone you want. If you
do, you will waste
• Upgraded insulation • Full brick/stone time and money
• Large closets and extra storage • Custom concrete on corrections.
• Jetted tub • Three-compartment kitchen sink And quite likely
you’ll compromise
• Large walk-in shower • All upgrades your goals so as
• Stainless or semi-pro appliances • Sitting rooms not to interrupt the
• Open floor plan • Altered roof line flow of work or
ruffle the feathers
• Generous covered patios, decks and • French doors of the designer.
porches • Study So figure out what
• Large spaces • High basement ceiling you’re after ahead
of time, and be
• Customized floor plan • Good acoustics/quiet willing to stick to
• Curb appeal • Air-to-air heat exchanger your mission.”
• High ceilings • Wood blinds From The Well-
Built House
• Two-story entry and family room • Two ovens/convection oven (See page 263)
• Large custom kitchen • Appliance garages on countertop
• Office • Undercabinet lighting Forums
• ICF walls • Double vanity Well, I met
with the kitchen
• Whole-house audio • Hardwood trim designer at Lowe’s
• Custom, low-E windows • Bonus space over garage yesterday and
• Oversized garage • Sinks in youth bedrooms was somewhat
disappointed.
• Ceiling fans in every room • Features that appeal to average I took lots of
• Energy-efficient buyer pictures to her
• Built-in media center • Daylight/walk-out basement and told her what
I wanted, but
• Oversized electric service and many • Three-car garage feel like she just
outlets • Skylights plugged a “cookie
• Location • Custom front door cutter” kitchen
into my space.
• Water purification system • Custom railings I think I could
• Upgrade roof covering • Cohesive design design a better
• Custom plumbing fixtures • Radiant heat one myself, but of
course have no
• Two large water heaters • Custom paint experience. I was
• Well-designed master suite • In-ground sprinklers wondering what
• Zoned HVAC • Wide walks and drive others had done.
We really want to
• No-maintenance deck • Sunny breakfast nook make a trip to the
• Lots of windows/natural light • Beautiful lawn/landscaping Kraftmaid outlet.
• Low-maintenance inside and out Has anyone else
designed their
• Pantry/wine cellar own? Any input is
• Pre-wired and plumbed for expan-

greatly appreci- A House that Works

ated! Thanks!
Marsha in Frank-
fort, KY “A house that works” is my theme in building a house. My impression after
touring hundreds of houses is that they lack imagination. Most houses are tremen-
Marsha, pretty
much had the
dously dull concepts involving little more than boxes stacked on top of each other.
same experience You can change this. By forethought, you can put all kinds of things into the design
at Home Depot and inside the walls that will make your house more usable and comfortable.
and another local
retailer that has
put tremendous I found Don Aslett’s book, Make Your House Do the Housework (See page
sales pressure on 263) refreshing and interesting. This housecleaning expert found that much recur-
me. We have
used the Kraftmaid
ring drudgery can be obviated by good design. As an owner-builder, you have the
layout planner unique opportunity — I consider it a stewardship — to make your home into a facili-
and the plans tative environment for better living. Winston Churchill captured the thought when
from Home Depot
and kind of come
he said, “We shape our buildings, and our buildings shape us.”
up with our own
thing. I really want Your house has a job to do, and that is to facilitate your life and that of your
to go to the Kraft-
maid outlet but
successors in the house. Some ideas to put your house to work:
dear hubby is very
hesitant. He keeps 1. Let it process the water with which you will cook, clean and drink. This
looking online can be through water filtration, water softening, water distillation, or a combina-
at stuff on eBay tion.
from there, and a
lot of it is dam-
aged and he is 2. Let your house improve the air you breathe. Through a variety of air fil-
like, “I don’t want tration systems, humidifiers, and air-to-air heat exchangers you can improve the
scratched dented
cabinets in our
healthfulness of your inside environment, and the cleanliness of your surroundings.
new home”. He Integral building envelopes or housewraps reduce dust infiltration.
is also afraid that
we will get started 3. Let your house feed you. Through forethought, you can simplify the pro-
and it will take
forever to gather cess of preparing and storing food in your new house. You can landscape for a place
the whole kitchen. to grow food and herbs; you can provide a root cellar or fruit room to store the pro-
It is a 4-hour trip duce.
there for us – so
he is just afraid it
will take 10 visits 4. Let your house give you a workout. You can build a sports court into your
and not be what design as we did. You can adapt a room into a workout room by providing appropri-
we really wanted. ate soundproofing, electrical service, and lighting with cable or satellite TV and wire-
Would love some
advice from those
less internet to facilitate the use.
who have been
there often as to 5. Let your house stimulate your mind. Provide spaces conducive to two-
how to go about person conversations. Create libraries and reading spots with natural and artificial
planning and how
long it took them light and privacy. Pre-wire for electronic internet and computer sharing pathways
to do their whole from room to room. Locate student desks in bedrooms. Pre-wire for telephone and
kitchen. Do you data access to many points, as well as wireless access to full house and deck or patio.
just have a list of
base sizes, wall
sizes and then go 6. Let your house clean itself. Build in a dust-free whole-house vacuum
and see what you system. Bring wash facilities to points of use. Avoid designs and surfaces that catch
find? Or should dust. Use scrubbable, cleanable, renewable finish materials.
we know the
exact cabinets we
are looking for? 7. Let your house warm and cool itself. Provide for air flow, orient your
Bren in Western, structure to capture morning and winter sun, design to shade from the high sun of
NY

summer. Provide means of thermal storage and insulate generously to protect your
found resource. We had the same
experience at
Home Depot. The
8. Let your house care for you. Make provisions for handicap access if you “KD” is nothing
have immediate need or if you will stay long enough to experience the ravages of more than a cabi-
unexpected injury or advancing age. See that your hallways are wider; your baths, net salesperson.
laundry and entrances are accessible, and your kitchen is open and adaptable. Design We spent about
4 hours with her,
in considerations for children and for pets. Make play spaces, gathering spots, and got the estimate,
storage for toys and personal articles. and took it to the
bank as we were
only interested in
9. Let your house entertain you. Pre-wire for whole house audio and home securing the loan
theater video. Provide for internet, satellite, and computer connections to televisions. and getting the
Create spaces for guests and gatherings. Design your house to separate activities and catalog and price
permit privacy. Provide for musical performances and instruments, for formal meals lists.
and holiday celebrations, and storage for holiday decorations. Facilitate your hobbies With a catalog
thoughtfully. of different ideas
and a couple of
10. Let your house make a living. Create and equip space for shop or office, books courtesy
of the library,
craft or livelihood. Anticipate the necessary utilities and facilities. See that storage, we designed our
display, delivery, and communication flexibility are built in whether you choose to own kitchen and
activate them later or not. took the ideas to
a custom cabinet
shop. Meryl (cabi-
netmaker) took our
Quality Considerations ideas, suggested
some of his own
based on what
In Chapter 6 we will talk about bringing your ideas to an architect or designer he is making and
who will incorporate them into a professional design. Before you see your design pro- installing in some
high-end houses,
fessional, you should give consideration to the quality you expect to build into your and we ended
custom house. up with a great
kitchen that is far
superior to what
As an owner-builder, you have the cafeteria-style privilege of selecting the we would have
elements and philosophies that go into your home. My interviews with general con- gotten from the
tractors showed a surprising ignorance on their part of the quality that should go so-called KD.
You really need
into a high-end home. Designers and architects, on the other hand, proved to be very to think in terms
fluent in issues of quality. As O-B, you will consider the issues and assure that your of how you want
design addresses all the quality possible on your construction budget. your kitchen to
flow, how many
cooks, your cook-
Consider: ing style, how
you break down
tasks, etc. I would
1. Noise reduction. have been willing
to pay someone
for this service as
2. Clean air and water. there are so many
things to consider
3. Energy and water conservation. (i.e. did you know
right-handed
people prefer the
4. Ease of maintenance and cleaning. dishwasher to the
left of the sink,
and left-handed
5. Suitable illumination. people prefer the
dishwasher to the
6. Longevity of design and materials. right of the sink – I

didn’t?), but all of

the KDs around 7. Preservation of investment value.
here are inter-
ested in nothing
more than selling 8. Comfort and convenience.
cabinets.
If you design your 9. Safety and security.

own kitchen, I
would seriously 10. Economies of forethought.
question the
current design
philosophy about Number ten means that you design quality in before you break ground, and
the design triangle that potential conflicts of design are worked out in advance and without the cost of
and focus instead
on how you use a rework and change orders. Later expansions and upgrades are facilitated by provi-
kitchen. You will sions you make at initial construction.
notice that most
high-performance
commercial Consider the uses to which your house will be put and make sure the design
kitchens are not accommodates those uses. Even common activities like food storage and musical per-
designed around formance can raise questions. Inspector Beryl Ford of Tulsa, Oklahoma explains:
a triangle. We
disregarded the
triangle concept “People may think they are okay with minimum requirements. A refrigerator
and focused more alone weighs 300 pounds. Most residential floors are designed for 30 pounds per
on workstations,
what we intended square foot of weight, and the fridge exceeds it. Then you load it with food, and
to accomplish with a heavy person walks up, the floor sags and squeaks due to concentrated load.
each worksta- A grand piano weighs 1,200 pounds, and has three legs, that’s 400 pounds on
tion, and made
sure we had the each of three square feet. Then a big guy comes over to play. Several people lean
cabinets and on the piano to sing, and the floor shakes.”
adequate counter-
top to support this
concept. The thoughtful observations in your dream house notebook, conversations
Kenneth in Lees with subs and suppliers, the care invested with the designer, and the on-site efforts of
Summit, MO you and your inspector during construction will all impact the quality of your house.
There are a Ultimately, you are responsible for quality — it won’t happen on its own:
few free kitchen
design programs “Quality is never an accident; it is always the result of intelligent effort.”
out there. Some
people say they John Ruskin
are pretty good. Seven Lamps of Architecture
You may want to
check this one out:
ALNO-Kitchen-
Planner. Comfort and Convenience Considerations
This one has a Over the past few years, Elaine and I have visited the homes in ten “Parade of
15-day trial:
Homes”. I always look for the same little conveniences: bedside shelves, ceiling fans,
upperspace.
lighted house numbers, closet organizers, water softeners, gas fireplaces with ther-
com/products.
Phil in Gainesville, mostat controls. One favorite convenience of mine is bedside light and fan controls.
FL Out of ten “Parades” with more than 200 houses, only one house had dual bedside
controls in the master bedroom. Everybody probably reads in bed once in a while,
I’m a little
“obsessed” with
but builders must figure you can take a walk when it’s time to turn out the light.
kitchen design.
Before opting for In our house, we made sure that there were two individual reading lights
our final plan,
I would take
over the master bed with separate bedside controls. There are separate switches at
bedside to control the ceiling fan and the fan light. These are in constant use and a

great convenience. One owner-builder I talked to pushed this convenience further. stock homeplans
South Carolinian Ernie Gerdts added deck lights and exterior floodlights to the bed- and lay out the
side array of switches. He floods the property with light if he hears a noise in the kitchen for every
one of them.
night. We chose our
houseplan after
I have never seen a gas fireplace with a conventional thermostat control in I was pleased
that I could have
a “Parade” home, although with a gas fireplace the thermostat is a no-brainer. You the kitchen of my
can maintain a constant temperature in one room throughout a cold night with this dreams in it. For
simple convenience. Even comfortable features like carpet in the master bath, or an me, designing my
own kitchen is the
overhead heat lamp are almost never in evidence. only way to go.
Forget the work
You are the judge of your comfort and convenience, and many small things triangle, think of
what will make
that you can add to your design are negligible in cost. You can make your home much your kitchen most
more livable with features like: enjoyable for you.
Kraftmaid, Meril-
• dual-pane low-E window glass lat, Thomasville,
• housewrap etc. have .pdf
• outlets in roof soffits for holiday lights or snow melt cables files of their stock
cabinetry online.
• whirly roof vents in warm climates Remembering that
• whole house fan stock cabinets
• central vacuum come in 3”
increments makes
• hot & cold water outlet in garage for car washing it fairly easy to
• good lighting and outlet availability in garage and outside house design your own.
• insulated garage doors
I “cheat” when I
• gas and electric outlets for choice at stove and laundry first design any
• programmable electronic thermostats space with cabi-
• abundant power outlets and access to phone, TV, and computer networks netry. I use 1/4”
graph paper with
• operable bathroom window 1/2”=1’. When
• porthole window in master closet or laundry I’m pleased with
• aluminum drip edge on roof the layout, then
I’ll hand-draw it to
• silent floor joists scale to work out
• glued and screwed sub flooring trimwork, molding,
• conduit pipe from basement to attic for future wiring access etc.
• anti-scald shower valves I’ve gone so far
• lawn sprinklers with line drains as to make a list
• nook and pantry storage of what I plan to
store in each cabi-
• lights in all closets with easily-accessed switches net. It has helped
• pull-out spray faucet in kitchen me decide what
• no-maintenance siding and deck accessories such
as pull-out shelves
• seat and grab bars in shower or knife drawer
• framing for flush-mounted refrigerator inserts I would like
• extra countertop outlets in kitchen and baths in each.
• in-wall blocking for hand rails, towel bars, shelves, drapes and cabinets Any of the home
• reading light over tub design software
• light over shower out there includes
kitchen design
• courtesy footlights on stairs capabilities in it.
• conduit under walks, drives and patios for sprinklers, lights and power I prefer Broder-
• hauled-in topsoil to improve lawns and gardens bund’s 3D Home
Interiors for kitchen
design. It was one

of those cheap Pay attention to the fatigue you may feel while standing on your kitchen
software programs floor, to drafts or cold surfaces in your bathroom in winter, to noise, and to lighting
I was able to in work, reading, and viewing areas. Notice when you must stoop or stretch to reach
get for just S+H.
It prints decent something you need. Notice the little things.
lateral views and
can print to scale. Professional builders are notorious for ignoring comfort factors in building
I’ve used this pro-
gram to note the custom homes. Writing in “The Brevard Builder”, a home building association news-
changes to cabi- letter, Tom Luce says:
netry – and mostly
appliance/plumb-
ing placement – in “Occasionally a builder will come up with things that are real head scratchers,
my blueprint. like an open-ended shower in a bath with ten-foot ceilings (that must be a chilling
experience), four-and-one half foot bathtubs...”
We have gotten
the majority of our
cabinets from the You will do better than that because it’s your house.
Kraftmaid ware-
house in Ohio. It
is a good idea
to be flexible. For
instance, I needed
Energy-Saving Features
two 30” wall
cabinets, but they One of the reasons your new home will automatically be more valuable than
only had one. existing homes is the advances in energy-saving technology that you can exploit.
So we substituted
(2) 15” cabinets Our new home uses a monthly average of just under 500 kilowatt hours of electric-
instead. Bring a ity during the summer. My records of 25 years ago show that my former home in
list and a sketch Columbus, Ohio used over 2,000 kilowatt hours a month during the summer. That
and you should
be fine. home was a single-story house that is 30% smaller than our Utah two-story.
Sybil in Leominster,
MA There are newer, more efficient appliances, furnaces, heat pumps, and air
Sources Say
conditioners on the market now, along with better insulations, glazing systems and air
“…our experiences infiltration barriers. New Styrofoam insulated panel sheathing systems (“Stress-skin
of the last 12 Panels” or SIP’s) offer bonuses to the new home builder in energy savings. Insulated
years have made
it obvious that
Concrete Form (ICF) construction, reputed to save a third of home energy consump-
most homes are tion, has been enthusiastically embraced by owner-builders who think about such
neither designed things deeply. According to TheNewEnvironmentalist.com, only 3% of new homes
nor built to best
suit the needs of
incorporate ICF technology. Our website survey indicates that 15% of owner-built
homeowners, the homes do. “ICF” is far and away the most common search term by all users on our
people that live in site.
them every day.
We think this can
and should be Even the placement of your house on the lot can save energy. Author Robert
improved. Hence Roy says: “The orientation of a house — any house, energy-efficient or inefficient
our mission – to
help people get
— can mean up to a 35% difference in the cost of heating and cooling.” You can
better homes for begin your energy savings strategy by taking advantage of building orientation, and
the hard-earned you can take advantage of every strategy of design to exploit your savings, such as
money they spend
on them.”
deciduous shade trees and lawn around the house for air-cooling perimeter moisture
From Better and heat absorption. Place coniferous trees on the north side of your house in cold
Houses, Better climates as a winter wind break. Economize the use of water by limiting grassy areas
Living
(See page 263)
in the design of your landscaping.
Owner-builders relate additional energy savings through the use of hydronic

radiant floor heat, electric heat strips under tile, heat pumps, sealed stove cooktops,
masonry exteriors, argon gas-filled insulated windows, low-E glass, zoned or dual

furnace and A/C systems, dual hot water Forums

heaters, setback thermostats, sealed gas I’m about to stake out my foundation, exciting stuff!
fireplaces, ceiling fans, computer-cal-
Can anyone help me with finding true South, not magnetic South?
culated heating and cooling capacities, The compass declination is about 13.5 degrees West at my location
roof overhangs to shade in summer and in Beulah Colorado, (Lat N 38 4 30, Long W 104 59 10) Does this
admit warmth in winter, tree plantings mean true South is actually 13.5 degrees west from magnetic South?
Thanks,
for shade or to block winter wind, gas Joe in Canon City, CO
appliances, compact fluorescent or LED
lighting, and the lower resistance of 12- You got it. Generally, when navigating in the northern hemisphere,
“West is best”.:)
gauge house wiring. You might do a little poking around – I found by spinning my house
so it is skewed slightly off of South, favoring East, I would increase the
overall solar exposure about 20%, because hills to the West of me
prematurely cut off the solar gain at about 5:00 PM. It’s designed to
maximize gain during the winter, but shield the windows from direct
solar during the summer.
I don’t remember the exact location, but if you don’t have any other
close topographical features that might cut off the exposure early,
you’d probably be fine to just stake it.
Good luck,
John in Erie, CO
Sources Say
Habitat for Humanity: How to Build a House lists the parts of a typical
house in 15 sections.
“Are today’s houses the best available for the money? As we will see,
most definitely not. As long as more thought is given to aesthetics, and
little, if any, to function, people will buy what they perceive is attrac-
tive. So that’s what gets built. But, why shouldn’t you have a house, to,
as Francis Bacon said, ‘live in’ as well as ‘look on’? You should, and
you can.”
Sources Say
Subject: Home Improvement Trends at NHS
From: “Amy Gorga” <agorga@clearblue.biz>
The 61st annual National Hardware Show is preparing for a full
house at its Las Vegas event May 9-11, with more than two million
square feet of floor space and 3,200 exhibitors at the Las Vegas
Convention Center. Manufacturers from around the world are work-
ing hard to develop thousands of new products you’ll see exhibited,
including hand and power tools, lawn and garden products, paint
and decorating products and gourmet housewares.
Here are several of the home improvement trends that will be exhib-
ited at the show:
Home Improvement is Looking Up: The long-term outlook for the home
improvement market remains strong. Global Insight projects an aver-
age of 4.6 percent total market growth in constant dollars for 2008-
2010 – well ahead of the rate of overall economic growth (Home
Improvement Research
Institute and Global Insight).
Women Continue to Roll up their Sleeves: Women are buying more

homes and are more responsible for basic repairs. Women account
for about a quarter of power tool and accessory purchases in the
United States (Home Improvement Research Institute).

New Desires in Gardening: Professional-looking landscaping is going mainstream. Sales for lawn and garden products
– including both plants and equipment – totaled $36.8 billion last year. The average annual-per-household lawn and
garden expenditures totaled about $449 (National Gardening Association). New gardening styles are leading to baby
boomers getting involved in vegetable gardening, large pot sculptures being replaced by terra cotta, and patios being
turned into comfortable extensions of the house where people are spending quality time outdoors.
How to Warm up on Those Cold Nights: Requests for energy efficient products are up. Home owners can save as much
as 35 percent a month on their home heating bills by improving their home’s energy efficiency. Consumer demand for
products that lower utility bills is leading toward more green building. The typical U.S. household is expected to pay
$892 to heat their house this season, up $107 from last year (Energy Department).
Gaming Goes Beyond Scrabble and Monopoly: Homeowners want to create the sports-bar experience without having to
leave their home. Families are integrating game rooms into their homes for more quality family time. Game rooms provide
a place for teens to socialize at home – smart thinking mom and dad!
White and Beige are Out: Lots of color is making a splash in homes…even on the ceiling! Ceilings are now colorful
– especially in hallways, dining rooms and kitchens. As for walls, finishes with metallic paints and color on top is the new
way to go. Popular colors today have a natural, light look, including softer colors inspired by nature.
Bathroom Luxuries: Where are people going to relax? The bathroom! Chairs and recliners for lounging are becoming
more common. Today’s master bathroom showers incorporate the ultimate spa experience with rainfall showerheads and
massaging streams and tubs with whirlpool jets and waterfall faucets. Homeowners design their own bathrooms using
glass and porcelain tiles to complete the look. (National Association of Home Builders Home Remodelors Council)
“$400,000 or less”
With a few exceptions, here’s what you can reasonably expect in a $400,000-and-less home, as well as what you can’t
expect unless you pay extra for upgrades. The closer you get to the $400,000 price tag, the more the amenities.
What you can get

Stucco exterior – Asphalt shingle roof. – Front-facing garage that dominates the front facade.
Single or double doors with glass insets at front entrance. – Niches, arches, tray ceiling, recessed lighting.
Crown molding. – Eat-in kitchen; aquarium glass in breakfast area. – Walk-in pantry.
Wooden kitchen cabinets; Corian or laminate counters. – Separate dining room.
Den or home office that can be used as additional guest room.
Small secondary bedrooms with small closets (walk-in closets in some models).
Bathroom amenities, such as separate toilet room, garden tub, walk-in shower, double vanities.
Minimal allotment of ceramic tile; lots of inexpensive carpeting. – High ceilings (mostly 10 feet, but up to 15 in public
areas).
Two- and three-car garage. – Adequate laundry room with cabinets and sink.
Hurricane shutters and house built to new hurricane codes.
Mediterranean revival design, some Florida cottage and Craftsman bungalow influences.
Houses that line up close together on the street.
What you don’t get

More than 3,000 square feet of house, including outdoor living area and garage.
Kitchen amenities, such as two dishwashers, refrigerator drawers, fancy range hood, tumbled marble or mosaic backs-
plash, granite countertops, center island, gas range. – Kitchen appliances concealed behind cabinetry.
Bonus room. – “En suite” secondary bedrooms (i.e., each bedroom has a connecting bath).
Spacious entry foyer. – Marble, stone or hardwood floors. – Sky-high ceilings (15 feet and taller) throughout.
Fireplace. – Wine room. – Big closets. – Dressing room. – Outdoor kitchen. – Enormous rooms.
Lots overlooking a golf course, nature preserve, bay or Gulf. – Terrace, courtyard, loggia. – Tile roof.
Swimming pool and large pool patio. – Side-entry garages
Unique modern architecture (but you don’t get that in the luxury division, either).
A brand-new home for less than $400,000?

© Sarasota Herald-Tribune – Sarasota, FL

Chapter 6: Conquer Details Room By Room
and Save 20%
Readers Say
Time line: Eight months before groundbreaking “I had a friend
who was a
contractor in
SLC, a framing
Change Orders are Costly subcontractor, and
he said ‘I loved
it when we had
A
change order is an agreement to modify an original contract with a builder at vague plans and
contracts with cus-
an added cost. The term applies generically to those changes in the course of tomers, because
your project that change your original plans and increase your cost. we could bid it
low, and when
you get half way
You don’t want change orders. You want to get it right the first time because into it, you can
change orders are costly for these reasons: say ‘that’s extra’
because it wasn’t
on the plans.’
1. Do—Undo—Redo. Those plans are a
legal agreement
between you and
Many change orders result in three times the work. You do the design as the subs, and you
planned. That’s the first cost. You decide you don’t like it. You undo what you did, better have all the
detail you can on
destroying materials and running up labor. That’s the second cost. You redo the work them.”
in a different way. That’s the third cost. You’ve paid for the same item — family Ted & Regi M.
room, driveway, shower enclosure, whatever — three times. Monroe, UT

70 • Chapter 6: Conquer Details Room By Room and Save 20%
Sources Say 2. Short Notice.

“Each hour you
spend figuring out
what you want The affected item must be changed right now. It stands in the way of other
and how to do it work. The interest clock is ticking. The schedules of the subs are on hold and beckon-
before you start
will be worth two,
ing. You’ve got to move now. You can’t give the item adequate competitive bidding or
or maybe ten, shopping time. You have no recourse but to pay top dollar.
to you once the
project is under
way. During con- 3. Tip of the Iceberg.
struction, changes
cost more than
they would if Once an owner starts doing change orders, it’s just the tip of the iceberg. If
included on the one thing needs to be changed now that the owner thinks about it, other things also
original drawings need to be changed. The change orders are a sign that planning was weak on the
or specifications.
Disruptions cost project overall. There is dissatisfaction with many items. But the impatience of the
dollars. It is also subs and the unavailability of new and different materials or craftsmen to effect the
far easier for change limits the process. The result is that many desired changes are foregone. And
everyone to agree
to guidelines and the owner is unhappy with the house, the greatest single investment of his or her
constraints ahead lifetime.
of time than when
the crew is waiting
around for instruc- Some changes are too late to be done right, as with the master bathroom in
tions.” one house in the Midwest. The owner decided belatedly to add marbled walls and
From The Well- mirrored ceilings to a sumptuous master bath. The weight of the room became tre-
Built House
(See page 263) mendous, and out of proportion to the footings and foundations already in place.
The house sagged, the walls cracked, and a legal fight over responsibility ensued.
Forums
$$$$$$$$$ And For many general contractors, change orders are a way of life, and a steady
so it begins! What
exactly does source of income. This group gives short shrift to planning, and hurries to break
an architect do ground for their customer. When the change orders arise, they are “the customer’s
anyways? I pretty fault”. The contractor gets the business because he bid it lower than a competitor who
much designed
my own house included everything and who provided for some planning time. But he ends up at a
plan – I sent it to higher cost than the “up-front” competitor. And the customer winds up stressed and
an architect who dissatisfied.
then basically
put it in blueprint
format and told In my survey, most of the contractors admitted that change orders arise
me to get it engi- on all of their projects. The average of all contractors surveyed was a five percent
neered. I paid a
pretty hefty fee just increase in original estimate.
to have them take
my design and Industry expert Ron Horne says that change orders actually add 20% to the
put it on paper. I
did not expect the cost of a custom home. When contractors only admit to going over by five percent,
engineer to ask who is right?
for an additional
$3,000! Is this
normal? By the time a project goes over budget by five percent, all the “slop” in the
budget has been consumed. Suppose there is a ten percent contingency budgeted for
I did not research the unforeseen. That’s used up. Say that everything from concrete to roofing was
my architect –
They were highly estimated a little conservatively, maybe five percent over. That’s used up. The owner
recommended loses any remaining flexibility to divert unspent funds to upgrades and extras. The
and I am happy project is over budget “only five percent” but nobody’s happy, except possibly the
with my design
– I just didn’t contractor.
realize I would

Chapter 6: Conquer Details Room By Room and Save 20% • 71
The contractor still makes his planned profit. If the project is getting a little be putting out that
tight and his profits are threatened, he can make it back with interest on the change much more for an
orders. The profit margin on change orders is widely regarded to be much more than engineer! Once
again I must ask
on the original estimate. You are under the gun, everything is rushed, and there’s a – Is that normal?
real potential for contractor profiteering. What kind of
prices have my
fellow owner-build-
This is one of the places where the value of owner-building becomes clear. ers put out for their
You control the planning, and thus control the change orders. You use the slop in house plans and
your budget for extras or you keep your savings. You have the satisfaction of getting engineering????
exactly what you know you want in your house, all at fully competitive prices. I know this is to
be expected – lots
Custom Builder Magazine reported that custom homes go over original budget of unexpected
or higher than
by an average of 12% to 19%. On a $500,000 project, five percent is $25,000; 20% is anticipated costs,
$100,000. If your planning saves $100,000 on your house by averting change orders, but I think I am still
you get the “Dime Saved is a Dollar Earned” equivalent of $1,000,000 in salary for a little surprised
******
your effort.
I’m beginning to
feel “taken” by my
architect. I figured
How Specs Save You Money and Get You a Better that when we
hired him to draw
House up our plans that it
would include all
of our engineer-
A “spec” or specification is a comprehensive written advance description of ing. Most of the
the details of your project. Let’s look at the components of the definition: timberframe com-
panies I looked
into on the Internet
1. Written. provide plans that
include engineer-
ing for around
Because specs are written they force you to think. As Anne Morrow Lind- $600.
bergh said, “Writing is thinking.” Once the spec is in writing, you can engage others
in the process of that thinking. For instance, you can photocopy the spec and mail This kind of feels
like starting over!
it to different vendors for suggestions or prices. If you have the written spec on your Back to square
computer, you can fax from the computer or email excerpts from the spec to vendors, one.
subs, designers — anyone involved in your process. Angela in Lake
Helen, FL
Angela – you
2. In advance. were not taken
by your architect,
Since specs are created in advance, they provide all kinds of opportunities to you were taken by
your lack of expe-
save. With written specs and time to respond, subs can produce far better estimated rience. That is why
bids. The sub can be more accurate and more thorough, and can take advantage of this website exists.
the power of planning. You can engage the sub in the process of “thinking through” Your architect did
what you asked
a better house. him to do. It’s not
his job to tell you
Say you specify higher foundation walls than usual in your concrete spec that you will also
need engineer-
because you want a nice high basement ceiling. One of your selected concrete subs ing. Our engineer
calls while preparing the bid and says that he will have to rent oversized forms to do did not tell us we
it, at a much higher cost than usual. Are you sure you want the high walls? would have to
pay for truss engi-
neering. Very few,
You assure him you do, and he asks if you have considered an ICF system. if any, people will
It would cost a bit more, but the walls could be poured to any height, with a stay-in- volunteer informa-

tion in this indus- place form that is made of rigid foam insulation. The insulation means you will save
try. You may have on energy bills for the life of the house. You take the suggestion, make adjustments to
to pay for more
engineering if you
the budget, and rejoice over the improvement in design.
choose alternative
materials. The detailed specifications make the work go smoothly once construction
I know it is hard to
begins. The subs have the right tools, the right materials, and the appropriate crew to
delay a dream, it get the specified job done. There are no false starts and no disappearing subs due to
is also hard to pay inability to complete. There are fewer questions and delays. The sub knows this and
for our mistakes.
If you haven’t
you get lower bids. You save money during construction because there is no rework,
already done so, there are no changes, and the job is finished surprisingly fast. You attract good subs
study The Owner- because they prefer planned projects like yours.
Builder Book. Go
on websites like
DIY and HGTV Another benefit of advance specifications is that it permits you to separate
etc., and learn materials from labor on your project. This helps in two ways. First, you get the privi-
more about the
building process.
lege of choosing the materials and components you want rather than those that are
It is complex and standard or the sub happens to like. Second, you have the opportunity to hunt for
complicated. You bargains. You have plenty of time to reflect on the advice of suppliers and find the
need to under-
stand the materials
chosen items at the best prices. You don’t miss out on good deals that may require
and processes longer lead times.
before you begin
building.
3. Comprehensive.
All of us have
made mistakes
and paid for them. Your spec incorporates all the aspects of your project, including those which
You can recuper- could clash with each other. No decision is made on its own basis alone, or “in a
ate from this. vacuum”. I call this “systems thinking”. Each aspect of the project is made to comple-
Lyn
ment the other aspects of the whole system.
Just a simple
example, my next- For example, if you know in advance that you want elaborate crown molding
door neighbor is
getting ready to in certain rooms, the framers can provide the proper backing for the molding before
close on his house the sheetrock is hung. The finish carpenters install the crown molding easily and
later this week well and it stays perfectly in place. It is easy to caulk and paint, and no microcracking
(almost done), and
he just realized occurs. You enjoy a better product for years to come.
he has no phone
lines. While
phone placement
would not nor- How to Develop Room by Room Specifications
mally be included
in the plans, basic
electrical specs When you apply for a construction loan, your lender will want to see written
and scope-of- specifications for your project. (See Chapter 11.) The ones furnished by your house
work should have designer may not be sufficient or in the format the bank uses. Bankers have various
included that the
electrician runs forms for specifications. Following are three examples of foundation concrete speci-
the low-voltage fication forms that bankers use.
(phone and/or
cable), otherwise
they will leave
this out of their
bid. Since he has
no phone lines, I
would guess he
has a minimally
code-compliant
install (and since

Sample 1 this is basically

a spec house,
probably a good
assumption). Your
electrician needs
Foundations to know what type
of light fixtures
Footings: concrete mix _______; strength: psi ________ reinforcing _________ you are using,
where you want
Foundation wall: material ________________ reinforcing _______________ them, where you
Interior foundation wall: material _________ Party foundation wall: __________ want ceiling fans,
that you want a
Columns: material and sizes ______________________________________ pathway of light,
Piers: material and reinforcing ____________________________________ kitchen appli-
ances, laundry
Girders: material and sizes _______________ Sills: material _____________ appliances,
Basement entrance areaway: ____________ Window areaways: __________ special electronic
gear such as an
Waterproofing: ____________________ Footing drains _______________ entertainment
system, outside
Termite protection: ___________________________________________
lighting, security
Basementless space: ground cover ______________ insulation ____________ lighting, etc. All
of this is above-
Foundation vents: ____________________________________________ and-beyond basic
Special foundations: ___________________________________________ code minimums,
which is what
Additional information: ________________________________________ you will get
bid without any
specifications or
understanding of
exactly what it is
Sample 2 you are looking
for.
The same thing

Concrete Footings goes for the
plumber. What
Concrete footings for walls and piers shall be mixed in the proportion of one part are you using
cement, _______ parts sand and ________ parts gravel. Pit run gravel may be for your furnace,
used if its proportions of sand and gravel are as called for. All aggregate shall be hot water heater,
dryer, cooktop,
clean and sharp and free from organic matter. Coarse aggregate to pass 1 1/4-inch and oven? If you
screen and to be retained upon a 1/4-inch screen. don’t specify gas,
and how many
Footings for walls shall be _______ inches thick and ________ inches wider than BTUs these appli-
wall on each side: pier footings shall be not less than _______ inches square and __ ances have, don’t
_____ inches thick. expect that you
will get gas lines
in your low bid.
Does your house
use one of those
Basement Walls fancy new Roman
Tub faucets that
flow at 16 gal-
Shall be of _______________ construction, straight, plumb and level, and as lons/minute? If so,
shown on plans. All joints shall be struck flush on both sides. Beam fill as shown on you better have
plans. Basement wall will or will not be waterproofed with _______ coats of the pipe to supply
_____________________. this faucet and
you won’t get it
unless you specify
this somewhere.
There is no trade
exempt from
this. Does your

roofer know what Sample 3

underlayment, ice
and water shield,
shingles, and roof
vents you expect?
– If not you are Foundation
going to get 15-lb
felt and 3-tab Type: ( ) Full; ( ) partial __________x__________; ( ) crawl space; ( ) pilings; ( )
shingles. Does
your concrete flat- slab; ( ) other _____________________________________
work subcontrac- Footer: Depth ___________________; thickness ____________________
tor know what you
expect for slab French Drains: ( ) Yes; ( ) No; material ______________________________
thickness and rein-
forcement? Does Basement: Walls _________________ concrete block _________________
your tile installer poured concrete; ( ) reinforced; ( ) other ( ) outside entrance
know you want a
thinset install on Basement Floor: Concrete; ( ) reinforced; other _________________________
top of a decou-
pling membrane, Basement Drains: ( ) Yes; ( ) No; __________________ number; ( ) sump pump
and not mastic?
This applies to
all of the trades. All of the lender specifications I have seen differ in degree of detail, ease of
Provide plans with- use, definition of categories and scope. Some of them are daunting for an owner-
out specs, and
the low bidder
builder (like me) to complete. You can get help filling out a standard specification
will leave out like one of these if your lender requires them by calling any subcontractor and asking
everything beyond him how to interpret and fill out the banker’s form. They will help you and you get
basic code com-
pliance. When
exposure to a possible choice of a sub for your project.
you make your
decision based on Most of the technical specs for your project will be provided by your archi-
price point alone,
that is all you
tect or designer as part of your house plans. While the major technical details are
are going to get. covered by specs like these, they are insufficient in terms of explaining how to build
When you make the house you are hoping for.
changes realizing
you didn’t get
what you wanted For this purpose, your dream home notebook works in concert with the
and/or needed, technical specs. Compare the following typical standard specifications for a bath-
you will pay extra
for the change
room with my own dream home notes on bathrooms:
orders, prob-
ably more than
you would if you Bathrooms Specifications
selected a higher
bid that told you Total Baths: No.__ full __ three-quarter __ half __
how to do the
job correctly and Sinks: No.__ Type______ Make____ Color & Finish____
wouldn’t put their Spigots: No.__ Type______ Make____ Color & Finish____
name on a mini-
mally code-com- Toilets: No.__ Type______ Make____ Color & Finish____
pliant job. With
electrical and/or Bathtubs: No.__ Type______ Make____ Color & Finish____
plumbing, it is
usually easier to Stall Shower: No.__ Type______ Make____ Color & Finish ____
make changes to
fix your problems, Medicine Cabinets: No.__ Type______ Make____________________
but with HVAC
Vanities: No.__ Type______ Make____________________
and concrete
flatwork whole- Heater-Light-Fan No.__ Type______ Make____________________
sale changes are
extremely difficult.
Units:
If you provide a

Excerpt from Dream Home Notebook level playing field,

at least all the trades
know your expecta-
tions and can provide
the price it takes to
Bathrooms: meet them.
Kenneth in Lees
- Put blocking behind all the walls where towel Summit, MO
racks and grab bars will go. Also in the wall Sources Say
where tub will need bracing. 2x12” remnants from Appendix J of Be Your
Own Home Renova-
stairs are good for this and for drapery locations tion Contractor offers
over windows. good information for
defining trade specifi-
cations.
- Telephone in bathroom. (See page 263)
- Steam shower. Sources Say
“…engineers often
- Extra electrical outlets in bathroom. overdesign like crazy.
They hate the thought
of lawsuits, and who
- European bathroom fixtures that can be used as can blame them?”
From The Well-Built
hand-held. One knob controls. House (See page
263)
- Built-in dispensers for liquid shampoo, Sources Say
conditioner, moisturizing cream. Better Houses, Better
Living lists general
considerations for
- A place in shower to put towel so you don’t have floor plans, like “…in
to open door to get dry. a two-story house, be
sure to include a half-
bath downstairs.”
- Light fixture in shower that won’t rust and is (See page 263)
vapor-proof. Forums
What are some
- Have linen and bath supply closet in the ideas/shortcuts, IF
ANY, to bypass
bathrooms, oversized, floor to ceiling. going through an
expensive phase
with an architect OR
- Have a deep, wide sink to accommodate the designer to get an
splash of washing your face. approved houseplan
ready to be built?
- Have the “fountain-type” fixture in the sink that Can I just buy a plan
on the Internet that I
makes it easy to rinse your mouth after you brush, like and pay a drafts-
and converts to rinse your face after you wash or man to make modifi-
shave. cations that comply
with the local codes?
Have him approve
- Ceramic tile around tub. the plan and draft
the necessary details
to build the house?
- Provide access to shower and tub drains for Can this be done?
Any help would be
cleaning them out. appreciated.
Jim in WI
- Antique brass fixtures.

Sure, you can do that – if your

local building review/permit- - Build double joists under tubs for support.
ting departments allow it. Some
jurisdictions require an architect Insulate the open parts of the tub
to design the plans. You need to underneath to make it more comfortable
check before you buy.
and conservative of heat.
In any case, you MUST have a
structural engineer and a soils lab
to assess your site and design a - Have reading lights over the tub, angled
foundation for your house for that for reading in the tub.
specific site. The engineer will
more than likely hire the lab to
give them the numbers they need - Have plate glass mirror over the sinks in
for design.
the bathrooms, and use vanities with both
If you choose to purchase plans drawers and cabinets for storage.
over the net, let your other subs
review them for accuracy – electri-
cian, plumber, HVAC, carpenter. - Use quiet-flush toilets with 1.6 gallon
Your draftsman may or may not water-saver flushes. Have plumbing bids use
have the construction experience
to determine if something doesn’t simple white fixtures to compare apples to
‘look right’ about the layout. apples.
Make sure windows are properly
sized for egress, hallways are
wide enough, doorways are wide - Cable TV hookup plus telephone jack
enough, minimum headroom clear-
ance in and under stairs, return air because of possible internet connection
ducting doesn’t kill a closet, electri- through television. Have a GFCI outlet
cal meets code, etc.
nearby.
The ‘problem’ with internet plans
is that they aren’t designed for - Separated sinks and vanities in master
any specific set of building codes.
The disclaimers all over the plans bath with angles and height changes.
say to have them checked for
accuracy and for local codes.
You may spend more on getting - Use exterior door-type opening for an
your plans ready to build than if interior door with frosted side lites and
you took your ideas to a designer
and have them create your house transom to master bath.
from those ideas that meets local
codes. Or do it yourself.
- Have a gas fireplace in the bathroom,
Programs like 3-D Home Architect shared with the bedroom.
or its professional version Chief
Architect can produce an accurate
set of plans to national IRC code - Have a hot water radiant heat system in
that you can design and build the basement, and forced air on the other
yourself. That is, if it’s allowed.
Before you buy $1,000 worth of two floors. We can bring the piping up and
plans you will have to change at least do a staple-up system under the
anyway, explore designing most
of it yourself. The changes you kitchen floor, bath floors, and main floor
make won’t cost you by the hour. areas of tile.
Hope this helps you out a bit.
Good luck. - Have a way to warm your towels in the
Jim in Austin, TX
bathroom, and to pre-warm the clothes you
Your best bet is to interview local are going to put on first thing in the
designers and find out if they resell
plans. The first person to pay for
morning. Could use a radiant
them pays for the design time, the

wall unit in bathroom like the “Runtal” brand second person to

that doubles as a towel bar. pay for them pays
for printing time
only – see what I
- Have the HVAC installer do all the vents, mean?
including bathrooms, laundry room, clothes There are several
dryer, stove, and range hood. local designers
I know who do
this. They typically
- Outside window in johnny room. Insulation make their money
on “modifications”
around bath vent fans for noise, or use remote fan to these stock
location. plans (or on devel-
oping new plans),
but if you can find
- How about a steam free mirror in the shower? something off-the-
There is a barrier-free sink arrangement available shelf from their
design portfolio,
for the master bath sinks. And these are extra-wide you won’t get a
sinks. Make all towel bars function as grab bars by cheaper set of
plans designed
specifying a rugged type of bar, and providing to meet local
adequate blocking in the wall. building codes
than this. You get
far fewer choices
From the notes you develop for each room and portion of the project, you than an internet
can extract notes for each trade (plumber, electrician, mason, ceramic tiler, etc.) that site however, so
you may have
will bid on your project. You ultimately have two lists: (1) Descriptions by room, and to review several
(2) Descriptions by trade. portfolios to find
what you are look-
ing for.
Kenneth in Lees
Architect vs. Designer Summit, MO
You need more than a design from a plan book when you build a home. Journal
The architect is
In most municipalities, the plans must be adapted to local codes and engineering the key resource
standards. You can bring sample plans to a local professional to have them adapted when building a
to local codes. Sometimes your design professional has a library of stock plans from custom home. I
got 4 bids for an
which you can choose at a reduced cost over custom plans. architect – 2 from
local resources,
Most owner-built homes rely on the plans of a house designer or “architec- 2 online – one
full-service, one
tural draftsman” who is not a registered architect. Most high-end custom homes rely minimal service.
on the plans of a certified architect. You are an owner-builder and you plan to build The minimal ser-
a high-end custom home. Which way will you go? vice bid was for
$8K – blueprints
only from some-
Traditionally you would go to an architect for more creativity and more art- one who would
istry. The designers are known for more practicality, buildability, and construction never see the plot
or be involved in
cost savings. The architects cost five times as much as the designers. (Average: 7.5% of the construction.
construction cost versus 1.5% of construction cost in my survey.) They spend more Full-service online
time on a project and charge higher per-hour fees because of their additional train- was approx.
$8/sq foot of
ing. They also must cover the cost of the additional liability insurance they carry in finished space. At
some states. this point we were
thinking of 6,000
sq feet or $48K.
If you are well-prepared for your project, you have browsed plan books to Local resources
find floor plans and elevations (exterior appearance) that you like. You have consid- – I had one that

made me feel ered your needs and preferences and have a well-developed dream home notebook
uneasy and his with room by room descriptions and sketches of your ideas. You have earned your
full-service price first cash payoff for your planning work. As one architect told me: “If you come in
was $48K. The
last one (that I had and know what you want, you don’t need me that much.” You can use a designer and
gotten the referral save about six percent of your construction budget.
for) started at $8/
square foot – but
I wanted a fixed In our case, we used a designer with stunning results. Elaine had a very good
price. We ended eye for what she wanted. The result was a good dialogue which drew on the designer’s
up at $65K skill and his considerable experience to produce a special house. The cost for this
complete – this
was to include service was less than $1,500 — about seven-tenths of one percent of construction
the plans, all costs.
structural including
numerous retaining
walls, base- The next time we build, however, and step up again to a very high-end house,
ment, driveway, I think we will use an architect. In the process of telephone interviews with architects
drainage plans, we found one who was both brilliant and economical, an irresistible combination.
landscape plans,
energy calcula- This architect is at a distance of 500 miles from our community, but the savings are
tions, etc. required so great that we plan to fly to his location for meetings.
for plan check.
While this sounds
like a lot of money There are subtle design factors that mean more in a high-end home. Con-
– I have found to sider the interview comments of architect Douglas Long, AIA:
this point that it is
a great bargain.
I shudder to think “A trained architect has a better sense of perspective and design balance
of where I’d be... than a designer. We are more concerned about the psychological effect of the
confined space. Sociologically, it can be shown that environment has an effect on
Sources Say
The Well-Built our behavior, like the effect of the beach, the woods, running water, etc. We spend
House has a a lot of time in our houses. It should be taken into consideration. Owners should
good section spend as much time thinking about their house as they do about their car. Some
on remodeling,
some of the most of us like to go into our shells, and don’t feel comfortable doing that out in public.
pragmatic advice There should be a single space that is theirs. You can do it with change of ceiling
we’ve seen. height, a change of furniture, designate your corner in some way. Changes in the
(See page 263)
feeling of space. Some tight and you feel secure, some wide open and you feel
Sources Say loose.”
Habitat for
Humanity: How to
Build a House has How To Find a Good Designer
a section called
“Moneysaving 1. The best source is referrals from other owner-builders or from general
design ideas” contractors.
(See page 263)
2. You can look up designers in the Yellow Pages under “Drafting Services”,
Sources Say “Home Planning Services”, or “Home Designers”. Some designers will not
“Create your own be listed. You can call blueprint reproduction services, they will know some
plans. You’ll do
this by drawing appropriate designers in your area.
your sketch, to
scale, then hiring 3. Call and make the acquaintance of the designer or architect on the phone.
a professional to Ask for references.
convert the draw-
ing into a set of
working plans.” 4. Ask the references about cost to construct, livability of design, resale
From Build Your value — any of your concerns.
Dream Home for
Less 5. Go to the designers or architects and view their portfolios of past projects.
(See page 263)
Ask about costs and time involved and current availability.

...had I gone with

Architect and Designer Comparison someone else.
Working with the

ARCHITECT DESIGNER architect should
be a give and
• Average 7.5% of budget. • Average 1.5% of budget. take. I had initial
drawings going
• Involved in details of construction. • Doesn’t visit construction site. in, and we have
spent approx 3
• Assumes some liability — carries • Assumes no liability. months getting the
“errors and omissions” coverage. floor plan and ele-
vations ready to
• Develops a written “program” of • Relies on your preparation. submit to the city.
your needs and preferences. My mother (the
designer) helped
• Designs special spaces and cre- • Works from floor plans and eleva- tremendously by
looking over the
ative structures. tions you like. floor plans and
determining things
• More artistic. • More technical. like traffic patterns,
• Doesn’t want you to have precon- • The more prepared you are, the furniture size
and placement,
ceived notions. better. room envelopes,
light and noise
• More training. • More field experience. concerns, etc. I
HIGHLY recom-
• Required to “seal” your plans in • Not authorized to “seal” plans in mend getting a
some states. some states. professional in
this area as well.
• More attention to aesthetics. • More attention to buildability. They will point out
things that you just
• Higher construction costs. • Lower construction costs. know would have
bugged you for-
ever had you not
fixed them in the
plans. Examples:
I had a breakfast
nook sticking out
You Are Ready to See Your Designer the side of the
house – original
size was 10x10,
If you use an architect, you will pay for his attention to details. One architect back side open
explained: “You make 20 or 30 decisions for just one interior door. If I make all of to the kitchen
those you could spend lots of money. But you can make many of the decisions.” – French doors
on 2 sides – front
was glass with
If you are following the recommendations in this book, you will be very pre- city view. Sounds
pared to work with a designer. Architects ask for very little preparation. A woman decent – looked
good on paper.
architect told me that if you bring a favorite article of clothing to the session, or a Now figure in
favorite personal object, she can determine your preferences and design from there. your furniture – a
5-6’ round table in
the middle – this
You can save the additional cost and go to a designer if you have done your gives you about
homework. Bring as many of the following items as you can to the first session. Each 2’ on either side
one saves time or enriches the design product. for someone to
sit – not enough
room – and those
French doors?
Forget about ever
opening them
– the traffic pat-
tern just doesn’t
work. We liked

the nook but expanded it – 17x10 – French doors Items to Bring to Your Designer
have 17’ between them – now you have a 6’
table and 5+’ for chairs on each side – more
than enough room to sit and have someone walk 1. Your dream house notebook and album includ-
behind you. There are MANY other examples ing photos of houses and details you like — or
like that where something looked good on paper, dislike. Label your photos with explanations.
but would have been disastrous in practice.
Assuming you’re building to live in – find an
expert in this area – save your money elsewhere. 2. Site survey or a plot plan of your property.
After much back and forth – we have come close 3. Ideas on size of house.
to finalizing on a design – approx 1,600 sq ft
basement, 4,075 first floor, 4,319 second floor, 4. Rooms to include, their size and description.
800 attached garage. Given this – you can see
the value in a fixed bid – at $8/sq foot – I could
have easily paid $15K+ more! 5. Idea of your budget.
Alan in La Habra Heights, CA
6. Idea of level of finish: builder-type, spec home,
Journal or custom with high-end finishes.
Wednesday, June 1st:
More progress! We have our (second) initial
meeting with our designer on the 24th of June. 7. Pictures or video of the lot with depictions
He will take us through the entire process, start of orientation, relation to neighbors, view.
to finish, including sealing the plans (structural
engineer thing) for the windload certification, etc. 8. Sketches of elevations and floor plans or lay-
We have a general idea of what we want, both
outs you like.
form and function-wise, so that should help. A list
of a few things that are important to one/both of
us (extra credit if you can guess who wants what) 9. Any item preferences you have that may be
1. oversized garage with workshop area and non-standard. For instance, a two-sided kitchen
side (east) entry sink is 36 inches wide. If you want a “three-
2. Master Bedroom on east side of house with
east/rear windows sided” sink with the food disposer in the center
3. large covered patio (sort of closed in on 3 bowl, it takes 42 inches. A standard kitchen
sides by house) range is 30 inches wide, but if you want a com-
4. summer kitchen (outdoor kitchen for you non- mercial-type range, the designer has to allow
fancy types) 36 to 42 inches, depending on the model.
5. rec/game/theater/multipurpose room
6. walk-in pantry/laundry room
7. peninsula-style kitchen (not necessarily con- 10. Stock plan books with design selections you
nected to wall, but you get the idea...) have made.
8. 9’4” or 10’ ceilings
9. pool/mud room bath (we’re not building a
pool, but an indoor/outdoor bath would be
handy since we are planning to entertain on the Good Design Saves Money in Four
patio frequently)
10. LARGE great room rather than broken up Ways
spaces
11. study/den/library
12. lots of natural light in master bath Work with your designer to ensure that your
custom home meets your needs. Good design can give you
There’s probably tons more, but maybe as I think everything you want and save you money doing it. The
of them I can add them and then reference this
when we go to the designer... first way that design can save is on construction cost.
When we began this process last October,

we thought we’d buy some ready-made plans 1. Savings in Construction Costs
on the Internet, be out the door for just a few
hundred dollars, and be ready to build the
house. Not so. In Florida, they need to be locally •Enable proper bidding. Work the quirks out on
approved/sealed/etc. to meet code. The other paper rather than in the field.
issue with pre-made plans was that there were
minor changes (position of garage door, adding
•Keep walls simple and lined up.
windows) that would cost us several hundred dol-

lars per change. When we did the math, it made •Ensure that the design is easy to construct.
more sense to get it custom designed. This way, we
get a house that:
a) is well-suited for a lakefront lot •Organize spaces. A good design can organize the
b) is designed to be built efficiently (i.e. not lots of floor plans of a house in a way that the maximum use
bumpouts, dimensions of rooms for minimal material can come from the minimum space.
waste)
c) includes construction docs not included on
internet plans •Stay compatible with conventional construction tech-
d) we can say “custom” when we finally resell niques.
e) is uniquely designed for our needs (conducive
to entertaining, conversing, and cooking for many
people) •Use cost-effective and environmentally friendly materi-
f) has other things integrated that J wants, such as als. Use local materials and labor.
propane where needed or light switches in particu-
lar places
The list goes on. •Provide easy-to-understand construction documents.
At first, it took some convincing for J to see that in
the end, spending more money on plans would •Keep floor heights consistent through choice of materi-
be cost-efficient, but at our first meeting with the als, tile thicknesses, and underlayments.
designer, I brought a plan we were considering
and showed it to the designer. I asked him how
he might redesign it to save $$ and he was easily •Take into consideration standard material dimensions.
able to point out things that would save us several Plywood, sheetrock, framing, trims and components
thousand dollars on the building side of things.
come in two-foot increments.
From then on out, we were sold on the idea. OK,
enough for now... For those of you still getting to
know me, you now also have some insight into my •Eliminate change orders and additional work. Provide
personality by my almost obsessive use of lists, both detailed specs to reduce the unknowns, and assure
lettered and numbered ;)
quality control and craftsmanlike workmanship.
Sunday, June 19th:
Adding to the previous list •Assure site position is best for lot, reduces excavation
13. Tray ceilings and fill.
14. Leaning towards a 3/3 plus study/office/
library, plus rec room
15. pocket doors wherever possible •Use trusses where possible to save labor over stick-built
16. We don’t care so much about a big master roof framing.
suite. give us the space instead in the kitchen, study,
living and rec rooms, where we will spend much
more time •Take carpet widths into consideration so you don’t have
a lot of seaming.
Layout of rooms:
Ideally the garage should be on the southwest side,
but I’m not sure that will be possible with the septic •Orient rooms and spaces to minimize hallways and
needing to go on that side... I’m going to generally maximize the borrowed spaces from room to room, as
speaking lay out some possible room locations in an open plan. This could reduce the necessary size of
using a grid – like this: your home.
123
456
789 •Place stairways in two-story homes to limit hallways
and reduce wasted space.
Ideally 1= rec room, 2=covered patio, 3=Mbed-
room 4=secondary bedrooms, 5=great room and
kitchen, pref in that order, 6=Mbath and closet •Reduce insulation cost by wrapping the inside of the
(if garage on SW, maybe even MBath reaching walls with plastic sheeting instead of using insulation
to front of house for light on 2 sides) 7=Garage/ faced with a vapor barrier.
Study, 8=Entry, 9=office/study/library
If in fact the septic placement prevents the garage •Use cantilevering (suspended support for parts of floor
from being there, flip flop 7 and 9 area) versus having the foundation follow every jog to
save on foundations and excavation.
I meant to go look at house models this weekend
but didn’t have time. Oh well, hopefully it’s too
early to need to do that anyway.

•Keep roof pitch below 7/12 (seven inches of

Thursday, June 24th: drop for every running foot) to make for lower
Designer: Dave called yesterday, he has come up
with several plans but they don’t match the eleva- cost and faster roof work.
tion he had in mind. So he’s going to work on it
a bit more. Then he’ll provide us with the draft, as The second area in which good design can save
well as each iteration prior; what he changed in
each one, and why. Awesome! We will have it you money is in the operating costs of the house, includ-
before Alaska. ing, but not limited to energy conservation.
I went to see a few house models last week and
plan to go to a few more possibly next weekend. 2. Savings in Operating Costs
Saw a 4br model around 2,500 sf. This reaf-
firmed our decision to go w/a 3br... We will be
able to make the secondary bedrooms bigger, •Save up to 35% in energy bills through optimum
and add space to the great room by doing so. A orientation on the site.
few things I wanted to make mental note of:
Don’t forget about soffit lighting when it comes
time to do electric plans. •Place deciduous trees for summer shade and
Recessed lighting in the shower stall looks pretty winter sun. Design window openings to permit
darn cool.
Stucco finishing on covered patio – how much, breeze to flow through.
say, to do arches between support columns, etc.?
Plant shelves in bathroom or other?
17x20 absolute minimum size for great room
•Use good quality windows to reduce air infiltra-
Think about walls and furniture placement too... tion and improve insulation.
Where will everything be situated in the great
room?
Definitely still like the concept of a pool bath •Choose maintenance-free materials and
adjoining a secondary BR (acts as a guest suite reduced-maintenance mechanical systems.
too!)
Will there be enough room somewhere to eat
inside? If we have a larger livingroom-type area, •Reduce cleaning costs with cleaner mechanical
this could potentially work. Otherwise, maybe an systems, reduction of dust-catching surfaces,
eat-in area of the kitchen that adjoins the great
and use of low-maintenance interior finishes.
room? Somewhere there needs to be room to
feed 12 people easily.
I love mitered glass eat-in nooks, but I think it •Reduce temperature swings and heating/cool-
would be too expensive.
Half walls could be an option for the “living ing costs with high mass building envelope like
room” area. It might make the place seem bigger. masonry, concrete, earth, insulated concrete
We’d be sacrificing soundproofing, but it could forms (ICFs), or solid wood (log).
potentially be nice. Good for entertaining, too, I
think.
13x18 is plenty for a Mbr •Choose exterior sheathing of brick, stucco,
Hallways are an utter waste of space!!!!!
cement siding, vinyl, or aluminum siding to
Kitchen layout is important – it has to be just right,
otherwise I will feel “crooked” while I am in it. reduce painting expense.
To-do list:
Research construction management software and •Use natural light to save lighting cost, for
pick one. example in bathrooms or master closet.
Research window costs and standard sizes.
Get up to date on owner-builder message board,
get a login and introduce myself •Use topsoil with high organic content to save on
Begin to find out how to get a street address lawn watering costs.
assigned (please, God don’t let there be any fees
for this...)
Get Orange-specific critical path, permitting, and •Save on hot water by efficient plumbing layout
inspection list to begin project management chart. and equipment choices.
Look into taking a construction class at Valencia
beginning in September.
•Save electricity by using efficient light fixtures
such as compact fluorescents and halogens.

Friday, June 24th:

•Select higher efficiency heating, ventilating100/15= and air conditioning So we met with
Dave Brauer
(HVAC) systems. (designer) this
morning to have
our initial meeting
•Lay out multiple furnaces and air conditioners or use zoned system to pro- – basically he
vide room by room control and save energy. just gets a feel for
what we want,
and we ask him
•Design wall and attic spaces to accommodate optimum insulation for lots of questions
energy savings. about how to
save money. He’s
going to go to the
3. Savings in Life Cycle Costs drawing board
and call us in
three weeks or so
A third area of savings furnished by good design is “life cycle” savings. These with a preliminary
plan. We’ll take
are savings that stem from eliminating or slowing down the need to replace the struc- the plan on vaca-
ture or its components. For example, you can pay 50% more for a premium food dis- tion with us and
ponder it, and
poser and extend its warranty from two to ten years over a standard model. Another then when we get
example is ceramic tile versus carpet. Installed carpet costs about $3 per square foot back we’ll have a
list of changes to
($27 per square yard). The expected life is 10 years. Ceramic tile costs about $7 per give him.
square foot and will last over 50 years:
It’s looking like
this: 2,400 sf
under air 3/2.5
w/a 3-car garage
100-Year Life Cycle Costs in Current Dollars (with one door
only), monolithic
slab, hip/gable
Carpet Ceramic Tile shingle roof, tilt-
wall construction.
Initial cost per foot = $3 Initial cost per foot = $7 Here’s a bit more
info on each of
$3 X 7 replacements = $21/foot $7 X one replacement = $7 the rooms-
Patio: Summer
Life-cycle cost = $24/foot Life-cycle cost = $14/foot kitchen and hope-
fully a pass thru
•Anticipate and avoid structural and layout deficiencies to promote long- from the indoor
kitchen, sliders to
term viability of house. interior
Kitchen: Range,
DW, walk-in
•Seek longevity and timelessness in concept and aesthetics. pantry, natural
gas appliances,
peninsula-style
•Choose upgraded equipment and materials for durability. Master suite: tray
ceiling, garden
tub and walk-in
•Coordinate electrical and mechanical systems for future flexibility. shower with no
door, single WIC
not in bathroom
•Choose features and design conveniences that will meet your needs for the Other rooms:
long term. Formal dining
room (a.k.a.
office/library),
•Plan the space carefully to avoid the need to add on as your family utility room w/sink,
changes.

hopefully half bath will be a pool bath, 2nd BR is sort of a 4. Lifestyle Savings:
guest suite
Livingroom: wet bar
Foyer: single front door w/sidelight and transom, 10’ ceilings The fourth area of savings that stem from thought-
except in kitchen/main living area, where they will be 12’ ful house design are savings in your lifestyle expenses.
Hmmm, I can’t think of what else. I love his past work, he tends
to design very open and casual spaces, which is what we Examples are:
want. He believes that the features we are asking for will make
for a marketable house, and after meeting with him, I def. think
that a 3/2.5 is a better way to go than a 4/3 – more room in •Plan rooms and doorways to accommodate
the living spaces, as opposed to small secondary bedrooms your furniture so you have no need to replace
we’ll hardly use. I will most certainly be on top of the picture
posting thing by the time the floor plans come in :)
furniture.
Thursday, July 28th: •If you use a health club, design in “club” features
We met with Dave yesterday – he gave us the first run of
the plans – surprisingly on BIG sheets of paper. I thought the like a home gym or whirlpool bath at home.
overall idea was okay, but he missed the boat on a few things Save on club fees.
– we need 3 BR, not 4, one front door, not 2, and 3 baths,
not 2. No problem. Part of the deal is that he will go back to
the plans until we love them. We gave him about 12 changes •Design a convenient and capable gourmet
to make to the plan. He should have the next run ready when kitchen and spend less on restaurant bills.
we get back from Alaska.
A few hours after we left Dave’s I get a call from Jason, who •Design a large, well-organized pantry. Buy in
has had several epiphanies regarding the plan and wants to
review them with me. One was eliminating the slider in the quantity at the grocery store and save on food
MBr (fine, but only if I get a French door instead – I definitely purchases.
want porch access from the MBr). The other was the place-
ment of the kitchen. To me, where Dave placed the kitchen is
BACKWARDS. Don’t ask me to explain why, because I couldn’t •Organize and equip your garage to wash your
if I tried. It’s backwards. It just is. So we had asked him to flip it car and lubricate your vehicles there instead of
around, but then Jason realized that by leaving it BACKWARDS
we could open up a wall to the dining room, where there commercially.
otherwise would have been cabinets. It will be much better that
way. So alls well that ends well. I’m going to have to figure out
what it is that makes it seem backwards – hopefully changing
•Equip your house with a natural gas concentra-
the placement of the peninsula will help with that. We shall tor pump that fuels a car adapted to natural gas
see. at about half the cost of gasoline. Or provide
Friday, August 19th: the necessary connections to recharge an elec-
Overall, we LOVE the plan. The first feedback meeting was tric hybrid car.
obviously helpful, because they really brought us back a good
product on the second go-round. We still have a few minor
changes to make; the pink and yellow highlighting designates •Provide kitchen facilities for canning and freez-
those changes. We’ll also be taking the back left corner of the ing garden produce to save on groceries.
house that is now not under roof and just enclosing it. It will
have a half wall, as will the bar area designated by the pink
line in the family room. On Wednesday, we should have three •Allow for a cool basement fruit room or root
sets of updated preliminary plans...
Cara in Orlando, FL cellar to extend the use of garden produce.
Sources Say •Design a home office that meets current or

The Complete Guide to Contracting Your Home gives math-
ematical formulas to figure how much home you can afford. anticipated work-at-home needs to save you
(See page 263) from renting elsewhere to run your business.
Sources Say
“The company or individual who draws your working plans •Provide a home theater system with capabilities
is an ideal source for an accurate takeoff (materials list for to share your MP3 and MP4 libraries and video
your house).”
From Build Your Dream Home for Less on demand and streaming video for the latest in
(See page 263) entertainment. Spend less for outside entertain-
ment.

Chapter 7: How to Get the Subs on Your Side Forums
OK, just a little
venting during the
building phase
Time line: Four months before groundbreaking here...
First met with a

guy yesterday
How to Find Good Subs who said he could
put stone over
our French drains
O
ne of the benefits of owner-building is assembling a team of outstanding (about 35 tons
over stone and
subs of your own choosing. To do that you will need to start with a list of pipe we already
candidate subs for your project. installed), install a
window well, and
backfill the founda-
Here is where the buyer must beware. You will want to deal with reputable tion a little. Cost
subs who have something to contribute. There is a risk that you might wind up with would be $1,600.
a very bad apple. One O-B told me:
Next, he would
also dig three
“You can get ripped off easily. Some subs are like animals. They live from utility trenches
week to week for beer money and their hands are rough and cut. One guy gave (approximately
40 feet long),
me a medium price on my septic system. He said he would save me money on provide the stone
materials if he could pay cash for them. He showed me a lower price than I could and sand, and
get, and I gave him the money. He disappeared after he got it.” backfill when lines
were installed for
$1,800 more.
On the other hand, some of the subs are unbelievably honest and profes- Total $3,400.
sional. A woman owner-builder told me:

86 • Chapter 7: How to Get the Subs on Your Side
This seemed a
bit high to me, “When you have a really good sub, you really appreciate them. Our marble
knowing the price guy, concrete crew, and finish guys were superb. The tile guy was the most respect-
of stone and that
neither of these ful of all. Some of them can get crude. When they are businesslike, you appreci-
jobs was a whole ate it. He said it was a pleasure to have had the opportunity to work for us. I will
day event. When recommend him to everyone. We had many wonderful craftsmen. They kept their
I called back to
ask if he could music low, and would notice a woman was there, and they were being nice to
do it for $3,000 each other, no foul language. That made me feel comfortable.”
cash, he said
no, that was his
bottom price and Your job is to preselect candidates for each of the team members you will
also, I would have need. Depending on your design, you will use a few or many of the team members on
to find someone this list:
else to put in the
window well! I
just explained that
was our budget Potential Team Members
for the jobs and
also there would
be a grading job 1. ICF contractor 24. Drywall finisher
in the pipeline
for spring, and 2. Lender 25. Painter
he said then 3. Independent inspector 26. Carpet and linoleum contractor
go ahead and
shop around and 4. Insurance agent 27. Hardwood flooring contractor
happened to
add, “I know you 5. Specialty metalworker 28. Cabinet installer
already talked 6. Appraiser 29. Finish carpenter
to so and so
and got a higher 7. House designer or architect 30. Countertop contractor
price. What do
you really know 8. Surveyor 31. Ceramic tiler
about excavating 9. Excavator 32. Construction clean-up
anyway? Shop
around.” YIKES! 10. Footings contractor 33. Asphalt contractor
So of course I am
steamed. 11. Foundation contractor 34. Sprinkler and landscape contractor
12. Concrete flatwork finisher 35. Gutter and downspout contractor
Thoughts?
Advice? How 13. Framer 36. Foundation plasterer
you’ve handled a
similar dilemma? 14. Waterproofing contractor 37. Trash hauler
THANKS! 15. Brick, siding, or stucco contractor 38. Portable restroom vendor
Jill in Elizabeth, PA
16. Electrician 39. Security service
The question
is really one 17. Sound, alarm, and video contractor 40. Fencing contractor
of identifying 18. Whole house vacuum installer 41. Window well contractor
your options to
determine the best 19. Plumber 42. Structural engineer
solution:
20. HVAC contractor 43. Concrete sawing
1) How many 21. Roofer 44. Water well or geothermal driller
excavators are in
your area? How 22. Insulator 45. Septic system installer
busy are they?
Do they have 23. Drywall hanger 46. Landscape designer
the equipment
needed for your
job? This all leads Consider this list in tandem with the list of suppliers in Chapter 9. You may
to hiring someone
else to finish the also wish to include an interior decorator on your team. You may have specialty trades
job for you. In my like ceiling specialties, stained glass, conveying or elevator systems, custom stair rail

Chapter 7: How to Get the Subs on Your Side • 87
installer, steel erection, lighting and low-voltage system design, house automation, locale, excavators
and others. for residential ser-
vice are all hourly,
even spec houses
Suggestions for Finding Subs and custom
house bids I have
seen include
1. Do not use the Yellow Pages. “allowances” for
excavation, and
not firm fixed cost.
2. Drive around to subdivisions near where you want to build, go in and ask who did There is a benefit
any job you like. You find small builders very willing to lend out their subs. That way to an hourly rate,
they keep the sub busy, because you are only doing one house. but there is a
downside if the
excavator is
3. Attend home and garden shows where you may meet subs that impress you. Some not especially
have booths at shows, particularly if they are pushing a new product. busy and tries
to “extend” the
length of an exist-
4. Ask people whose houses are recent and exemplary who performed the trades. ing job to fill in
the blanks. Please
note that although
5. Ask owner-builders in your community which subs they respect. I don’t like hourly
bids, I used this
6. Join the local Home Builders Association as an associate member. Attend HBA for several trades
and didn’t have
functions. Ask generals who they recommend. Get acquainted with subs who partici- any negative
pate in the HBA. If you don’t join, use the Association directory of members. experiences with
it (if you were in
KC area, I would
7. Seek out the subs who did the work on “Parade of Homes” houses you liked. Their have no problems
names may be listed in the “Parade” program. You can also call the general contrac- recommending
tors who entered the “Parade”, and ask for the participating subs. a great excava-
tor that charges
an hourly rate,
8. Ask the salespeople at the local lumberyard which tradesmen have good reputa- probably the most
tions. Same with electrical or HVAC distributor, plumbing supply, brickyard, con- honest hard-work-
ing subcontractor I
crete plant, roofing supply, etc. hired).
9. Ask each reputable sub you talk to whom he respects in the other trades. Fram- 2) Can you rent
the equipment
ers know good foundation people. Footings guys know good excavators. Finish guys to do the work
know good framers and so on. yourself? This
equipment is not
that difficult for
10. Check your names with your state’s registrar of contractors and the Better Busi- someone with
ness Bureau. Begin with several names and find the complaints lodged against them. basic mechani-
They all have them. Pre-select the ones with the fewest complaints per volume of jobs cal skills to learn
to operate. If
or years of operation. you can rent the
equipment, you
also need to be
able to have it
delivered to your
site as even a
small skid-loader
is a fairly heavy
piece of equip-
ment, you won’t
likely be hauling
it very far with a
3/4 ton truck and
anything lighter is
simply too small.

In my area, I can How to Interview Subs

get the equipment,
however the rental
rates are high Before you lock in your plans and specifications with the designer, it is good
enough that it is to have input from the subs you interview. This helps as a “reality check” on your
not worthwhile for
me to get it with-
plans and sometimes introduces you to new ideas and technologies. At the same
out an operator. time, you lay the groundwork for selecting the subs who will bid your work.
3) Do you have
another source for
To interview subs, I recommend using a word processor so you can capture
the equipment, ideas and phone numbers easily and move those ideas to other files as needed to keep
or another trade your project organized. I interviewed over the phone and used a speakerphone so
that uses similar
equipment? For
that I could type. Later, I bought an inexpensive telephone headset at an office supply
example, my store for convenience. I surprised the people I interviewed by faxing or emailing
concrete flatwork them a copy of their interview direct from the computer after we finished. None of
subcontrac-
tors (I used two
them forgot me, and we both had a confirming record of their suggestions.
separate ones)
also used skid Don’t be afraid to interview subs in advance — they are going to become like
steers to spread
the crushed stone
employees to you, and they know that. It is free marketing to them when someone
base. While they calls in. Your call serves them notice that you are a conscientious builder. At the same
were out there, time, feel free to admit your ignorance to a knowledgeable pro. Subs appreciate that,
and I needed
some excavation
and you will grow in your ability to make educated decisions.
suitable for skid
steer, they were Create your own questions, or adapt the suggested questions on the next
more than willing
to do so. In one
page. Call in the early morning and early evening, or if you interview larger firms,
case, my concrete during business hours.
flatworker did
some utility trench
work. In another,
he left me the keys Detailed, Accurate Bidding
to the skid steer
so I could use it
after hours (he Make sure you allow time after you get your plans and specs from the designer
was trying to sell to get detailed, accurate bids from subs. With your plans, specs, and room by room
it anyway; I might and trade by trade descriptions, you will make it easy for the subs to bid. The subs can
have been a pro-
spective buyer). see just exactly what it will take to do your job. They won’t have to pad their prices for
Don’t simply uncertainties.
limit yourself to
excavating sub-
contractors when You will ask for detailed bids that provide breakdowns of approaches, mate-
you are looking rials, and labor steps involved. You want this kind of detail so that you can compare
for excavation one sub to another. If two subs come back with one-sentence bids that say “Concrete:
equipment, as I
know some plumb- $7,200”, you don’t have much to go on when you make your choice. You want to know
ers who routinely how many yards of what concrete mix at what price are included. You want to know
do underground how they are going to form the concrete, what reinforcing is included, compressive
work and have
their own equip- strength, and how long it will take. Will they commit to a start date?
ment, as well as
electricians who Ask the subs if they usually supply the materials. Then have them make esti-
also have excava-
tion equipment mates with materials and labor broken out separately. You need to compare their
(for service lines). material costs with what you can get them for yourself. You have to be careful of what
Additional sources they are including, and what level of quality each component is.
include swimming
pool installers
and landscape You ask for further suggestions. This allows you to turn up those who really
companies. Be want work, and those willing to work for O-B’s.

Questions for Subs creative and look

beyond excava-
tion subcontractors
Name: Phone: Date: – the key is to find
a subcontractor
with the equip-
ment who isn’t
Q: What do you suggest for a good job? busy (e.g. a swim-
ming pool installer
or landscape
A: contractor in the
middle of winter).
Q: What do you do that is better than other subs?
4) Obviously you
have two other
A: options to com-
plete the work,
one at a higher
Q: What do you need to do a bid for me? price than what
you were plan-
A: ning on paying,
and one with a
subcontractor that
Q: Can you give me an idea about cost? is now upset that
you are shopping
him. I really don’t
A: like that my sub-
contractors discuss
Q: What can be done to save money? specific jobs and
bids, to me this is
somewhat a con-
A: flict of interest and
undermines the
whole process,
Q: Is there anything we can do in the way of labor or in purchasing our own not to mention
materials to save money? starting with dis-
trust before work
is even started.
A: Good luck.
Kenneth in Lees
Q: What coordination is needed between this and other trades? Are there any Summit, MO
tradesmen you particularly like to work with? Thank you for your
help. I really liked
A: the part about
not only consider-
ing excavators.
Q: What do I need to do to make it easier for you? How true! I have
found that out in
other trades/situa-
A: tions so far, and I
really should have
Q: What are your scheduling requirements? thought of that. I
am going to get
started on that
A: research tonight :)
Jill in Elizabeth, PA
Q. How big a crew would you put on a job like mine?
A template for
sub interviews is
A.
also provided in
our Free Download
Q. Do you personally do the work? Gallery

Sources Say A.
“Don’t suggest that
you are looking
for a bid ‘in the Q. How experienced are those who will work on my job?
range of $5,000.’
If you do, the
subcontractor A:
will probably bid
around $4,900
when he may Q. How long will it take to complete your work?
have been willing
to do the work for
$4,500.” A:
From Everything
You Need To
Know About Build- Q. Will you guarantee your price and schedule for me?
ing the Custom
Home
(See page 263)
A:
Our subcontractor Q: Do you carry Workmen’s Compensation?

interviews for
the Riverbottoms A:
house are
included in our
Q: What about errors and omissions liability insurance?
Special Reports
book.
(See page 257) A:
Forums Q: Right now we are projecting breaking ground Sept. 25th. Is this good for you?
In this industry
you have to know
what you are A:
talking about if
you want them to Q: Do you have any other suggestions?
take you seriously.
We had to do
many hours of A:
research before
ever talking to
any potentials on Q: How can I contact you? Work, Home, Cell Phones, Email, Fax number, address
products we were for sending plans?
interested in. Not
all companies act
like this though, A:
you have to feel
them out. We had You can isolate those who are willing to do labor-only deals. If they are willing to
lots of questions
for some of them talk further, you can ask them some additional things, such as, who do they recom-
and they were mend for other subs, and particularly who would they prefer to work with that affects
very helpful. In the their trade. Are there alternate approaches, new technologies, ways to save time or
end, the ones who
helped us the most money they might suggest? The best of your interviewees, those you felt the best
are the ones we about, become your bidders.
ended up with.
Go figure...
Give them lots of time to prepare detailed bids — you get the benefit of their
I can honestly tell thoughtful consideration this way. Allow yourself plenty of time so you can follow
you I deal with up with them and continue refining your plans and tightening your budget: “Why
people differ-
ently in business are you approaching it this way?” “Why are you charging so much more for this item
than I did over a than the other sub?” “Can you suggest a place to get good prices on this or that?” “If
year ago when I pay you quickly, or in cash, can I get a discount on your bid?”
I started this all.

You want detailed, specific bids. This makes them think, which you want, I have learned
and it reduces your vulnerability to change orders because of items they have forgot- so much about
ten or you haven’t considered in the beginning. how to handle
these people in
the industry and
make them respect
Get Three Bids from Subs on Each Item you. You make the
decisions because
you will pay the
I was shocked when I started to gather bids from framing subcontractors for salary. All it takes
is some back-
our house. I had a preconceived notion from interviews and research that framing ground research,
labor should come in around eight percent of our construction budget, or $15,000. politeness, and
The first bid I got was $22,000. The second was $19,250. Better, but far from fitting some firm talk.
Once they know
our budget. The third bid came in at $31,250. you are on board
and not wasting
Now I was worried. I decided to look harder. The local lumberyard recom- their time, its a
cakewalk.
mended two people I had not checked, and the first one came back with a bid of
$14,200. I had to be honest with myself and admit that this framer was inexperienced I used to call com-
and probably not qualified to handle our house. Then the second bid came in, from a panies that I had
no interest in just
very qualified and bright framer. I interviewed him and had more confidence in him to practice conver-
than any of the others. His bid was $15,300. He turned out to be possibly the best sub sations and learn
I found. the lingo before
calling the one
I really wanted.
Your first defense against paying too much is to have an educated guess about Emails work, but
what the cost will be. Then you know if you are hearing baloney from your bidders. nothing can beat
a live conversa-
The second is to have several bidders. In this case, I sought five bids. If my top choice tion. Secondly,
had bailed out, I would have had a back-up plan. I think I would have taken the bid there are a lot of
of $14,200 and watched the framer closely rather than pay exorbitant prices. stupid people out
there working for
these companies.
It is usually wisdom, however, not to take the low bid. You must examine it I must have used
carefully because of the tendency of some to “lowball” a project and extract change the word ‘pathetic’
so many times
orders from the owner later, resulting in much higher costs. Some of these contrac- while describing
tors also do poor work and expose you to the potential of rework to make it right. my conversations
I had with them.
It’s amazing
I learned from those five framing bids that the differences can be huge. In many are even in
this example, the low bid of $14,200 was 55% less than the high bid of $31,250. If business. The con-
you only get one or two bids, you may never turn up the potential discounts that struction industry
is probably one
are available. Owner-builders I interviewed gave me many examples of the range of the dumbest
between low and high bids on identical specifications. For instance: industries out there
(30% intelligent
people, 20%
“Plumbing, one at $6,750 up to another bid at $11,500.” “Concrete was from average, 50%
$8,750 up to $12,500, and all the bidders were licensed contractors.” “Siding: dumb), yet they
$5,625 versus $11,250.” “Air conditioning: $7,500, $11,250 and $12,500 bids produce so much
money, but only
for the very same thing.” “Electrical: $6,500, $10,000 and $11,250. I took the because most of
$10,000 bid because the $6,500 bidder didn’t have good references.” “Dry- society thinks that
wall, $11,500 to $28,000.” “My electrical came in at from $12,000 to $36,000; they could never
possibly manage
stucco was from $33,000 to $57,000.” building a house
or doing anything
Bid examples furnished me by owner-builders showed the low bids to be an in construction.
Well, that’s prob-
average of 34% less than the high bids. Some O-B’s miss out, however. Those I inter- ably true to some
viewed for the first edition of this book got less than two bids for each specialty. I’m degree, but it

also boils down happy to say that current O-B’s in our survey got 2.62 bids for each trade. Those who
to people who read The O-B Book first got 29% more bids than those who didn’t.
are rich, scared,
lazy, incompetent
or someone who Why don’t owner-builders take advantage of potential discounts and get
really does not more bids? One reason is the human tendency to rush to judgment. We like the
have the time.
If you are not in
first price we hear, especially if we aren’t equipped with an educated guess of what it
those categories should cost. A second reason is that some owner-builders are in a hurry. They leave
than you have only a few days to gather bids in their haste to break ground on the project.
no excuse to try
something like
this. Don’t let them I discovered a third reason when talking to a construction industry veteran:
discourage you. “Subs make a habit of keeping you from getting more bids.” They can do this by
It’s how they profit
so easily.
making the process awkward and time-consuming. Each sub wants a full set of your
plans and keeps them for two weeks. If you have 15 trades on your project, as I did,
I am in this to and you get three bids on each trade, that’s 45 bidders. To get it done in a month, you
prove something. I
will not lie.
would need more than 20 sets of plans. This makes it simply too daunting for most
Jason in Orlando, people in a hurry, and they settle for the first thing they hear.
FL
Sources Say
“Ask painters for How To Get Bids
names of good
drywall subs. They
paint over it and 1. Allow a full month to gather bids, and a second month to evaluate and
know good finish- negotiate.
ing work.”
From The Com- 2. Use the Plan Room concept. Set aside a spot at your home or office where
plete Guide to
Contracting Your the plans are available for review. Provide a table where the plans can
Home be spread out, and the sub can take notes and do calculations. Rather than
(See page 263) run yourself ragged trying to meet subs and drop off plans all over town,
have the subs come to your “plan room”. Have on hand your dream home
Sources Say notebook for examination. Answer questions and make clarifications on
“Always get the spot. This way you will rarely have to loan out a set of plans.
references and
check out three on
each major sub. 3. Do what you can by fax and email. We had an inexpensive fax modem
You must see their ($125) installed in our computer. We were able to send and receive faxes
work.” direct to the computer, and view the fax on the computer screen. We took
From The Com- advantage of this by faxing portions of our plans to our home computer
plete Guide to
Contracting Your from an instant copy center downtown. We then had electronic images of
Home our floor plans on computer. We faxed the needed portions to certain subs
(See page 263) along with the written description we developed for their trades. They
were able to bid from this.
Sources Say
Habitat for
Humanity: How 4. Use an “RFQ” (a Request For Quotation) that summarizes the specs
to Build a House the subs will have to meet for a given category and provides the essen-
offers suggestions tial information. The RFQ instructs the sub to itemize material costs and
on how to check descriptions of components along with the estimate of labor cost in detail.
out and hire subs.
(See page 263) It asks for estimated time to complete, for references, and for any sugges-
tions the sub may have. Send it out in lieu of a set of plans to a large number
An RFQ form of potential subs. Using this technique, some O-B’s have been able to get as
template is many as ten bids on items.
available in our
Free Download The ability to buy “cafeteria-style” and select your own subs and suppliers
Gallery is the greatest leverage the owner-builder has for savings. You can’t take advantage

of it unless you get three or more bids on each item. After you make your selection, Sources Say
your additional bidders become back-ups to the chosen sub. If the first sub can’t start The Complete
Idiot’s Guide to
or finish the work for any reason, you can often plug in a replacement sub quickly. Building Your
Lenders look for this kind of back-up. Own Home has a
chapter on “Hiring
Subcontractors
Having multiple bids can have unexpected benefits. One second-time owner- and Laborers”,
builder asked the plumber from his first house to bid the next project. The plumber including the
functions of each
decided he was too busy to do it. The O-B got three bids from other plumbers. Then of the typical
the original plumber called to say, “I didn’t have time to bid your project, but I would subtrades.
like to do the work. Give me the lowest plumbing bid you got, and I will match it, and (See page 263)
throw in a free water softener.” Sources Say
Habitat for
Humanity: How to
Build a House
Follow Up Your Bids offers suggestions
on how to check
After you see the estimates, study them carefully. This is very valuable and out and hire subs.
(See page 263)
instructive. Summarize the line items of the comparable bids on paper or on a com-
puter spreadsheet as I did with the two insulation bids I received. I like to use a com- Forums
puter spreadsheet because it will automatically add numbers in a column for you and Okay, we have
gotten two bids
because it can be laid out much wider than on a single sheet of paper. In the following on site clearing.
example I have laid out two bids side by side for comparison. With a spreadsheet, you Both bids include:
could place ten or any number of bids side by side for your examination. Felling the trees
(approx 33 mature
pines, hickory,
Insulation Contractor A Insulation Contractor B oak, sweet gum)
Cutting into 10’
Item Description: Description: sections and stack-
Attic R-38 blown fiberglass R-38 blown fiberglass ing close to site
Chipping the
Exterior Walls R-19 Batt and poly R-19 Batt and poly smaller trees and
Inaccessible attic R-30 Batt R-30 Batt the branches from
Vaulted ceiling R-30 Batt R-30 blown and batt the larger trees
Stump work is not
Rim Joist R-19 Batt R-19 Batt included
Crawl space R-11 drape foundation R-11 drape foundation w/poly
on ground One bid is
Attic vents Cardboard baffles $1,300 and the
second bid is
Air penetrations Hilti foam Foam $10,000 !!!!!
Garage Walls R-11 Batt w/poly
Garage Attic R-19 Batt w/poly Now, how on
earth do we make
Total: $2,496 $2,348
sense of that?
While we want
Contractor A: Add: Options or upgrades: to have a good
Insulate garage $438 deal, we don’t
R-38 Batt in vaulted $95 want to make
someone lose
Net and blow fiberglass $700 money, either. We
Sound insulation in master and bath $110 did have our foun-
Wet-spray cellulose $1,000 dation guy say
that he thought it
R-11 floor $123 would run about
R-19 floor $196 $2,500 to have
the site cleared,
It was easy to select subcontractor B because he included everything that A but he said it was
just a guess.
did at a price that was $148 under A’s price. B also included garage insulation in his

bid, at no extra charge. This meant that B’s bid was ($148 plus
What would you do? We have the $438) = $586 under A’s bid. B’s bid was also better because it
$1,300 guy scheduled to start on included putting polyethylene sheeting as a vapor barrier on the
Monday (husband didn’t know I had
scheduled the second bidder for a look ground in the crawl space.
this afternoon). Both men walked the site
and saw the trees in person. Subcontractor B had not included anything for sound
Yvonne in Helena, AL
insulation in his bid. Subcontractor A explained to me the value
The second bidder is telling you that he of insulating the master bedroom and bathroom from the sounds
does not want the work. Throwing an of the living room and to keep bathroom sounds from traveling
outrageous number at a job is easier for
some contractors than saying “No thanks, to the living room. Since he had a price of $110 for the two rooms,
I’m too busy, don’t have the right equip- I called and asked Contractor B if he would match the price and
ment, etc.” add a third room for $55. This brought my total cost to $2,500,
Michael in Cave Creek, AZ
the number I had initially budgeted for insulation.
Yvonne, I would get at least a third or
fourth quote and compare apples to The insulation bids had worried us because there were
apples. Just to have a more accurate
range. only a couple of good subcontractor choices in town for insula-
tion. I budgeted $2,500 and when B made his original estimate
The second guy does sound like he does off the plans, he came in at $3,800. From interviews and research,
not want the work which is fine, but you
also want to be careful that the first guy I thought it could be done for $2,500. I called him and told him
knows what he is talking about. Because so. He said that he would rebid it when the framing was mostly
believe me the cheapest is not always complete so that he could better gauge the size of the job.
the best value! You also want to make
sure that he is not going to add another
couple hundred dollars because “I didn’t After I received A’s bid for $2.500 I called B back and said
account for that or I didn’t notice this.” that I only had $2,500 budgeted, that I had a bid for that amount,
Realizing that you cannot account for
everything but you need to have them and could he do it for that? He rebid it after measuring the fram-
spell what they are going to do and then ing, and met the price I wanted. What amazed me was that he also
review it so expectations are clear; and included garage insulation at that price.
if things change in price, make sure he
talks to you about them before any work
is being done. It pays to follow up your bids and negotiate. One industry
veteran pointed out to me that “this is a negotiated business”. He
With those mature tress especially the
oak, I would call a local or regional log- recommended the same formula that I used:
ging company to see what kind of money
you can get by selling the trees, they 1. Compare bids line by line.
might even take them off your hands for a
minimal cost. Just an observation.
Jay in Elkhart, IN 2. Choose your preferred subcontractor.
Wow – what a past few weeks just trying 3. Call and tell him that he is your choice but that you
to get our trees down! We called several only have so much available for his item.
lumber mills – they weren’t interested
unless I had several solid acres. The
original $1K guy came back and said 4. Ask “Can you do it for that?”
he missed “a few” trees and the price
would be $2,600. We negotiated him
to $2K and then messed with him for
When I got bids for concrete work, I noticed that the subs
two weeks while he got down 3 trees!!! figured differently the amount of concrete needed for footings. I
The downside now is that we have to spoke to my preferred sub and told him, “One of the other foun-
wait three weeks for our Superior Walls
because we waited too long to pull the
dation men says that only eight yards of concrete are needed, and
trigger on that! you say 13 on your bid. Would you mind if we just pay for what-
ever it turns out to be after you’re finished?” He agreed and we
Thanks for the GREAT suggestions – I
hope using the wood in the house works
saved $440.
out as I think that would be really neat.
Yvonne in Helena, AL

Chapter 8: How to Build a Budget That Is a
Sources Say
“The ‘Achilles heel’
of every construc-
Powerful Miracle Tool tion project is
always the cost
estimating. The
sheer number
Time line: Three months before groundbreaking of items that go
into the house
is staggering. A
computer can help
Start with Your Bids from General Contractors tremendously with
this problem. Don’t
E
even think of start-
ven though you plan to act as the general contractor, there is nothing to pre- ing a homebuild-
vent you from asking licensed general contractors to estimate your project. In ing project without
a slow market, you may find a real bargain and decide to let a general build it. a complete and
accurate estimate.
You may be forced by the unforeseen, say sickness or accident, to have a general build The bank will be
or finish your project. You may find a general that you use for a future project or rec- impressed with
ommend to someone else. For these reasons it is more than fair to take advantage of a well-organized
printout of costs.”
the free service that general contractors perform of bidding potential work. From The Com-
plete Guide to
Your bid from a general contractor can be tremendously helpful in planning Contracting Your
Home
your approach to the work, but only if the bid is thorough and professional. I insisted (See page 263)
that generals who bid my project include the following information:

96 • Chapter 8: How to Build a Budget That Is a Powerful Miracle Tool
Forums 1. Written cost breakdown or budget. You want to see each line item
I am looking at separately with its cost.
building in the
Sonora, CA area, 2. Who would likely perform each line item. You need this to compare
Looking for a sq ft
cost for 2,200 sq ft with other generals.
home with middle
of the road finish 3. Written calendar of completion. Tell them that you want to be sure that
work, I may do the they can complete within your six-month deadline, so you want to see
finish work myself if
how long they will take on each line item.
it will save.
John in Vacaville,
CA Challenge the generals who bid your project. Tell them that you will
John – I live part
either defer building, or you will build it yourself if his prices aren’t good enough.
time in Twain Harte Let them do the homework they are trained to do. This is an opportunity for the
about 2,000 ft. general contractors to try to “talk you out of it”.
elevation east of
Sonora and I’m
an architectural Lay out the bids from the generals on a spreadsheet by line item. This is
designer/drafter the first big step to building a budget that will save you a great deal of money on
dealing with gen-
eral contractors.
your project.
So, if you let a gen-
eral contractor bid You will be able to use the written line by line estimates that the general
the whole house
you’re looking at
supplies you in your subsequent dealings with subcontractors. If you don’t go to
more than $180 the same subs that a general proposes to you, you nonetheless can cite the prices
per sq. ft. But if you he offered you when dealing with other subs: “Thanks for your bid of $4,800. I
manage the job/
project yourself as
want to use you but I have another bid here for $4,000. My budget is for $4,200.
an owner-builder Could you do it for that?”
you can save hand-
somely. This means
that you contract
out the foundation Spreadsheet Budgeting
and maybe you
order the cement,
contract out the If you lay out the bids you receive from general contractors on a com-
framing, plumbing, puter spreadsheet, you have the best template you can find for your construction
electrical, drywall budget. It is specific to your plans and prepared by a person familiar with your
and so forth. You
save because local market and with current conditions. If you have several bids, you have the
you’re not paying advantage of multiple counselors. If one general says that footings are $5,000, one
the G.C. to sched- says $7,000, and one says $4,000, you have the average of their wisdom at $5,333.
ule and make calls
to his subcontrac- Your footings shouldn’t turn out higher than that. And you have a possible $4,000
tors. Also finding to contemplate. Maybe his sub will do it for that on your project. Maybe another
contractors/workers sub will match it or beat it. And if you get a bid for $3,700 from a sub, you know
right now is hard
to find because the you are looking at a low price.
Black Oak Casino
hotel construc- Using a spreadsheet can be magical fun. A computer spreadsheet orga-
tion is underway.
Not so long ago nizes items in rows and columns and keeps a running tally of anything you like.
you could build a If you make a change, the totals recalculate instantly.
house for $120 per
sq. ft.
Danny in Livermore, Say you have a list of construction costs like this one derived from the
CA Riverbottoms house budget:
I will be break-
ing ground on
our 2,800 sq ft.

Chapter 8: How to Build a Budget That Is a Powerful Miracle Tool • 97
home hopefully
EXTERIOR FINISH no later June/July
in the Lake Don
Roofing $4,840 Pedro Area which
is in Toulume
Vinyl siding/soffit mat’l. & labor $12,540 County. I do not
have a finalized
Gutter mat’l./labor $880 construction cost
breakdown, but
Deck mat’l./labor $3,080 my preliminary
number is showing
around $130 a
sq. ft. This number
PAINTING is building and
septic only, not
Interior painting (DIY) $1,760 land. I will be
doing the majority
of the work myself
as I have the time
right now. Playing
FLOORING general contractor
is a full-time job,
Ceramic tile $1,980 and if you work
out of town it can
Carpeting $5,720 be a daunting
task. One word
Wood Flooring $1,980 of caution; if you
don’t already
Total: $32,780 know, is that
Toulume County
is not allowing
septic systems on
Other costs: $187,000 some lots due to
poor soil and are
Overall Total: $219,780 even deeming
those lots unbuild-
Appraised Value of Plans $400,000 able. I would be
or Average GC Estimate: more than happy
to bounce ideas
Equity: $180,220 around with you,
so please feel free
to PM me.
Good luck and
You see that your costs amount to $32,780 for the selected items, and $219,780 happy build.
overall. With your house plans appraising at $400,000 you see that your equity in the Tyler in Lake Don
Pedro, CA
project will be $180,220.
Sources Say
When you make a change, the whole calculation changes instantly. Suppose “Except in rare
cases, the cost
you are expecting to pay $12,540 for siding, but you find a sub you like at $11,000. of the process
You correct one entry and the picture changes: of restoration,
rehabilitation,
or remodeling
EXTERIOR FINISH plus the cost of
the old structure
Roofing $4,840 should not exceed
the cost of a
Vinyl siding/soffit mat’l. & labor $11,000 comparable new
structure.”
Gutter mat’l./labor $880 From Be Your Own
Home Renovation
Deck mat’l./labor $3,080 Contractor
(See page 263)

Forums
Trying to get an
idea of what it
will cost in the
PAINTING
south to brick &
culture stone a Interior painting (DIY) $1,760
whole house that
is 3,400 sq ft?
Darlene
FLOORING
I was quoted $10
a sq ft here in TN. Ceramic tile $1,980
Total cost materi-
als and labor. Carpeting $5,720
Earl
Wood Flooring $1,980
In Atlanta, GA I
recently received Total: $31,240
a quote of $10.50
per sf for labor
and materials for
stone veneer. Other costs: $187,000
Bruce in Tyrone,
GA Overall Total: $218,240
Seems like $10 Appraised Value of Plans $400,000
psf is going rate.
I got the same or Average GC Estimate :
quote in Shap-
leigh, Maine. Equity: $181,760
Sybil in Leominster,
MA
Now your list adds up to $31,240 and your equity moves to $181,760. In this
The $10 per SF
number is per sense, the spreadsheet becomes an electronic window on your wealth. As you develop
square foot of your project and plug various numbers into your budget, you see the effects immedi-
surface area to be ately.
covered with stone
and is consistent
with the rate for I have worked with various spreadsheets since 1982. After learning my first
this kind of work in one, a product called Lotus 1-2-3™, I used various others with little or no change
Arizona. It seems
to me that the origin technique. We use Excel™ for our construction project, and I have used Apple-
inal question was Works™ and Quattro Pro™ spreadsheets with equal facility.
how much will it
cost to put stone
veneer on a house The spreadsheet is a magical tool that I estimate will save you five percent on
that has a livable your project all by itself. It serves you as a project budgeting tool in the beginning,
square footage then a tracking tool on actual expenses, as well as a construction shopping tool that
(heated floor
area) of 3,400 makes the implications of comparative bids and estimates become clear. The same
SF. To answer the benefit would apply to the use of an old-fashioned paper spreadsheet with your num-
question of what bers laid out in rows and columns.
it will cost to do
the whole exterior
in stone, use the A five percent savings could be worth fifteen or twenty thousand dollars to
elevation draw- your project. When you consider the savings in DSDE dollars, using a spreadsheet
ings on your plan
to scale the length could have the effect of $150,000 or $200,000 of salary on your net worth. It’s clearly
and average worth it to learn how to use one. Most people can walk into a computer lab at a local
height of each community college and with a little help lay out a simple spreadsheet in a couple of
wall to get the
exterior surface hours. You could take a class, do on-line training at a site like lynda.com, buy and
area that you study a manual, or learn through trial and error. If you don’t have a computer, you

could probably develop a budget spreadsheet on computer facilities at a nearby school want to cover with
or library and save it on a personal CD-ROM. You could return to make adjustments stone.
and revisions to your budget as you go.
You can also
do this work a
bit cheaper by
Riverbottoms House Budget splitting up labor
and materials.
Normally you can
A century and a half ago writer Henry David Thoreau owner-built a home in buy the Owens
Corning cultured
the country. He recorded his budget for posterity: stone product
between $5 and
Boards $8.03 1/2 $6 per square
foot from a local
Refuse shingles for roof and sides $4.00 supply house.
Laths $1.25 Once you have
the material on
Two second-hand windows with glass $2.43 site, you can find
One thousand old brick $4.00 crews (at least in
Arizona) who put
Two casks of lime $2.40 this material up for
Hair $ .31 between $2 and
$3 per square
Mantle-tree iron $ .15 foot.
Nails $3.90 Michael in Cave
Hinges and screws $ .14 Creek, AZ
Latch $ .10 Sources Say

Chalk $ .01 The Complete
Idiot’s Guide to
Transportation $1.40 Building Your Own
Home
includes a chapter
In all $28.12 1/2 on how to estimate
costs.
(See page 263)
We’re still doing construction budgets today, though they grow more com-
plex with the passage of time. Elaine and I developed a budget (shown on the next Sources Say
page) for our custom home through trial and error. We started with a bid from a Chapter 6 of Be
Your Own Home
general contractor which we entered onto a spreadsheet. We continued to refine our Renovation Con-
“guesstimates” of individual costs as we gathered bids from subs. tractor shows an
interesting system
for getting a “ball-
The keys to a good budget are: park” figure for a
remodel budget.
1. easily updatable on computer (See page 263)
2. accurate estimates of items based on detailed specifications
3. no major items omitted
4. includes a contingency fund for overruns
The recommended contingency fund for a first time owner-builder is ten

percent. This is the “slop” you allow for spending more than you estimated on the
project. If you have done it before, use five percent. On page 103 you can see that there
is no amount shown for contingency. This budget is our “as-built” budget – what we
actually spent after the dust had settled on our completed project. We had started the
Riverbottoms house with a contingency fund of $6,500. That was used up quickly,
and overall, we ran over our intended budget by about $25,000. We managed to scare
up the needed shortfall from cash and by a loan increase from the bank. Far better
to allow sufficient for contingency in the beginning. On a $300,000 construction

Riverbottoms House Budget
Description Percent % Amount Spent Notes

BUDGET LIMIT: 100.0% $220,000
INDIRECT CONSTRUCTION COSTS
Bldg. permit/fees 2.3% $5,060
Setup short-term financing 1.4% $3,080
Interest charges 3.0% $6,600
Plans and specs. 0.7% $1,540
Structural engineering 0.2% $440
Survey review 0.1% $220
Building lot
Course of construction insurance 0.2% $440
Supervision/overhead 0.2% $440
Misc. equipment rental 0.5% $1,100
Temporary/mobile phone 0.1% $220
Trash pickup 0.1% $220
Clean-up 0.1% $220
Temporary power 0.1% $220
Title insurance 0.5% $1,100
Other:
EXCAVATION/SITE WORK
Foundation excavation 0.2% $440
Finish grading 0.3% $660
Backfill 0.2% $440
Sewer/Water Trench 0.2% $440
Electric Trench 0.0% $66
Drain tile and gravel
Other:
MASONRY
Footings/labor & materials 2.5% $5,500
Foundation/labor & materials 2.0% $4,400
Rebar & steel
Waterproofing
Termite protection
Sand or gravel & placement 0.4% $880
Basement floor
Garage floor/labor & materials 0.6% $1,320
Walks and patios 0.1% $220
Driveway & other ext. flatwork 0.5% $1,100
Stoop, steps & ramps


Fireplace brick
Other:
SEPTIC SYSTEM
Well
ROUGH CARPENTRY
Framing lumber 13.2% $29,040
Trusses (incl.)
Framing labor 6.9% $15,180
Crane service
Windows & screens 2.2% $4,840
Skylights
Exterior doors 1.7% $3,740
Garage doors & openers 1.4% $3,080
Decks & porches 1.4% $3,080
Steel beams and posts
Other:
PLUMBING
Rough plumbing 5.4% $11,880
Fixtures & trim 1.8% $3,960
Other:
HVAC
Heating & air conditioning 6.1% $13,420
Other:
ELECTRICAL
Rough electrical 2.4% $5,280
Finish electrical
Fixtures 0.6% $1,320
Vacuum system 0.5% $1,100
Alarm system
Television pre-wire
Telephone pre-wire
Audio pre-wire
Other:
INSULATION
Wall & attic insulation 1.3% $2,860


Other:
DRYWALL
Drywall materials & labor 4.9% $10,780
Other:
FINISH CARPENTRY
Interior doors 0.9% $1,980
Moldings/stair rail/columns 1.6% $3,520
Finish carpentry 2.1% $4,620
Fireplace equipment 1.3% $2,860
Hearth and mantel 0.2% $440
Closet organizers 0.6% $1,320
Finish hardware 0.3% $660
Other:
EXTERIOR FINISH
Roofing 2.2% $4,840
Housewrap
Siding 5.7% $12,540
Stucco
Brick
Stone work
Exterior trim
Soffit & facia
Gutter mat’l/labor 0.4% $880
Chimneys
Wrought iron
Other:
PAINTING
Interior painting 0.8% $1,760
Exterior painting
Wallpaper
Other:
FLOORING
Ceramic tile 0.9% $1,980
Carpeting 2.6% $5,720
Wood flooring 0.9% $1,980
Vinyl flooring


Stone work
Other:
MARBLE, TILE & GLASS

Tub surrounds 0.7% $1,540
Shower doors, mirrors & glass 0.9% $1,980
Other:
LANDSCAPING
Sprinkler system 0.7% $1,540
Fill and topsoil
Seed or sod 0.2% $440
Trees and plantings
Retaining walls
Fencing
Other:
CABINET, COUNTER & APPLIANCE

Kitchen and bath cabinets 6.5% $14,300
Counter & vanity tops 2.8% $6,160
Medicine chests
Laundry cabinets
Entertainment center/built-ins
Kitchen appliances 1.6% $3,520
Other:
MISCELLANEOUS
Smoke alarms
Doorbell
Dryer vent
Foundation plaster
Attic fan
ON-SITE SUPERVISION
CONTINGENCY
Other:
Total Cost of House:

Building Costs: $220,506
Unspent Amount:

The Budget budget, the recommended contingency amount for a first time owner-builder would
Worksheet is be $30,000.
available on
a spreadsheet
template in our How to Read the Riverbottoms Budget
Free Download
Gallery Compare what we spent on our house to your own plans. Every plan is differ-
ent, so adjust your thinking to your circumstances. When planning for excavation,
Sources Say
The Complete for example, note on the Riverbottoms House Budget on page 100 that we spent only
Guide to Contract- $440 to dig our foundation. That amounted to .2% of total construction costs of
ing Your Home $220,000.
gives estimating
guidelines broken
down by trade, Say you had a construction budget of $300,000. Could you assign .2% or
hours, and how to $600 to digging a foundation? You’ll find out quickly when you interview excavators
calculate materi-
als. on the phone how far off that might be. In our case, the hole for the house was very
(See page 263) shallow because we have no basement, only a four-foot crawl space under the house.
The overall footprint of our 3,500 square foot house was small because it was a two-
Spreadsheet
story, so the breadth of the hole was modest, as well.
budget help is
available on Ten
Reasonably, you can compare your excavation to ours by knowing the depth
Commandments
DVD #3 (See page and breadth of the hole you will dig, and what prices are like for digging in your area.
268) and on our We found prices of around $95 an hour for this work. I was present for every minute
Workshop DVDs. of the process, and the digger charged me an accurate number of hours calculated
(page 271) to the tenth of an hour. With a clear lot and easy access, he was in and out in a short
time.
Forums
We are build-
ing in Palm Bay Some of the other factors that will help your comparison are that we did four
(Brevard County). of the trades ourselves, shrinking the amounts needed for electrical, tile, painting,
Not counting our and landscaping. For example, painting is shown on page 102 at $1,760; just the cost
lot we are at $51
per sq ft. If we of materials purchased carefully. The professional cost to paint the house with three
count our lot we paint tones and elaborate woodwork to prepare would be over $12,500.
are at $62. When
completed, we
will have 3,156 Here’s an interesting one caught by some of our sharp-eyed workshop attend-
under air with ees: look at the top of the first page of the budget on page 100 under the line item
3,886 total. Three “Walks and patios”. We got our sidewalks, patio and driveway for $1,320. This was
bedrooms, two full
baths, with two a case of a relative repaying a loan by providing all our concrete flatwork at his own
half baths and a expense, a cost of $5,733 to him, but no cost on our budget. The $1,320 was just for
3-car attached incidentals and to pour pads for the air conditioning units at the side of the house, an
garage.
item we forgot until the last minute.
The house is solid
poured concrete Don’t let your eyes glaze over while reading the Riverbottoms House Budget.
and has a solid
poured safe room Many people think that budgets are complicated and sterile. I did, when I started
(that doubles as planning our house. But the budget proved to be a living thing with lots of meaning
a walk-in closet) when we built. You live or die by your construction budget. It’s fun to get it right and
and a bonus room
upstairs that is to get it down through your astute planning and shopping.
34’x18’ (We will
end up putting a
wall up and make
two rooms – an
office at 12’x18’
and a media

Budget Worksheet room at 22’x18’).

We are doing the
tile in the bath-
You can use the budget worksheet starting on page 108 to build your budget. rooms and floors,
Make photocopies of the form for your trial runs. At an early point, you should trans- all the electrical,
sprinkler system,
fer your figures to a computer spreadsheet and use the spreadsheet to revise and landscaping,
update your estimates of cost as you select subcontractor bids and shop for material painting, installing
and equipment prices. the windows, roll
down shutters and
all bath, kitchen
How To Use the Budget Worksheet and other area
cabinet installs.
First, enter the very important number of what you can spend on your new I have a friend
house, remodel, or addition. This goes on the top of the Worksheet on page 108 in who is a GC and
has given me sev-
the third column, “Budget Amount”. This amount is the key to your project. This is eral good subs in
the amount you can qualify to borrow, or know you can afford. Everything depends the area. If you’re
on staying to this amount. For most people, missing this amount by much means able to do some
work yourself,
the project dies. If you need to build for $300,000 and discover by building a budget then you can get
carefully that it will take $400,000 the options are to change the plan and scope of the it down lower. My
house, or to skip building entirely. GC friend said I’ll
probably end up
at $58 per sq ft
So this becomes “decision time”. It may take several months to lay out your (not counting the
budget and verify all the numbers — don’t rush it. But until you are done with this lot) by the time
we are finished.
part of planning, you won’t know whether your project is indeed feasible. We have also
purchased bath,
Second, go to the bottom of page 116 and take 10% of your budgeted amount sink fixtures, ceil-
ing fans and other
and set it aside for contingency. From this point on, you will work with the remain- items when they
der of your budgeted amount, 90% of the whole, to provide for all the parts of the go on sale and
project. Now, revise the “Budget Amount” number you put on the top of page 108 stored them at a
family member’s
accordingly. home.
Kevin in Palm
Third, allow a percentage for each line item you’ll need in the second column Bay, FL
of the Worksheet (These percentage amounts must add up to 100%.) If your budget Kevin, we too
is $300,000, and you have set aside $30,000 for contingency, then you are allocating are in Palm Bay.
shares of $270,000 to each category. If you allocate 5% for drywall as we did in the Your numbers
are attractive.
Riverbottoms Budget, you have $13,500 for that category. I’d like to hook
up with you to
Fourth, fill in all the dollar amounts that apply to your project in the third discuss (email or
in person). Our
column of the Worksheet. This is an exercise that takes participants less than fifteen parameters are
minutes in our workshop. When you are done — behold! — you have developed something like
a preliminary written budget for your project. You need to congratulate yourself, 2,800 SF under
air (3,800 total),
because a written budget is something even some contractors cannot claim to have 4br/4ba, 3-story,
ever done. pilings, garage
under, and I’m
going to do a lot
Your written budget is not perfect yet, but it is a great key to bringing a dream of the work...
to life. Now begins the long process of checking and improving each number in the
quest for accuracy and cost-savings. Through your preliminary interviews with subs Our plans are
currently with The
and suppliers and through competitive bidding, you will check and verify until you Plan Place on PB
have a solid number for your project. Road for eng.
stamps. I would
like to talk with

you about your subs. I have access to another O-B’s sub “Shop” Your Budget For a
list. We can use to compare. I have an appointment with
Brevard Grouting Services today to discuss pilings. While
Randy
HELP!! I need hard facts. We bought a 1.07 acre lot, After you have a budget worksheet filled
but I’m trying to convince my wife that you cannot build out with actual bids, price quotations, and “guess-
a 3,412 sq. ft. stucco 2-story home in Florida for under timates”, take it around to others who can offer
$300,000. Does anyone have a sample or real building
budget from a home built in Florida in the past 1 or 2 suggestions. In the process of bidding and shop-
years? I would love to be proven wrong. ping for materials, you will meet people in the
Greg in Jacksonville, FL business with a good knowledge of street prices
Hello again: $300,000/3,412 = $87.92 per s.f. I think it’s and available bargains or alternative approaches.
doable. I’m shooting for $75/sf
While I’m still learning...I do understand some basics...

Often a lender is knowledgeable and help-
For example, you can buy a $5K Sub-Zero Refrigerator ful. Even if you haven’t selected your lender, you
or a $1K Frigidaire. You could buy granite countertops can get appointments to talk with experienced
or Formica. You could buy custom cabinets or box sets. construction lenders. The estimator at the local
You could buy 3-tab roof shingles or ceramic barrel tile.
You could spend $50K on landscaping or nothing at all, lumberyard could review your budget. Sometimes
etc., etc., etc., the list goes on...It all depends on what the “help counter” workers at home center stores
you want. If you want nothing but the best...it will be really are qualified to help. You could speak to several
tough to build for under $300K. Also how handy are
you? Can you spare $3K by putting in the sprinkler system house designers about your budget. Fax or email
yourself, or the fence, tiling a floor, or painting...etc., etc., a copy to anyone who could review your numbers
etc.? For estimating purposes, you could say you’re in the and call or meet to discuss them.
$300K +/- $50K range.
As for examples, I did the exact same thing you’re trying Most of the owner-builders I interviewed
to do. I sought out as many owner-builders as I could to found three or four significant bargains in the
get a handle on my cost. I found 5 sources (including two
neighbors) who all built within the last four years. In sum- process of building their house. If you can locate
mary, their costs were usually between $74 to $100 per other O-B’s in your area, they can be very helpful
SF. Good luck in confirming your numbers and in suggesting
Randy
alternate sources or approaches to save money. If
Greg, we are currently under construction in Flagler County each O-B you consult has several bargains to sug-
on a 2,800 sq. ft. home and our budget is $285,000, gest, you may be able to line up a large collective
and I’m fairly certain we’ll spend it all. Concrete and block
are high right now which drives the cost up, and unless list of exceptional sources for savings.
you are going with low-cost interior furnishings (tile kitchen
etc.) I would plan on $100/sq ft. Also, the new Florida Sometimes a retired general contractor in
code takes effect starting July 1 and it required more
strengthening for hurricanes than the 2001 FBC. your locale is a good advisor. Some owner-build-
Eric in Flagler Beach, FL ers have used high school shop or construction
Is the square footage under air or roof? That makes a dif-
class teachers as advisors. If you will be using
ference on what your price per sq. ft. will be. an independent building inspector, ask him to
Donald in Port St. John, FL review your budget. You don’t want to: 1) over-
Just for comparison sake, mine is 2,800 sq ft living 3,600
pay for anything, 2) underestimate anything, or
sq. ft. under roof. 3) forget anything.
Eric in Flagler Beach, FL
Randy,is my calculator broken? I come up with $102/sq.

You and your successors will live in the
ft. with your numbers. house you build for many decades, possibly cen-
Donald in Port St. John, FL turies. Take time now while you are in the plan-
Living space is 3,412, including 2-car garage, porch and
ning stage to shop your budget for a few weeks.
entry comes to 4,246 sq ft. My wife swears that we can The harder you work this planning step, the more
build under $300,000. We don’t plan to have marble money you will ultimately save.
and “Sub-Zero” kitchen equipment. But I don’t see a remote

possibility of coming close. I hope someone from Florida can tell me that they were able to build in the under $75 psf
range, so my wife can say “told you so”. I’m not convinced.
Greg in Jacksonville, FL
Don’t use that calculator in your financial planning :D
Regardless, $89/sf vs. $92/sf is in the noise. I plan to know my cost as close as I possibly can. I have to...I think the bank
won’t loan on speculative planning. As for price/sf calculation, I believe that’s under air. Otherwise we’d see a breakout
of mansions being built.
Anyone use The Plan Place on Palm Bay Road? We just turned them on to modify and engineer our stock plans. We’re
tearing down a 40-year old 3/2 ranch that was damaged in the hurricanes last year. We’re getting our temporary hous-
ing ready while planning the new home. Keep in touch.
Randy
LOL, sorry, after using a real calculator, you are correct. That oughta learn me to use an aol calc. Don
Donald in Port St. John, FL
May I ask what your concrete and block costs were? We are in the drawing stages of our plans in Lake County. This is
our 2nd O-B home and I do have to say we came out under $100/sf...3/4-acre lot on a lake. 1,677 sf per floor. Two
floors including walkout basement and over 5,000 sf with covered porches and breezeway and garage. We finished
three years ago and our total cost was $320,000. Our land cost us $60,000 so our total psf cost to build was $78/sf
and total house was $52/sf (that is minus the land). I know concrete and lumber have almost doubled in the four years
since we started to build. What changes are coming in structural requirements in Florida?
Brenda in Eustis, FL
Greg, I’m new to the forum. We CO’ed on our 1st O-B home in two years ago. Our sq ft is 3,512 total & 2,373 living
single-story. We have about $225K in the home. We subbed out the majority of the home, my husband did about 15%
of the work...mostly carpentry finish work. About $64/sq ft total. Hope this helps.
Kristy in Saint Lucie, FL
Holy crap! Kevin, those are great numbers. I thought we were doing good. We are doing all painting interior/exterior,
landscaping, sprinkler system, trim work, all door and window install, floor/bathroom tiling, custom maple cabinets built
from scratch, and all the plumbing trim work. We are still at around $115 per sq ft and for what it is, it is a damn good
deal. We have a slick electrical system going in and lots of extras like tankless water heater, the ‘works’ in kitchen appli-
ances, 250-gallon underground propane tank, full-home standby generator, few dozen linear feet of Zodiac counters,
and built-ins everywhere.
Even with out all those items we never were anywhere near $50. I think we got it down to like $90 and just decided to
go all the way.
Home is 2,700 under air, 3,800 under roof, on one acre on a lake in a rural part of Orlando. Our major costs were:
foundation $20K
poured solid walls $28K
trusses $10K
electric $22K
framing labor $17K
framing materials $11K
drywall labor/materials $14K
land $40K
land permit + clearing/fill $32K
city permits $18K
HVAC $15K
septic $9K
landscaping $9K
roofing $14K
doors/windows $10K
plumbing $4K (got a deal here)
generator $7K
gas line + tank $6K
All the rest of the money was spent on cabinets, flooring, painting, appliances, and anything else needed. Needless to
say the bill is coming in around $320-$330K.

Budget Worksheet
Description Percent % Budget Amount

BUDGET LIMIT: 100%
INDIRECT CONSTRUCTION COSTS

Bldg. permit/fees
Setup short-term financing
Interest charges
Plans and specs.
Structural engineering
Survey review
Building lot
Course of construction insurance
Supervision/overhead
Misc. equipment rental
Temporary/mobile phone
Trash pickup
Clean-up
Temporary power
Title insurance
Other:
EXCAVATION/SITE WORK
Site clearing
Foundation excavation
Finish grading
Backfill
Sewer/water trench
Electric trench
Drain tile and gravel
Other:
MASONRY
Footings/labor & materials
Foundation/labor & materials

Expenditures Final Cost Sub/Supplier Phone Number

Budget Worksheet

Rebar & steel
Waterproofing
Termite protection
Sand or gravel & placement
Basement floor
Garage floor/labor & materials
Walks and patios
Driveway & other ext. flatwork
Stoop, steps & ramps
Fireplace brick
Other:
SEPTIC SYSTEM
Well
STEEL BEAMS AND POSTS
ROUGH CARPENTRY
Framing lumber
Trusses
Framing labor
Crane service
Windows & screens
Skylights
Exterior doors
Garage doors & openers
Decks & porches
Other:
PLUMBING
Rough plumbing
Fixtures & trim
Other:


Budget Worksheet

HVAC
Heating & air conditioning
Other:
ELECTRICAL
Rough electrical
Finish electrical
Fixtures
Vacuum system
Alarm system
Television pre-wire
Telephone pre-wire
Audio pre-wire
Other:
INSULATION
Wall & attic insulation
Other:
DRYWALL
Hang drywall materials & labor
Tape & texture
Other:
FINISH CARPENTRY
Interior doors
Moldings/stair rail/columns
Finish carpentry
Fireplace equipment
Hearth and mantel
Closet organizers
Finish hardware
Other:


Budget Worksheet

EXTERIOR FINISH
Roofing
House wrap
Siding
Stucco
Brick
Stone work
Exterior trim
Soffit & facia
Gutter mat’l./labor
Chimneys
Wrought iron
Other:
PAINTING
Interior painting
Exterior painting
Wallpaper
Other:
FLOORING
Ceramic tile
Carpeting
Wood flooring
Vinyl flooring
Other:
MARBLE, TILE & GLASS

Tub/shower surrounds
Shower doors, mirrors & glass
Other:


Budget Worksheet

LANDSCAPING
Sprinkler system
Fill and topsoil
Seed or sod
Trees and plantings
Retaining walls
Fencing
Other:
CABINET, COUNTER & APPLIANCE

Kitchen and bath cabinets
Counter & vanity tops
Medicine chests
Laundry cabinets
Entertainment center/built-ins
Kitchen appliances
Other:
MISCELLANEOUS
Smoke alarms
Doorbell
Dryer vent
Foundation plaster
Attic fan
On-site supervision
CONTINGENCY
Other:
Total Cost of House:

Building Costs:
Unspent Amount:


$50 per foot is awesome. I did not think that was possible. I am curious as to how you saved so much on your shell. The
hard costs. – Jason
Jason in Orlando, FL
Journal
We’re mostly dried in now and working on mechanicals. Our entry door is taking longer to come in than anticipated.
Rough plumbing is all but completely done. The bathtub in the master is a drop-in unit that needs a frame yet, which is on
the agenda tomorrow. Bath #2’s tub will also be secured in tomorrow, as will the fireplace (once it’s frame is built, that is).
HVAC started today and expects to be done at the end of the week, and electrical is scheduled for next week.
Good news on the basement stairs. Turns out, no pun intended, we were able to accommodate a straight staircase,
avoiding our undesired landing and turn. Unfortunately, the basement floor is a mess. The landscaping guys were sup-
posed to put in our landscape timber retaining wall weeks ago, and still haven’t yet. Runoff from rain came in one of the
window openings and muddied up the floor a bit. We OSB’d the opening until they can get the retaining wall up, but not
soon enough. Looks like we’ll be renting a wet vac in the near future. Of course, we don’t have water yet, so that’ll have
to wait.
In the kitchen, we’ve opted for a 3’ deep peninsula instead of an island after seeing the space in full scale. Our cabinet
guy has measured and we’ve decided on specifics. One unexpected extra is a spice cabinet that nestles into a 7.5” gap
we have in our base cabinets. I found solid surface countertops for $35/sq. foot installed, and finally settled on a color
too. The same countertop at Home Depot was $52. We bought our refrigerator, range, washer and dryer this week too,
all from Sears. Am very excited to finally have a front-loading washer.
Although the pictures don’t show it yet, we went ahead and framed in the rooms in the basement. Since we have to have
drywall over the ICF to get a certificate of occupancy, we had to at least put in end posts for framing where interior and
exterior walls meet. It was barely a drop in the bucket to just go ahead and frame off the four walls we wanted, so we
did.
Our builder bid on drywall, but his bid came is $7K to $8K higher than all of the others we got! Guess he didn’t want
to do it :-) So he’s out, and the next guy is in. We won’t be pocketing that savings though, because we forgot to include
some pretty big expenses early on that couldn’t be neglected (pest treatment, pea gravel for radon escape, etc.). As
much planning as we’ve been doing, it seems ridiculous that such basic things would’ve been overlooked. Thankfully, that
money appeared through drywall savings, so we’re still doing okay on the budget. Other things that are running higher
than expected (appliances, lighting fixtures, masonry) are being compensated for with savings in areas such as gutters &
excavation. In an attempt to help offset this and other potential cost
, we’ve paid cash for a few things such as door levers, tubs & shower surround, appliances, lighting fixtures, ceiling fans,
fireplace, and all plumbing pipe and fittings. Although we’ve kept all receipts and could turn them in for a draw, we prob-
ably won’t.
Aimee in Kalamazoo, MI

Chapter 9: Commando Shopping Techniques
Forums
My wife and I are
about to have a
home built. We
Time line: Three months before groundbreaking have been shop-
ping for home
builders here in
OKC and seem
to get all sorts of
The Price of Marshmallows different opinions
and answers to
E
laine and I have been avid grocery shoppers for years. It’s a science and a sport everything. One
guy says stock
with us. We follow good rules of comparison shopping, we read labels, we home plans are
check product sizes for comparability. When we buy a larger size of a product, usually wrong
say breakfast cereal or olive oil, we make sure that the price per ounce is lower than and he will draw
up a new set “for
for a smaller size. free” if we hire
him. Another says
We took the level of shopping up a notch some years ago in an effort to save they have more
“buying power”
money to build a house. Using a computer spreadsheet, we listed and totaled all the for flooring, tile,
products, brands, and sizes that we use. We discovered that all of the items we buy etc. They each
regularly, from applesauce to light bulbs, add up to less than 200 products. On the seem to have
some kind of story
spreadsheet we listed the usual price of the item: (“one-pound bag marshmallows: or opinion. Some
$1.59”) and the lowest price we have found for that item: (“one-pound bag marsh- even have a
mallows: $.69, Storehouse Market, March, 2004”). used-car salesman
type pitch. Most
are in the $100
When we find a price that comes close to the “lowest-ever” price we buy that per sq ft range.
item in bulk. By organizing our grocery shopping, we have reduced our monthly But at this price, it

120 • Chapter 9: Commando Shopping Techniques
seems there would grocery bill from $500 to $300 while still getting the exact brands and products we
be little equity, prefer.
especially here in
the Midwest.
When we were developing early plans to build our home we took a vaca-
I have considered tion trip in the car. Elaine brought up the idea of owner-building the house, and I
building our own expressed real hesitation. While on the road, we stopped at a convenience store for
home, but my wife
is skeptical and gas. I browsed the shelves idly and noticed marshmallows were selling for $3.59. As
feels that subcon- an organized shopper, I mentally compared that price to the $.69 we had paid when
tractors will give we last stocked up. It was more than five times as much. As I looked closer, I discov-
better deals and
be more reliable ered that the convenience store product was in a smaller 12-ounce size. That made it
for established almost eight times as expensive.
home builders
than for a maver-
ick owner-builder. I began to wonder whether the products we needed to build a house —
She feels that a lumber, wiring, plumbing fixtures — also could be had at much lower prices than
builder will get you see in the first place you look. Would the simple shopping and bargain-hunting
the materials and
subcontractors skills of any householder apply to building a house? The answer turned out to be a
cheaper, thus the resounding “yes”.
savings we would
get from being our
of GC would be The marshmallows were available at a convenience store for a high price, but
minimal at best, they were convenient. The store was open long hours, and was situated to be a quick
and the project stop for the customer. Lines at the cash register were short. Customers paid the high
would go much
smoother. Is she prices there in exchange for convenience.
right? How much
would we save Professional builders follow a convenience ethic much more than owner-
on a 1,900 sq
ft home of good builders do because they are in a production mode. They have a volume business to
quality? Thanks. do that depends on consistent, repeatable production methods and procurement.
Fred in Oklahoma Since time is of the essence, a contractor won’t mess with a convenient established
City, OK
arrangement to buy something he needs to build your home. But an owner-builder
Hi Fred, we have can and will shop for hours to save money on a single item. Your issue is not conve-
lived in Southern nience, but savings.
California for the
past 20 yrs. We
just relocated to Much of the 1,000 hours of owner-builder preparation we advocate has to
the San Antonio, do with finding better values than you first see on every item for your home. It takes
TX area and will
be building our time and effort to do the research involved, and a general contractor wouldn’t dream
own home. I of spending the time that you would. As long as his price is competitive with other
have a industrial builders, and the builder makes a customary profit, he sees no need to do it differ-
construction back-
ground and have ently.
been a residential
licensed contractor The builder will tend to use the same subs and suppliers for every project.
in CA. I worked
as a sub to several Often, no bidding is done. It’s more comfortable and convenient for a builder to
GC’s and most use the same people. If the builder has found a good sub, he will not rock the boat
of their custom- by looking for better values. He wouldn’t want to risk alienating good help, and he
ers were very
unhappy with the makes only token efforts to get the prices down.
time it was always
taking the GC. If a builder handles a $300,000 project in 100 hours of management time,
Our neighbor
across the street and earns a clear profit of $30,000 he has been well enough paid at $300 per hour
had a second- for his trouble. Even though he could make more profit by shopping, it would eat
story addition and up time, and builders are in a production mode. In a 2,000-hour work year, a small
kitchen remodel
done about three custom builder would hope to do three or four houses. He doesn’t want to spend

Chapter 9: Commando Shopping Techniques • 121
more than 100 hours on managing any one house. With administration and mar- yrs. ago and
keting, the builder only has about a thousand work hours a year to spend on actual used one of the
projects. best known GC’s
in the Orange
County area.
Since custom builders have found they can make more profit by doing more It took 11 1/2
of the trade work on each house with their own forces — over 50% of the trade work months to get him
to complete the
on average — much more of their time is consumed in direct supervision and labor. project to a 90%
Though a very hands-on builder might spend 300 hours on a luxury home project, level; it should
very little of that time will be spent on finding bargains. The key to his profit will be have taken 4 to
5 months max.
reducing his hours per project. The neighbors
finally finished it
themselves.
Bargains My sister and

brother-in-law
moved from SC
You can and will find bargains that contractors can’t match. The savings to the north part
may not match those we found on marshmallows, though they occasionally do. The of Houston, TX
reward for your bargain hunting is that you will save much more money in total dol- almost a year
and half ago to
lars on a single custom home than you can in a lifetime of grocery shopping. The date. They visited
savings are superior to those from other kinds of shopping, because they mainline to the area the year
your net worth. before their move,
and purchased a
new spec home
When we built our house, we stumbled across terrific savings on a number of from ‘The Builder
items. One was the balusters for our staircase. They were available at more than $13 of the Year’ who
had not started
each from a contractors supply house. We saw them in a lumberyard newspaper ad construction on
on closeout for $4.15 each. We sourced most of our stair parts from that lumberyard, it yet. They were
and negotiated an additional ten percent discount for doing so. This made the balus- told that construc-
tion on their home
ters $3.71 each. Our savings on 120 of them was $1,115. would begin in
February and
We found a bargain on solid granite for our countertops by poking around in would take 6
months. Well a
the “boneyard” of a stone and tile operation where returns and discontinued species long story short
of stone were stored. We paid $5,375 for a more than $12,000 value. and to the point,
380 days later
– YES, 380 DAYS
Every owner-builder I interviewed told me stories of savings they had found. – they final closed
Here are some examples: on the house.
If you ask around

“We have septic tanks here. I learned that the guy doing my grading was for every bad
trying to get into the business of septic tank installation. I was his first customer, experience an
but I wasn’t worried because he was a competent digger, and the system gets a OWNER-BUILDER
has had you can
thorough official inspection anyway. He did it for $3,750. The inspector told him it most likely find
should have been $12,500.” at least three
examples of a
bad experience
“We have a big home center store close by, and we often buy on sale. With an owner has had
our photo album of ideas, we have our shopping list. Every weekend we look for with a GC.
sales. Appliances work well that way. Carpet was another example. We told them
THE KEY TO NOT
the yardage, and they came back with a low-price factory deal. On windows, HAVING A BAD
we had a local supply yard that had just taken on a high-end national window EXPERIENCE IS
line. We negotiated a $10,000 price on what would be $15,000 worth of wood YOU HAVE TO
BE ON TOP OF
windows at contractor prices.” EVERYTHING
AND IN EVERY

TYPE OF CON- “I picked up my windows from a contractor who ordered them and the cus-
STRUCTION A tomer didn’t want them. They were brand-new triple-glazed windows worth about
WELL-DEFINED $7,000. I paid $1,500 for all of them.”
WRITTEN SCOPE
OF WORK IS A
MUST. Most GC’s “We found our appliances on a closeout and saved $3,125 on a fridge,
cannot provide dishwasher and range. On flooring, we shopped heavily, and saved $4,000 on
their subs with a
written scope of carpet. On ceramic tile, we shopped subs and got leads, and saved $2.50 a foot.
work. The GC is On cabinets, we used an independent guy who was a dealer for factory cabinets,
not going to tell and saved $7,500 versus a custom cabinetmaker.”
you about the
problems that they
have between “Our kitchen cupboards we found discontinued at a local cabinet shop, and
themselves and we got them before we even broke ground because they were such a good value
subs; that does not
help sell houses, at 25% off. We stored them in my brother’s garage. We did well on light fixtures by
but they have picking up the ones we wanted whenever there was a sale.”
them.
James in Spring
Branch, TX “We went to one home center store and saw the Jacuzzi tub we wanted for
$2,500. I started talking with the salesman, and he told me that another store
I have to agree down the street had that model for less. We went down the street and bought it for
with James and
being in the $1,500. We had a friend in the import business who got granite for our counter-
middle of my own tops and saved us $7,500. We had a section of copper roof, and when we called
construction, it’s a around, we found it cost twice as much here as what it was in the bigger city 50
whole new ball-
game when you’re miles away. We saved $1,100, even though they came from that far away. We
in charge of the installed beautiful marble floors after we found what a good price we could get.”
money and sched-
uling. Definitely
for the better. You “Our siding was quoted at $9,000–$12,500 and we got it for $4,500. We
can also write found the guy by word of mouth. A good sub will tell you things. You can shop for
time/performance the right sub right up until you schedule it. You are not obligated until you sign. We
penalties into
the contract. No did a lot of shopping on our windows, and got a bargain on custom made ones.
matter which route We bought direct from a factory that makes and sells windows to distributors. We
you choose. $100 went to their showroom and saved. If you walk into a wholesaler and find a slightly
a sq ft is reason-
able and unless damaged version of the countertop you want, you save. Look out for things. When
you’re looking to Hurricane Rita came through, I had a bid on my lumber just before the storm. So I
do a lot of the hurried down and made a deposit to lock it in. Contractor prices on lumber went
work yourself you
won’t be able to up 20% right after that.”
bring it down very
far. Where you “My plan of attack is to find a subcontractor on a site, find his best person,
make up the differ-
ence, if you have and offer that person an after-hours job. I offer him a couple of bucks more than he
time to put into makes per hour. I did it with some of the framing. Also painting — I hired a guy for
it, will be finding $10 per hour to work with me. He did some taping, spraying, etc. Remember that
more reputable
subs and price a sub is a contractor, he adds something to the costs in every category too. Go
shopping. Con- to other jobs and pick up workers. It’s really easy. You ask questions, and you say,
trary to regular Joe ‘Do you know anyone who wants to make a little extra on the side?’ Their wage
shopper, Home
Depot does not is the smallest part of the job. Don’t hesitate to use skilled laborers. Electric work
have the best is more tricky. Just use them as consultants, or it gets expensive. It helps to know
prices on most somebody on that one. On plumbing, you will nearly always find a subcontractor
items. Building
your own home is who has crews. The crew leader is making $15 an hour, you offer $18.”
a second job, it
takes a lot of time “Since I wasn’t looking for a specific color, I got carpet for $5 a yard, a Shaw
and research for
us non-contrac- 40 oz., in a discontinued shade. It was a taupe, a good color for resale. The floor-

ing contractor sent out their guy to install it at $.75 for pad, $1.50 for installation. tors just to get in
They agreed to charge the regular installation price with no profit applied. The the front door of
package would have been $38 a yard at retail.” the bank. Permits,
reworking the
plans and engi-
“Buy in bulk and always watch for sales. It does pay to shop around. You neering for local
need to watch as they select materials, so you get straight wood, etc. Be there conditions, item-
ized budgets and
when they load it. I selected a tub and shower unit for the bathroom. I saw it for subcontractors are
$525. Then I saw it at another store for $350. Don’t be in too big of a rush.” areas of a project
most homeowners
never get involved
“I went to a door shop looking for a value on a high-end front door for the with. If you still
house. They often make ones that are ordered with the wrong swing, and I got a feel up to the
perfect one from the door shop for $750. I saved $1,500.” challenge, there is
a lot of wisdom in
these forums, read
“You can save an incredible amount of money just buying doors at one of through them and
don’t be afraid to
these wrecking or salvage yards. I got a mahogany entry door worth $2,500 for ask questions.
$50. I got doors with leaded glass, restored them to new condition so they were Tom in Strouds-
acceptable to the inspector, and put them in front rooms.” burg, PA
Fred, as for the

“When I got bids in the beginning, I ran into a local building supply company. $100 sq. ft., a
They were not the cheapest, but the salesman was the most helpful person, and I contractor makes
at least 35% so
could bounce ideas off him. I had 3’x6’ windows, 15 of them, across the back of if you take full
the house in the design. He told me about these wood windows that went out on control and watch
a job, and were sent back. He sold them to me for $125 each. They were worth your purchasing,
get at least 4
$500 each. I actually altered the design to take advantage of the deal.” bids for the larger
material items, 3
“I only had one true contractor, the plumber, the rest were all moonlighters. It from other than
Home Depot or
takes longer that way, but it is smooth. You have to use weekends. If a portion isn’t Lowe’s, you should
done by Sunday, you may lose a week. But sometimes their other jobs die, and get closer to $75
they come full-time. I saved about half this way.” sq. ft. If you are
willing to direct
hire and/or do
A woman who is an experienced construction lender from Florida told me some of the work
that people who build with general contractors don’t save money like owner-builders (hang sheetrock,
paint, install
do: cabinets, etc.) you
will most likely get
“I have seen people pay too much for what they are getting. They are not it below $75. You
can spend 2 to 3
knowledgeable consumers and good negotiators. They make emotional pur- months just getting
chases. They buy on impulse. People lose some detachment and objectivity. Paint, a GC lined up.
carpet, tile, appliances, toilets, hardware, fixtures. That’s where builders make The quotes from
the GC’s here in
some of their best money. People never seem to pick out what the house comes Texas tell us that
with. Builders count on people going a little crazy with select items. They will make once we sign with
30% on select items.” them then it takes
about 3 months
to go through
planning process,
Identify Your Suppliers then 6 months to
build. SEE MY
OTHER POST
Over the course of construction of our home, in addition to about 15 sepa- ON THE AVER-
rate subcontractors, we used more than a dozen specialty suppliers. It is important AGE GENERAL’S
TIMELINE. So if
to get three or more bids or “takeoffs” from each category of supplier, just as it is you have not read
with subcontractors. Subcontractor bids vary widely, but supplier prices can vary The Owner-Builder

Book, get it and even more. Because subcontracting involves direct labor, there is a limit to available
read it and have discounts. Materials are inventoried, and thus have a carrying cost to the supplier.
your wife read it.
Women like the
security of money Suppliers sometimes discontinue items because of changes in style or fea-
in the bank, so tures, or due to lack of demand. The result can be a bargain for you. Suppliers fre-
show her how if quently must take back return items, and often discount them deeply. Damaged
you owner-build
you build the items, overstocks, and discounts for quantity purchases are reasons you can save.
dollar value of Identify suppliers who can meet your needs, and check prices on everything you buy.
the equity in the You will be able to buy some or all of the items on this list directly:
finished home.
James in Spring
Branch, TX
Potential Suppliers
Fred, Your wife
has a point.
Unless you’re in 1. Sand and gravel 26. Window wells
the business you’re
not going to get 2. Brick and block 27. Skylights
the same takeoff
as those that build 3. Concrete supply 28. Plumbing fixtures
15+ houses a
4. Lumber 29. Vacuum system components
year. You would
have to work real 5. Floor coverings 30. Roll roofing supplies and shingles
hard getting your
take-offs close to 6. Electrical supplies 31. Fasteners
an experienced
GC’s price. 7. Paints and wallpapers 32. Insurance
However, you are
losing out on $ 8. Appliances 33. Tools
per sq by having
the whole house 9. Windows 34. Specialty supplies
GC’d. Perhaps 10. Tile 35. Doorknobs and locks
a compromise
would be in order. 11. Drywall 36. Heating and air conditioning components
Find a builder that
will build the shell 12. Cabinets 37. Wood flooring
(excavation/foun-
dation/framing/ 13. Doors 38. Sprinkler supplies
siding/roof). Get
a price for that 14. Trims and millwork 39. Fencing
then you sub out
the rest. I feel the
15. Stone 40. Decking and siding
GC would com- 16. Sealed fireplaces 41. Title insurance
pete with the price
you could get for 17. Trusses 42. Stair rail parts
the shell. But as
was mentioned 18. Wrought iron 43. Telephone, alarm, audio and cable components
above, you lose a
little control. Make 19. Closet organizers 44. Gutters and downspouts
sure you have a
contract that once 20. Blinds 45. Countertops
started no delays 21. Cultured marble 46. Computer software
without penalty.
Jon in Merrimack, 22. Mirrors and shower doors 47. Built-in sports equipment
NH
23. ICFs or SIPs 48. Topsoil
Fred, I am not sure
I totally agree with 24. Plumbing supplies 49. Plants and landscape supplies
Jon that unless
you are in the 25. Lighting fixtures 50. Steel and rebar
business you will
not get the same
price material

When You Pay for Materials Separately You Save or labor. Some
subs will treat you
differently, but you
One of the ways that general contractors improve their profits is by buying would not want to
materials separately from labor on the trades that go into a house. The contractor can do business with
a GC that treated
establish regular sources of supply with consistent discounts for volume purchase you that way. As
and favorable credit terms. He increases his profits by passing along the materials to for material, yes
his customer at marked-up prices. the GC is getting
it at a better price
that he is giving
Owner-builders can enjoy the same privilege. 85% of those I interviewed to you, but the
bought at least some materials separately from labor on the trades. I found out dra- lumberyard can
only give a GC
matically how much this can save when I shopped for the stair rail system for our so much of a
house. discount before
they cut into
their own profits.
The subs who do custom stair rail work in our region use a formula for bid- Just be sure that
ding that takes the prices for stair rail parts (newel posts, balusters, rosettes, hand whatever direc-
rail, anchors, and so forth) and adds an equal amount for labor to build the system. tion you go that
you present the
The parts for ours were bid at $2,500 and labor was an additional $2,500. The car- supplier (be it a
penter assured me that I couldn’t get better prices on materials. I decided to find GC, lumberyard,
out. cabinetmaker,
etc.) with a well-
written request for
With the discounts I got on balusters (the vertical spindles running from bid and MAKE
floor to handrail) I got all the parts for $1,250. Then I looked for a carpenter who SURE THAT YOU
ADDRESS IT TO
was willing to do labor only. The one I found preferred avoiding the hassle of select- ALL OF THE BID-
ing and sourcing materials and handling the costs. He wanted $850 for labor only. I DERS. A common
offered cash, and he agreed to $750. The total cost came to $2,000. practice in large
industrial projects
is to send out
Generals tell me they have the most difficulty getting labor-only deals on request for bids
the mechanical trades: electrical, plumbing, and HVAC (heating, ventilating, and with a cover letter
addressed to all
air conditioning). Nonetheless, 50% of them say that they buy all the supplies for the bidders, and
the mechanical trades directly except electrical boxes and wire, and plumbing pipe then they hold a
and connectors. O-B’s in our survey report that they bought materials separately on job walk that all
bidders show up
52% of the trades. You can do the same by having subcontractors who bid your work on the job site at
furnish you with a list of required materials. the same time. So
if you go out for
bid on a lumber
O-B’s seem to need some help in this area. 52% seems low for capitalizing package and put
on the opportunity to buy materials directly. Our on-line survey permits tracking a cover letter on
through on the answers of any one respondent. You can cross-check the occupation the written request
This lets the lum-
of the respondent with all of his or her other answers. One of our participants is a beryard know you
G.C. who owner-built his own home. I find it interesting that he reports 100% of are serious, have
material was purchased separately from labor. Some other very bright O-B’s in our covered every-
thing and are
survey also purchased 100% of materials separately from labor. looking at price
very closely.
Two different owner-builders I know found that they could save by buying James in Spring
Branch, TX
and installing the ductwork for HVAC themselves. HVAC ductwork used to be made
of sheet metal and was difficult for do-it-yourselfers to install. Newer technology I disagree com-
employs energy-efficient insulated flexible tubing that is easy to install. Typical sav- pletely with this
statement. You can
ings on both material and labor: $2,500. easily beat builder
prices on almost
all materials. The

reason for this is Some subcontractors have the attitude that they are entitled to the markups
most subcontrac- they garner from furnished materials. Contractor John English says so in his book,
tors only deal The Building Buddy:
with one or two
suppliers, and
they have for the “If you ask a plumber to work on a toilet you bought because it was $50
past 10-15+ years cheaper than his own bid he may want to charge more for his labor. This is fair
thinking they are
getting the best because he cannot be expected to be familiar with all installations. You probably
combination of won’t save much, you will use a lot of your own time, and you may upset an honest
price and/or ser- man.”
vice. How do they
know if they never
shop the competi- You and I are the honest people who are upset by this kind of thinking. First
tion? I found by of all, you already have an understanding with the subs about purchased material.
taking my own
quantity takeoffs, They know up front. Next, $50 is a lot to save. It’s the net worth equivalent of $500 of
I could call the your salary, which for most people is more than a day of work. Finally, it doesn’t take
suppliers’ reps much of your time to find a bargain. You may work at it for a half-day and establish
cold and explain
my situation like a way to get $50 off on each of several dozen major plumbing items. You save more
a business (“I am than $1,000, the DSDE equivalent of $10,000 in salary for four hours of thought and
a GC. Although effort.
I am limited
production, I build
custom houses that I saved nearly $2,500 off retail on lawn sprinkler parts alone by buying them
are sold before directly from the distributor. I saved another $1,250 on faucet fixtures. It would take
I begin construc-
tion, no spec. a year of work for an average person making $50,000 per year to set aside that much
I don’t think my cash. Your tradesman may or may not charge you more for his labor when you source
current supplier the parts separately. In many cases, I have found labor-only deals that actually total
is giving me the
best value, I am less than the labor component of a bundled bid.
shopping around
for a new supplier. The benefits of buying materials separately include:
I have quantities,
may I fax them to
you for a bid?”). 1. You save money on materials.
Ask anyone that 2. You may save on labor.
owns a business, 3. You know what you are getting.
it is much easier to
service an existing 4. You control the quality of components.
customer than it 5. You have direct access to warranty information.
is to develop a 6. You can get refunds on any excess material you overestimate.
new customer. I 7. You will discover some components that you can install yourself at a
just dropped an
savings.
opportunity for a
new customer into 8. You get contractor pricing you can use on future purchases.
their lap, an easy 9. You protect yourself against materialmen’s liens. (See Chapter 12)
bid as quanti-
ties are already
figured and it will
only take them How to Use a Computer to Save
about 15 minutes
to look up all the
materials in their Some of the computer techniques for managing your project have been men-
computer, their tioned in earlier chapters. All can save money on your house project:
pencils get real
sharp when they
think about the • Dream Home Notebook
prospect of repeat
business.
By keeping your notes in a word processing file, you clarify your thoughts
I found I could get and make design choices early. With your room by room and trade by trade descrip-
better prices on

tions of your specifications, you can make a ready record to email or fax to potential engineered trusses
bidders. and lumber than
my ICF subcon-
tractor, a custom
• Sub and Supplier Interviews house builder him-
self (he changed
his lumber supplier
If you use a word processor to capture the interviews you make with special- when I showed
ists, you can make changes and add detail to your trade by trade descriptions. Your him my invoice
vs. his supplier’s
bid requests to the trades are more detailed and professional, and you get improved proposal through
bids. him for the same
takeoff). I got
better prices than
• Spreadsheet Budget my plumber, using
my plumber’s
quantity takeoffs
As you build your budget on a computer spreadsheet, you undergo the dis- (my plumber bid
cipline of obtaining and defining estimates for every cost category for your house. material separate
This process always tightens up and reduces overall costs. Once you begin to make from labor, and
for his material bid
expenditures on construction costs, you enter them into your spreadsheet and see the he simply submit-
impact on your totals. For instance, you may spend $10,000 for construction permits ted his takeoffs
after budgeting $8,000. Or you may learn that the soils on your site are unstable, and and quote from his
supply house he
you must add concrete pilings at an unanticipated cost of $4,000. As you track each has used for 15
expense, you can make adjustments in future allocations to stay on target. years and which
he said I could
never match). I got
• Spreadsheet Shopping Comparisons better prices on
copper than my
electrician, and all
Alternative bids by subs and suppliers can be laid out side by side on a spread- finish electrical fix-
sheet in every particular and compared. This helps to understand details and find tures were simply
cost savings. When I laid out my options for plumbing faucets on a spreadsheet, I not available
without a custom
discovered expensive features that I could do without. I “cost-engineered” the faucet order locally, so
purchases to include only the desired features in the desired locations in the house. enter larger market
This helped us save $1,250. price matching
(my electrician
was amazed at
• Computer Fax and Email what I actually
paid for fixtures).
I got better prices
There is tremendous convenience in faxing direct from your computer to on finish materials
a fax machine anywhere in the world. (Faxes are still the preferred communication such as tile, how-
ever this is largely
means of the construction industry.) By installing an inexpensive fax modem on our because I found
computer we were able to send copies of many documents to those who could help us. a tile pattern I
(New machines often include the modem). We sent out descriptions of requirements liked on closeout
and agreed to
for many of the trades to various subs with fax machines. This saved much time and take the remaining
brought us more bids than we could get by face to face communication. We were able quantity. There
to find better prices. We sent around our budget to experts for review. was very little
I couldn’t beat
established sub-
We installed a second phone line and later a cable modem to handle fax and contractor price
email traffic. There were occasions when we were having a conversation with a sub on, even though
they claimed I
or supplier on one phone line and we were emailing or faxing him a list of pertinent could never match
specifications at the same time on another line. We were able to complete the conver- their prices. I tend
sation with the information in the other party’s hands. to think this is mar-
keting from their
suppliers, they
give good service

and make them • Computer Schedule

think they are get-
ting great prices,
it keeps them In the next chapter, we will show you how to organize your construction
from shopping the schedule on computer. With a schedule on computer, any change to your plans is
competition. easily understood. Your computer schedule can be distributed by fax or email to
As to subcontrac- your reviewers or team members. The computer offers you better control and faster
tors, I found that completion.
I didn’t want the
same subcontrac-
tors that work 93% of Owner-builders in our survey used a computer to plan and manage
for production their project, and 63% did so extensively. O-B’s describe what they are doing with
builders. You want computers:
the subcontractors
that take pride in
their work, that “Tracking, spreadsheet budget and schedule.” “Designed house on computer.”
are proud to have “Did preliminary design and brought to architect. This reduced the charges. Then
their name on the
house. As an O-B, loaded finished design back in my system to do material takeoffs, stairway calcula-
you can attract tions, and layouts.” “Set up a website to load photos of our progress.” “Did Manual
this caliber of sub- J calculations of heating and cooling loads.” “Writing my own spec sheets. It really
contractors. They
are very difficult helped me to cement what I wanted, and get it all in writing. I started out by writ-
to find, they are ing a bulleted, organized list of every detail and grade/quality I wanted. (With a
small independent new document for each subsystem/trade).” “We got our business cards printed up
shops and appre-
ciate customers on our home computer, and went to all the home center stores and other suppliers
interested in qual- and registered for contractor prices and credit approval.” “I just wrote up an Offer
ity over bottom to Purchase on a land contract, and kept a schedule of payments with interest, etc.
-line price; they
don’t advertise, on our computer.” ”I like to use Excel for budgeting and draw requests. I also use
yet stay very busy, Quicken™ to track all of the bank account balances.” “I saved the house plans in
and ultimately they
are the best com- .pdf on it — we use it for those few “computer-connected subs”
bination of quality
vs. value although
they are not the • The Internet
cheapest price
(production build- With tens of millions of sites now available on the Internet, I just want to
ers will squeeze
the last dime out mention two workhorses. Google.com offers a free utility called Google Local that
of a house, and helps you find vendors of a given product or material or subcontractors of any trade
this includes the in cities anywhere in the U.S. and Canada. Just click on “Find Businesses” and enter
subcontractors that
work for them). a city and state or province, then a category of business or descriptive keyword.
Kenneth in Lees A woman O-B called me recently and said she didn’t think she could save money
Summit, MO through multiple bids because she was building in a small town, Burley, ID. We tried
I totally agree Google Local and found more than a dozen plumbers in the nearby area including
with Ken when it the towns of Heyburn, Rupert and Paul, and another dozen in the larger town of
comes to materi- Twin Falls a half-hour away.
als. Being “in the
trade” also, when
I need something Some distant lumber dealers have told me that they can beat local prices even
delivered to a job with the cost of shipping over 1,000 miles, so try markets at a distance from your
site tomorrow, I
don’t call around own. The same may be true of plumbing suppliers and many others. Since there is no
to 3 suppliers to threat to local customers for them, they can serve you freely.
get prices. I call
the guy that I use
all the time and The second site on the Net most-mentioned by owner-builders is eBay.com.
know will be there Not a bad place to compare prices on something if you are planning a buy. If you
on time and with purchase something from eBay, be sure to inspect the goods closely on delivery (and
the parts I need.

reject if not exactly what you expected). Also, use an escrow service (escrow.com) for Using this same
high-value items to protect yourself from paying the seller before you receive mer- logic with subs
is also very true.
chandise. Most GC’s use the
same subs over
and over after
• OwnerBuilderBook.com they build up a
relationship. The
OwnerBuilderBook.com has become the largest owner-builder site on the GC knows that
the sub will show
Internet. Since we accept no ads and do not sell or rent user lists, it is a safe place to up and perform
get unbiased resources by and for owner-builders to help you build. For instance, every time he
although thousands of links with user comments about helpful sites are offered, we calls. The GC
might get other
accept no reciprocal or sponsored links from the numerous commercial solicitations bids on items
we receive. every so often to
keep the regular
subs honest on
Our Forum discussions amount to over 15,000 pages of user questions, tips, their pricing, but
solutions, and advice. The sophisticated search function can help you navigate to not as often as
what you may be looking for when you plan. One O-B called me to ask about ICFs you might think!
So, the GC pays
for his storm-safe house design near New Orleans. He expressed a concern about a premium for the
concrete mud blowouts during construction. We did a search using the terms “ICF” comfort of reliable
and “blowout”, and got 150 threads returned that pertain to ICF in general. When subs and at the
some time doesn’t
we entered the terms with plus signs in front of them (+icf +blowout), it yielded find out that there
three threads that specifically mention the problem. He was able to do his homework are other reliable
quickly, and even correspond through private messaging with the posters as well as subs that are
cheaper!
post additional questions and ideas on the threads. Ambryn in Santa
Cruz, CA
Tens of thousands of owner-builders have made themselves available for
As I thought about
networking through Owner-Builder Connections, an editor-moderated “blind” com- this, I really want
munications utility at the site (i.e. no spam, and no visible email addresses). You can to add some more
find someone in your state or province, city, and even zip code to ask questions and ideas on how
you can beat the
share resources. The experiences of other O-B’s are afforded you through our on-line prices obtained
interviews and extensive illustrated journals (“blogs”) of many owner-builders. from other profes-
sionals:
User Tools at the website give owner-builders utilities for building calendars 1) Nichiha fiber
and for posting interactive lists that permit others to comment or answer your ques- cement siding
tions. One of the best ways to get started on a building project is to develop a list of is not available
in my area. I
your questions and a list of your resources for building. You can view and contribute was particularly
lists such as these or lists of house features and contact lists of subs and vendors at the interested in their
site. sandstone series.
I called Nichiha,
explained that I
OwnerBuilderBook.com also provides you with an extensive download gal- am a GC, am
lery of free software templates for construction budgeting, scheduling, and project currently building
my own home,
management. You can contribute your own spreadsheets and receive and make com- and interested in
ments on the work of other O-B’s from around the world or in your neighborhood. Nichiha sandstone
siding. However
there is none
locally, the clos-
est installations
are Colorado
and Oklahoma
(although there
is a distributor in
Lawrence, KS).

Kansas City is a large construction market, you could really gain a foothold here if you had a demonstration house, are
you interested in my house being a demonstration house for your product? I didn’t end up using Nichiha fiber cement
siding as I didn’t like the local supplier, but this question wasn’t limited to Nichiha. I offered my house as a demonstration
house and local reference, in exchange for a below-market price.
2) You can ask for discounts along the line of “I am a GC, I won’t put anything into houses I build for other people unless
I live with it first and can recommend it as a quality product. I am currently building a new house for myself, and not afraid
to be innovative with my finish materials. Are you willing to help?” Obviously this doesn’t work so well with lumber, wiring,
etc. but when it comes to finish materials that are highly visible in an area with little market penetration it is a different
story.
3) Lest you think I am being dishonest with these suppliers, look at these statements individually. I am a GC – true and I
have the license to prove it. I build strictly custom, no spec – true. I know who is living in my house before I break ground
– true. I am limited production – true. I am building my own house – true. You can use my house as a showcase for your
products or workmanship – true. I don’t think I had too many subcontractors that didn’t use my house in some promotional
material of theirs, whether it is brochures, references, websites, or bringing someone by to show them their workmanship,
etc. If you are willing to offer something in return for great materials, prices, and/or service considerations, you shouldn’t
be afraid to ask.
Kenneth in Lees Summit, MO
Wow, nice to see the O-B passion on this site. Please look at my post – I said “You would have to work real hard getting
your takeoffs close to an experienced GC’s price. However, you are losing out on $ per sq ft by having the whole house
GC’d.” It took me 7 takeoffs to get a price I believe is the best available. It’s work. Perhaps when you have to run things
by your boss (spouse) maybe a compromise would be to have the shell GC’d because saving ~ $5 per sq ft. (est.) isn’t
worth it. I too could tell about the savings I received. I thought it would be worth mentioning some options for people to
think of...Isn’t that what this site is about?
Jon in Merrimack, NH
Hi Jon, I don’t think anyone was directing this at you. This has been a very good example of a good question that people
were able to come up with some great solutions. There are just a lot of people on this site that are trying to get the most
value from their money (at least that’s what I’m trying to do!). I would have a hard time giving $15,000 or 5.5% to some-
one to manage the shell construction ($5 X 3,000 sf). Maybe I’m just cheap! I’m trying to get around paying someone
those fees by trying to plan every detail before breaking ground. I tend to be very optimistic, but I’m getting more jaded
as time passes! Of course, I may have to get some help with managing the shell construction myself, as I know that this
phase of construction will be the most difficult as far as time requirements on site.
Ambryn in Santa Cruz, CA
I certainly meant no offense with my posts. In the realm of O-B, you will never save be able to complete the project for the
absolute cheapest possible, there is simply a finite amount of time and resources you bring to the table. However, beating
established GC or subcontractor prices was fairly easy, and I found took a very minimal amount of time. Considering
I dropped $20K +/- on lumber, taking several hours talking to sales reps and by faxing my quantity takeoffs to many
lumberyards in the regional area to save 10% +/- is a pretty significant return on investment. I even found that the same
company with multiple locations you get different prices on materials from the different locations.
Please note that Home Depot, Lowe’s, Menards, or any of the big boxes will almost never offer you best price nor best
service (although they will offer you price match guarantee and lower quality lumber). Also note that most professionals
I know around here also don’t use the lowest price lumber available, they are looking for delivery times on short notice,
who will pick up excess materials, and other service considerations. According to a carpenter who is a friend of mine
(although didn’t work on my house), the local source I used has both the best price and best lumber – however he doesn’t
use them because of delivery issues and how quickly he can get materials on short notice. Savings on materials is some-
thing easy for an O-B to accomplish, and realistically one of the easiest tasks of the O-B process.
Sources Say
The Complete Guide to Contracting Your Home has a good section on computer programs that help the owner-builder,
like CAD, spreadsheets, PIM programs as well as internet sites. Also has a master plan, project schedule, sub reference
sheet, plan analysis, lighting appliance order, cost estimating summary and checklist, subcontractor bid control log, pur-
chase order, change order, sub agreement, sub affidavit, loan draw schedule, building contract, and building checklist in
its appendix.
The Complete Idiot’s Guide to Building Your Own Home has a chapter on “Hiring Suppliers”.
(See page 263)

Excerpts from The Owner-Builder Book: Construction Bargain

Strategies
Chapter One: Land
1-1. Buy and subdivide.
An owner-builder called me recently, said he had read The Owner-Builder Book, and he had some
questions. He said he worked for the Ford Motor Company, and that most all of his coworkers were owner-
builders. He decided to take the plunge and bought a large parcel of undeveloped land. He knew that there
was a stadium going in nearby, and figured the city had an interest in the land being developed properly.
They did, it turned out, and put in roads, sewer, and gutter at no charge to the new owner. He said that just
the day before the call he had sold two lots, and already owned his land free and clear.
Many owner-builders have saved on land by investing in a large parcel and dividing it into smaller
building lots for sale to others. Naturally this requires a big investment, but you could reduce risk by adver-
tising for a partner who like you is looking for land and dividing the cost up front. In fact the O-B above
had a partner.
Or you could just buy two lots when you find your land and build on one while allowing the other
to appreciate for a future profit. Some owner-builders have bought an existing home on a good-sized piece
of land and built on the open portion of land, while living in the home. Later they deeded off the existing
house with a smaller yard and sold it to someone else.
Be sure before you invest that local zoning ordinances allow you to subdivide and sell smaller
pieces than you initially buy.
O-B Connections:
To: Derek
From: Kelly
Re: Catalina
Derek, Thanks for the email. I just acquired a 3-ac. parcel in the middle of Feb. just south of Golder Ranch on Swan. I am going
to split 1 ac. and sell it and probably build in about a yr. The land is adjacent to my current home on an acre. I will put this home
on the market when I get about halfway done with the new home. Did you just move from SD or are you in process? Are you
building a stick house? I am strongly leaning toward SIP from KC Panels based in NM. Good R-value and easy to put up. Keep
in touch, I’d like to come visit your build and even lend a hand if needed.
Forum Post:
I feel like I’m playing Monopoly and the only places available are Park Place and Boardwalk. I live in Fairfax, VA and I would
like to build in an area close to this location, however, the land is just too expensive. There is a 1/2-acre lot for sale a block
away for $400,000. Yes $400,000 and the price was met within a few days. Just on the other side of the beltway in Maryland
it’s better, but not by much. I work at the Pentagon and the commute can be murder if I find available land within 30 miles.
I put an ad in the local paper asking for others looking for lots so that maybe we could combine our resources to purchase a
larger lot and subdivide it. However, I was told that the politics within the area makes it hard for the owner-builder to be able to
subdivide a lot in less than a year’s time. Meanwhile, the price of land just continues to rise. I am looking for any suggestions
that could help me in finding a solution to my dilemma.
by Angelique
Being an owner-builder should have nothing to do with dividing land. If it is owned outright and can be divided per zoning for
the area it should not take long.
by Phil in Gainesville, FL

You should check your city/county/state information regarding subdividing land. It is VERY expensive to subdivide land here in
Las Vegas. The reason for this is because the subdividing of land is exempt from the rules that say if you’re more than 660 feet
away from a water main then you can drill a well and if you’re over 400 feet away from a sewer main you can run septic. If you’re
subdividing land here you always have to run sewer and water no matter how far it is. Also, I was told when subdividing land you
are almost always required to have a drainage study done (min $12K) vs. that is generally not required unless you’re in a FEMA
flood zone.
Obviously these restrictions probably do not apply directly to your situation, but it is something to check into in your locale.
by Jeff in Henderson, NV
That means that it is time to move to MD! You’ve managed to pick the county that has the highest taxes and well as the highest
median home prices in the area to find lots. You haven’t gotten any replies because no one has found the Holy Grail in Fairfax
VA. A lot for $150,000! Good luck, you are gonna have to look elsewhere!
by John in Port Republic, MD
Hey there, Angelique! After reading you post, I don’t feel so bad. I am a little further south in Fredericksburg and I am trying to
make an offer on a lot this week. I can’t find a thing. There is next to nothing in Spotsy unless you want to install an alternative
type septic system or go all the way to Lake Anna. I stepped over the county line to Orange and I looked at 5 lots this week all
btw. .25 to .51 acres going for around $75K. Except every single one makes you feel like you are standing in a swamp. I hoping
to sit tight and something else will pop up within the next couple of weeks. If not, I might be offering on a lot that requires a lot of
backfill!!!!!!!!!!! How far along are you in your research? Would love to network with a few O-Bs who are local.
by Paula in VA
Forum Post:
I’m asking if anyone out there has experience with purchasing a large tract of land and dividing it, building on one lot and selling
others. Or has anyone purchased a home with a large lot and divided it so you can build on the vacant piece? Unlike Utah, the
area around Seattle is expensive for lots. Somebody’s making money, why not me? Any thoughts or experiences? Thanks.
by William in Seattle, WA
Do your research beforehand... If Seattle is anything like our area, things are ‘progressive’ now... And subdividing will require
significant hoops and cost... If I were to try to subdivide into anything smaller than 35 acre lots here, we’d do the following....
1) Pay a surveyor and engineer to draw up a new plat. You’ll need to supply new drainage, access, stormwater/water quality and
road/utility accesses. The road access stuff has to stipulate the number and size of culverts, etc.
2) A portion of the acreage would need to be placed into perpetual conservation easement. Typically, unless you can get approval
for a full subdivision, you might get three or four lots of 2 acres each, with the residual being perpetual conservation ‘open lands’.
This is the biggie. If you have enlightened politicians and committees, your land prices will be outrageous like ours.
3) Once you have the plat from your surveyor and engineer, you submit it to your county’s planning department. Here they will look
through it. There might be public meetings where you have to post and let neighbors comment. Here we have to do that several
times, and work with another group of politicos called the ‘Rural Land Use Program’.
4) Submit it for final approval, pay the surveyor to set pins, and get everything recorded. To get stuff recorded, you might have to
go ahead and install the roads, water lines, soil test for lots, power, gas, etc... The county here does this to prevent developers
from selling lots that are not ready to be built...
Good luck! I looked at doing it, and said, nah.

by John in Erie, CO
Forum Post:
Hi Tim, I crossed this same bridge three years ago. I was hunting for some land to build my house. Found one that we “love” and
could not make the decision because the price was very expensive. With some creative brainstorming, we persuaded a friend to
partner with us and bought the 20 acres of land. We are lucky. As soon as we divided the land into four lots of five acres each,
my friend sold one of his lots for a 100% profit plus owning the other five acres free. I still have mine. Plan to build my house on
one lot, and sell the other when the time is right.
So, if the land meets all your wishes, buy it. You won’t be disappointed looking back in a few years. Somebody said: ‘They don’t
make it (good land) anymore, and the price continues to go up...up.’ And it is true.
Patrick in Orlando, FL

Chapter Two: House Features
2-1. Start early.
The earlier you start your planning, the more bargains and ideas you find to make a better house.
If you start just a month before, you never see the problems or opportunities that begin to emerge after two
or three or six months of thought. Your house is built before you even see the key issues.
Suppose you start a month before groundbreaking and just come out with a budget and schedule at
the end of that month. Then you have to go with it. But we recommend working and adjusting the budget
many times over several months, even a year, before you start to build.
Check the seasonality of prices. The National Retail Federation, a trade group based in Washing-
ton, D.C., offers this calendar to help consumers look for retail promotions and bargains:
January — end-of-season fall merchandise, home goods from linens to cookware and furniture.
February — Valentine’s Day, with promotions of jewelry, fragrances and other gifts.
March — summer merchandise arrives, brides begin registering for summer weddings.
April — spring fashion markdowns begin.
May — Mother’s Day promotions, sales of athletic apparel and athletic shoes.
June and July — Father’s Day promotions, summer clearance sales.
August — back-to-school bargains.
September and October — discounts on coats, gloves and scarves.
November — pre-Thanksgiving markdowns ahead of the Thanksgiving weekend rush.
December — holiday discounts on apparel and appliances.
In like manner, there is a seasonality to construction materials. Study the principal materials you
need and see when they rise and fall. Typically, when new building permits drop, so does lumber. You
can call the building department in the jurisdiction where you are building to check numbers of permits
issued. You can’t track this if you don’t start early.
2-2. Take time.
It takes time to find savings on anything. You need to research your buys. Allocate enough time to
get the full benefit of your work. Give the most time to the biggest costs. Our single biggest line item was
lumber. I worked on lumber pricing for several days and eventually found a way to get the price down by
$8,000.
Once you start to build, you find you have no time for anything else. Take the time to work through
problems and questions now. You’ll have much better luck later if you get stuck on something.
2-3. Know what you want.
I recently reviewed 27 pages of electrical components offered at eBay, the Web’s biggest on-line auc-
tion site. I wondered if I could use some of the fast-disappearing bargains on our next house, but realized I
would have no idea until I had a detailed list of components needed for that house.

One reader wrote me: “I could have been better organized by making a proper lay down on materi-
als so I can see what it is.” The point came home again when some windows caught my eye at a lumberyard
staging a going out of business sale. There were hundreds to choose from at drastically reduced prices.
There were some double-hung insulated windows there for $25 apiece. But how many windows of what size
and style would be needed for our next house? I had no details and had to pass on the opportunity.
Chapter Three: Finances, Taxes, Loans, and Insurance
3-1. Avoid the construction loan.
I could have saved $8,000 in loan fees, interest, and title insurance if I paid cash for my project.
Some owners have sufficient equity in their current homes to pay cash for their next house. They can sell
the previous property before starting the new house and work with the cash proceeds. Or, they can take
out home equity loans to finance new construction. Interest rates and origination costs are much lower that
way.
Owner-Builder Lynn Hardy says: “Short-term loan for construction saved us $5,000.” John Rich-
ardson says: “Build one, use it for an equity loan, and get loan for much less to build second one. Live in the
first one and get tax savings.” (Because this particular loan is tax-deductible.)
Forum Post:
No lender will loan on a non-finished home unless it is a hard money loan and even then they will require an appraisal and you
will be squashed. Lenders do not like to loan on half-finished properties, I have seen deal after deal die on the vine because
people did it this way. If you need more money from a bank ‘cause you run over, you’re dead. Don’t do it unless you have plenty
of overrun funds and awesome cost estimates up front, and by awesome I mean detailed down to every nail.
However, if you do, doing it all with your own cash is FAR superior. No interest cost, no financing costs, etc., you will save
HUGE. And then when you pull a HELOC (home equity line of credit) when the house is finished to pay back your friends, the
rates will be lower, payments lower, financing costs almost nil to nil as a lot of HELOC companies do no-closing-cost HELOCs
to 75% LTV. This is a dream come true, and most people don’t do it ‘cause they don’t have the hundreds of thousands in cash
sitting around.
But yes it’s possible, anything is, especially when you have the cash, because he who has the gold makes the rules.
by Baine
3-2. Negotiate your loan.
When you apply for a construction loan or mortgage, get good faith estimates from several eligible lend-
ers. These give all of the costs involved just like a construction bid or estimate. Enter the various costs in a
spreadsheet for comparison. Let the lenders compete for your business. O-B Kathy Maggiora says, “There
is a list of mortgage guys and their rates in the real estate section of the Sunday paper. We called the lowest
guy and it worked great, no surprises.”
Remember, too, that the points charged up front are negotiable. I called five or six lenders when we decided
to refinance our house. The origination fees offered ranged to up to 2.5 percent. (2.5 percent of the loan
balance.) We had several offers of 1/2 point. The best offer was for 3/8 of a point.
Forum Post:
We are looking into UBuildIt to build our new home. We have good credit, own our property outright, have money in the bank,
very little debt and earn a decent middle-class income. Should we consider trying to negotiate a lower interest rate (if we think
it’s too high) with the bank (probably IndyMac) and/or ask UBuildIt to consider charging us a lower percentage rate for their

service because we believe we’re a desirable client or are these things generally non-negotiable? Thanks for any information
you can offer.
by Laurie
We are also using UBuildIt in central Indiana. After talking with IndyMac, I was very disappointed in the service I received.
We’re probably going to go with our local bank here in a very small town. The rates are lower and the terms comparable. I was
also surprised that while UBuildIt has IndyMac as a referred bank for financing, they have found recently that people have a
lot of problems with them. Shopping around is always a great idea. I hope you are doing that -- or have done it -- best wishes
on your new home!
by Jen in Bloomington, IN
Jen, check out agfirst.com, they might be able to give you a decent rate as well. We are using them to purchase some
hunting land in central Texas.
by Jim in Austin, TX
Thanks a bunch, Jim! I emailed them and asked for some info. Our town is small enough that it may even qualify for the Farm
Credit loan, which would be great. Much appreciated!
by Jen in Bloomington, IN
Let’s face it; just about anything is negotiable provided you apply the right leverage. From the sounds of it, you seem to be in
a position to bargain on any number of levels. Don’t know how far into your financing you are with IndyMac, but you may want
to shop around for additional rates and possibly pre-quals at any number of lenders. With their rate information in hand, you
should be able to negotiate with IndyMac to get their business. At the least, if you don’t ask, you will never know what you
actually could have obtained ratewise. Go ahead and bargain...that’s why you’re an owner-builder and not just the average
“pay full price to have your house built” person. Good Luck!
by Mike in Budd Lake, NJ
Forum Post:
(Smiling ear to ear) :) This is Baine. heh-heh. Boy did I stir things up, right on!! That’s what everyone needs is to be able to
look at things objectively and as a devil’s advocate sometimes. I like a little bit of “in your face” finance. There was extremely
too much BuildMax-only input and chatter going on in here so I stirred up the pot a little and hopefully everyone is looking at
things more objectively. Companies like BuildMax are trying hard to corner the O-B’s out there on this site and others into
thinking that they are the only way to go, and you have to do it their way or else. This is an O-B site where everyone is trying
to do it a BETTER way and cut out the middleman builder, etc.. to save money. Why not cut out the middleman BuildMax also,
the same exact principle applies here and it’s about time someone saw it.
I have to laugh that the owner of BuildMax posted here in response to my posting, even denying some of their obvious and
regular practices. I can give him credit that he might not have ever called his own company or looked into being a client of it
therefore he might not know how his employees treat people or what the actual client goes through in trying to gain information
from them, but to say they never pull credit from a client and that they give answers to them without having all their information
first is just purely and utterly false and anyone in the world can figure this out in two minutes just by even reading the BuildMax
website. He really hooked himself on a number of points as it is CLEAR what their process is and his own website procedures
contradict what he says. I guess companies like this just don’t like to have a strong advocate who knows his stuff biting into
their business a bit...sorry BuildMax, I guess you’ll have to start working harder for your clients’ money. :)
O-B’s out there, you are doing tons of research on hiring contractors and every part of the homebuilding process, don’t stop
when it comes to your financing. To talk to one company like BuildMax when The O-B Book says always get 5 quotes from
contractors is just plain ludicrous and purely goes against everything The O-B Book states. If BuildMax is the ONLY place
where you can get the job done, well then do it. But since they won’t give you any info up front without having anything anyway,
why use ‘em? And if you don’t meet their criteria, like so many have posted here, they won’t even bother to call you back.
They cherry pick and those of you who really need help and info, you won’t get it. And when they go through IndyMac almost
exclusively anyway, just type in indymac.com and save THOUSANDS! Put in your hot tub, buy that Harley, landscape like
crazy, get that big screen plasma, or whatever your heart desires that would have just ended up in some BuildMax rep’s pocket
anyway, because you didn’t follow the cardinal rule of The O-B Book and look elsewhere. And if you like giving away that kind
of money, well, just write me a check, I can put it to better use then any BuildMax rep could :) cheers, Baine
P.S. (working on putting together a 50-unit spec project right now, God, The O-B Book is good.)
by Baine

Chapter Four: House Plans
4-1. Sell your plans.
A designer spoke at our Owner-Builder Workshop and drew applause by saying “the plans I draw for you
are yours, you can do with them what you want.” Most designers and architects retain ownership of the
plans the develop for your house, but it is negotiable. One reader paid $1,000 for house plans and sold them
after completing her house for $250 in the classified ads.
Forum Post:
I did consider buying a copy of Chief Architect and a plotter on eBay to do my plans but I have run out of time...I think I could
have saved quite a bit of money, especially when you consider the option of reselling them. In Colorado, you still need to have
the plans wetstamped by an engineer and I have a designer/engineer that will do both for $2,500 so I am going that route.
by Ralph in Wellington, CO
4-2. Use a designer rather than an architect.
The usual system of architect fees involves paying a percentage, (up to 10%) of overall project cost to the
architect. This creates a conflict of interest, in my view, because if the architect makes choices that increase
the budget, the fee also increases. It certainly demotivates the architect to save you money. Many residential
designers are in fact degreed architects, and you can get fine creativity from residential designers, degree or
not. Check designer portfolios to find the artistry you want when choosing a designer.
We have a beautiful house design, and our total fees to the designer were well under 1% of the job. In addi-
tion, we had complete freedom in choice of materials and methods and built quality for far less than if an
architect had directed the process. Perhaps 50% less.
Forum Post:
There are several fee schedules that both architects and designers use. I found fee schedules of hourly, percentage of house
construction, square footage of finished design (some based on total square footage including garage, some just finished
square footage, all different). These fee schedules all seem to lead to conflict of interest – what incentive does the architect/
designer have to save money when a larger house increases their fee and profit? With my architect, I negotiated fixed fees and
scope of work prior to him starting. When he got another large design job (he was a single proprietor), I was able to negotiate
another 20% savings if I could work on his schedule vs. my original schedule. If I need additional consultation with him or want
more construction inspections, etc., we also have a fixed hourly fee that I will pay for this service.
by Kenneth in Independence, MO
Forum Post:
I found my plans on the Internet, however I’m going to get a local designer to draw them up. I have an appointment next week,
the guy sounds nice on the phone, the price is reasonable ($.55/ sq. ft.) I already have a personal reference for him, should I
feel obligated to use him, or should I go consult with multiple designers?
by Alexandra in Zachary, LA
Alexandra, at a minimum, you should see if the original designer can make your changes. They are already familiar with the
plans and the changes will probably be by the hour instead of the square foot. Also, for your designer to make any changes,
he/she must have permission from the original designer to do so or they will be in copyright violation. Essentially, if the original
designer finds out, and they will, they can take the house if you build it.
If your designer is willing to acquire a notarized release letter from the original designer, then proceed only with a contract that
you and your lawyer agree upon. If the designer ‘can’t wait’ for the release, you ‘can’t wait’ for them.

One of the reasons I chose to design for 50 cents a s.f. was to drum up business in a poor economy. Things have drastically
changed around here, but I no longer design for profit – too many bad checks. The drafting market is essentially hot nation-
wide. There is no reason to draft for 55 cents anymore. Unless of course you lack the experience to charge more.
Given all that, I would ask around and get additional pricing. ‘You get what you pay for’ definitely applies in this case. Be very
wary of the ‘good deals’. Drafting a set of plans takes time and lots of consultation between parties. Modifying a given set of
plans usually requires more than a few changes would produce. A house is a system, making changes to the system affects
every part of that system. Each change needs to be planned for, engineered, and must be buildable or you are just wasting
money.
Sorry about the length, but overall, planning ahead will save you money and aspirin in the long run.
by JimCadman in Austin, TX
I’ve seen many plans that are similar in style to the one I’ve chosen. I’m not getting a release from everyone whose plans
look like that. Anyway, I’m using a designer or architect because there is some stuff that I am changing about the plan, layout,
room size and location and some other things. I have specifics in mind. I have a friend who bought her plans off the Internet
and had to spend $3,000 for someone to bring them to local code. I do agree that $.55/sq. ft. sounds low; I’m going to look
around and see...
by Alexandra in Zachary, LA
I would not treat a designer or architect any different from any other supplier or subcontractor. We interviewed dozens of archi-
tects and designers before we found one we really liked and were comfortable with using. However we were also not looking
for something mainstream (trying to find an architect willing to use ICF was a challenge in itself).
There is more to design than choosing the lowest bidder. As with anyone else, there is a reason they charge less than their
competition, and before selecting them you need to know why. I wouldn’t discourage anyone from using the low bidder, just
understand why they are low and make an informed decision.
Alex, we were very pleased with Nolan (if that is who you are referring to). His demeanor is a little dry, but knows his stuff. His
prices are lower because he works out of his home and doesn’t have a lot of overhead (just him & his dad). His turnaround
time was quick and he was willing to come up with several possibilities when we weren’t sure what we wanted. We spent a
couple of hours out there each time we went there and he never rushed our decisions.
I would interview a couple of them if you want to – it depends how comfortable you are with them. Nolan came recommended
to us from one of my husband’s co-workers and he was also very pleased with him.
by Heather in Baton Rouge, LA
Forum Post:
Here’s a recommendation for a floor plan designer from southern MI. Don’t know what his radius of travel is, but if you are
in southern Michigan or northern Indiana it’s worth a shot. Jason Farmer of Straightline Home Design in Marshall, MI, did a
nice job with our plans. He was timely, charged 35 cents per square foot and $5 for each extra set of plans. PM me if you’d
like his number.
Aimee
Do you have an email address or phone number for this designer? I’m in NC, but for those prices it may be worth it for me to
meet him.
Scottie in Durham, NC
PLEASE keep in mind that you get what you pay for when you go with ‘cheap’ designers. There is something they aren’t includ-
ing in your plan set, something they don’t know, or something they are omitting to charge you extra later down the road. Does
$0.15 per s.f. include ALL the interior and exterior construction details? How about the cross section or accurate elevations?
Cabinets details, interior elevations, electrical plans, and plumbing plans too? Is the building designed to IRC 2005 code? How
about the NEC? Does these plans meet this criteria as well?
Is the plan designed for the land it will sit on? Do they recommend the use of a structural engineer and suggest a soils analysis
to ensure proper foundation construction? Keep in mind: if the foundation sucks, the rest of the building will too. Just because
you don’t live in a big city and have a permit department to answer too, doesn’t mean your building doesn’t have to meet the
building codes. Since there is no “official” plan reviewer and inspection department, that is all the more reason for your plans
to be right the first time.

Fifteen cents sounds great, but it really might be better to check around a bit more to make sure you are really getting the ‘good
deal’ you are after. I suggest calling the local AIA chapter or checking here as well: aibd.org/consumers and order their
free guide to residential design. Might be the best time you have spent so far. If you have any questions, or need clarification
on what you are getting with your plan sets, then shoot me a PM and I will answer them the best I can or get the answers for
you if I can’t be of help myself. Good luck.
Jim in Austin, TX
Jim, thanks for the input on the plans. I’m sure it’ll get a lot of people thinking. Our $.35/square foot got us all the extras you
are talking about (all interior and exterior construction details, cross sections, accurate elevations...). We knew ahead of time
that the land was good to go for what we want. Didn’t think about difficult foundation situations because that doesn’t apply to
us. You make a good point, though. Hopefully, people will ask the right questions of any designer they use.
We left out electrical plans on purpose as our building department will leave that up to the subs. Besides, we didn’t want elec-
trical plans that we knew we’d almost certainly change after our walk-through with our electrician. Lastly, our electrician (who
we selected before all this) didn’t need them either. I guess I’m not completely sure what you mean by cabinet details, though.
They’re there, but not in detail...like the way Home Depot (or whomever) will do for us. Is that what you mean?
In terms of the low price, I can only speculate. I know our designer is building his business. He’s been designing on the side
(while working full-time elsewhere), but finally had to give in and go full-time last year when demand really took off. Word of
mouth referrals is how every good entrepreneur gets his start, right? I doubt his price will stay that low for long.
Aimee
Forum Post:
Planning to do a spec build, is there any way to find, select and submit a set of house plans for the building permit without
using an architect? It just seems like we will save plenty if we did not have to use an architect. What if we mimic the plans for
a house already under construction nearby?
Ray
Ray, we designed and drew our plans ourselves, But not knowing the ins and outs of ICF construction, we hired a draftsman.
He gave us the plans and we hired an engineer. No need for an architect. I know you are looking to save money, but having
the engineer available was/is a great advantage. Together our cost for both services has been $3,300 for 5,280 under roof. I
have heard of some plans costing over a dollar a foot. One friend paid $8/SF for his. Over course the details on his plans were
unbelievably intricate compared to mine.
In our county if you build under 2,000 SF, you do not need a stamp. Good luck.
Marc in Defuniak Springs, FL
That sounds much more reasonable. Did you have the engineer draw up the plumbing and the electrical plans?
Ray
Ray, you don’t identify where you are located. The requirement for an architect will be dictated by your local code officials. In
some states, you need an engineer’s stamp to build. In mine, an architect or engineer stamp is unnecessary unless you are
doing certain things (a roof or floor truss plan needs to be engineered, a suspended concrete slab needs engineering, if you
are outside the code book for ICF headers you need engineering, etc.). Even though I identified that engineering is needed,
an architect stamp is sufficient.
Even though an architect is not required, understand that a good architect will save you more money than the fee charged. I
didn’t need an architect, I had a good concept of how I wanted my house to flow and had a draft set of plans before we started
interviewing architects and designers. However the architect identified many things in the plans, optimized them for my build-
ing method, simplified them and yet made them appear more complex, and ultimately made them easier to construct. I am
convinced I could have done the job without the architect, but the final house wouldn’t be as nice and it would have cost me
more money – this is the value of a good architect. That said, I could have hired another architect, paid more money for the
services, and ended up with little to no value for my expense too, but then this is true of any of the services I hired out.
Kenneth in Independence, MO
I’m in Long Island, New York. I understand that a good architect can save considerable time, effort and costs. However, in my
case, if I am doing a spec build and willing to utilize the same plans of a recently constructed home with slight modifications,
I could get by using these plans and possibly have an engineer stamp them without risking anything.
Ray

Chapter Five: Shopping Techniques and Sources
5-1. Home show discounts
When the building products vendors get together to display at a home and garden show, there is an
atmosphere of competition for your attention. At these shows, many vendors offer trade show discounts.
We purchased our whole house vacuum unit at a savings of 40% this way.
Where there is no discount or coupon offered, you can ask for “show special” if you use that sub or
vendor in the future. Just make a note on the exhibitor’s business card, and have them initial the card.
Some exhibitors ship sample products to each show they do and plan to sell them off to avoid
return shipping costs. Jane Himes found a $2,100 jetted tub for $300 at a show in Las Vegas. The exhibitor
did 84 shows that year and shipped 84 tubs one-way.
Owner-Builder Connections:
From: Lynnette W.
To: Eric
Subject: Tile
How is your floor plan planning going? We were able to buy 4,500 sq ft of tile from Pino Tile at the Home and Garden show over
the weekend. We have been looking for this rectified travertine look porcelain tile for months and have not found it cheaper than
$4 a sq ft. We found it there for $1.66 a sq foot. We really lucked out.
5-2. Attend a contractor show.
It is especially illuminating to attend a show for contractors. We went to the giant JLC Live Show
in Las Vegas one year to try the waters. JLC, The Journal of Light Construction, stages the show every Sep-
tember, attracting contractors from all over North America. You can register as an owner-builder, because
for the moment you are engaged in contracting. It’s easy to register on-line, with a discount for advance
payment. (Link provided on our website.)
Many competing construction system vie for contractor attention, presented by the manufactur-
ers, not third-party vendors. There are opportunities for show discounts, coupons, (I got one for $500 off
an SIP system) and the sale of floor models of components you may need for your project. Manufacturers
would far rather sell a show model of a device like a radiant heat boiler or heat exchanger than ship it back
to the plant after the show.
These shows are also a great source of information from national experts on ways to save money or
trouble when you build with their products.
Forum Post:
To all those O-Bs in the Northeast...the Builder’s Trade Show is coming up. I went to the show last year. Admission is free,
if you register before January 30. They offer two days of live demonstrations on how to do everything from installing a new
window, to using I-Joists and how to drywall a barrel ceiling and much more. The other advantage is the vendor booths where
you can get lots of info and get some good deals. The show also offers training for a fee. I haven’t tried this, but might this year.
Here is a link for more information: builderstrade.com.
One other nice advantage...I got the “Professional” rate on several of my building magazines (10 bucks a year) by attending.
Fine Homebuilding/Taunton Press is the sponsor for this show. The Journal of Light Construction (JLC) has a show later in
the year.
by Peter in Gilford, NH

Yes, this was a very good show to attend. I went last year but ended up paying forty dollars, I believe, because I forgot to pre-
register. I’ve already registered for this year’s show, very informative, lots of ideas and how-to’s and lots of new products. I’m
in the final stages of building now, but these shows are wonderful; much better than a home show.
by Mike in Hopkinton, MA
Forum Post:
YIPPEEE! My partner just found this. It works, I registered us. It is a 4-Day, Exhibits-Only Pass: Free Passes for 2006
Builder’s Show. My partner says you may give her shoes as a finder’s fee...
by Phil in Gainesville, FL
Very Cool, we are in there as well. See you at the show!!

by Marc in Defuniak Springs, FL
Just made reservations as well. I’m in the early planning stages for my build, this show looks fantastic! Those of us from this
website ought to figure out a way to meet up in Orlando and trade tips from hitting the show floor.
by Steve in Sterling, VA
You’re right, I would like to put a face to the threads. We have not made reservations yet but we are coming on Thurs. night
and staying thru Sat.
by Marc in Defuniak Springs, FL
Just a bit of advice when going to the show. Wear good walking shoes. Start walking to get in shape, now! And a lot! You will
need a minimum of 2 days to see it all, and that is without any seminars. Your head will spin with information overload so make
sure you scan the card they give you for whatever booth you want information from, they will send it to your home. (This will
also keep your hands free to carry the freebies they give away!)
An insider tip: If there is an item at a booth you like i.e., dishwasher, wine fridge, or other appliance type items, ask how much
to buy it. They don’t want to bring them back, so they sell them at roughly half off list. I think you have to do this very early in
the show though. It doesn’t hurt to ask, right?
We did the biggest building first and never did get to the smaller one nor the off-site or outside exhibits, so look over the reg-
istration info they send you and devise some sort of game plan that suits your purpose. Have fun, get great ideas and save
money!!
Don in Port St. John, FL
Chapter 6: Remodels and House Additions
6-1. Buy tools from pawn shops.
If you are doing self-work, it is very valuable to have high capacity tools to get a job done right. But
an O-B doesn’t make daily use of the tools, and it’s hard to justify paying new prices. We have seen signifi-
cant construction tools like air compressors and paint sprayers for twenty-five to fifty cents on the retail
dollar at local pawnshops.
O-B Toodie West says: “We got a Senco Finish nailer for $200 at a pawn shop. It was $450 new. Try
Cash America, they have a network and will call around and find the stuff you want.”
6-2. Share the cost of tools.
Since good tools are expensive and for many owner-builders, rarely needed after the project is
done, several strategies can be used to bring the cost into balance:

Rent a tool and share the cost with someone else in your new neighborhood who is also building.
Buy and resell.
Buy and use, and then trade for other services you need.
Borrow a high-value tool overnight from a tradesman on your job who will expect it to be ready
to go in the morning. We borrowed a tile saw from our tile man overnight because we did a portion of the
tiling in our house.
Buy and share the cost of tools with family members. Have a tools lending library. Steve Orton did
this with his brothers for tools like a high-end drill and a reciprocating saw. Karen Morrison’s extended
family did it with a pressure washer.
6-3. Shop discount tools store or catalogue.
When we built the Riverbottoms house, a friend told us we would need a bolt cutter “for all manner
of tasks”. There’s a lesson in the fact that we only used it twice while building. Men are famous for buying
tools they don’t need.
We searched first at the home center stores and found a 15% swing in prices from the high to the
low store. Using the high store we price matched the low store and got the tool for $28. Only years later did
a discount tool store open in town and we found a comparable bolt cutter for $12 on special at $6.
That chain, Harbor Freight Tools, has stores in almost every state of the U.S. and sends out a sales
circular to a mailing list. (Contact info available at our website.) In the current sales circular, they have a
comparable reciprocating saw (“Sawzall”) to the one I bought on a double play for $89, at $35. An 18-volt
cordless drill with case is $40. I’ve seen them recently at around $200 elsewhere.
Chapter Seven: Material Savings
7-1. Written budget
All of your construction bargains need to fit within an agreed budget. Unless that budget is in
writing, it is a moving target. Say you find a bargain on wood flooring at only three thousand dollars, more
than fifty percent off the agreed price. You make an advance purchase only to discover that you can allocate
only $1,500 to wood flooring for lots of good reasons. Make the budget decisions first and carry the written
budget with you.
Reader Ted Magleby told me: “I will get the best numbers I can from a contractor friend who will
break down the budget, and tell me what he pays for everything. Then I will try to beat it. It will be detailed
with brand names, and all.”
7-2. Use a spreadsheet.
There are thousands of unique items in a new house. The task of managing them is overwhelming.
A spreadsheet on computer solves a problem by keeping the items all in one place with infinite flexibility for
organizing, editing, pricing and totaling categories. At a glance, you can see how your planned purchases
in a category compare to your budget decision for that category. You can use subsheets for comparison of
items, brands, and alternatives.

Chapter Eight: Free or Cheap
8-1. Free stuff
When we built the Riverbottoms house several free items fell in our lap, worth over $10,000. A rela-
tive paid an old debt by sending over a concrete man to do our walks and drives. The city sidewalk cracked
when the roofing truck wheeled over a corner of it making a delivery. I noted the name of the driver and
the date and replaced that part of sidewalk when a crew poured the cement pads for my back stairs and air
conditioners. I took the concrete invoice to the roofing supply company and they paid it all, no questions
asked, rather than quibble over how much each piece of concrete cost.
After a boundary disagreement, a neighbor sent over 30 loads of topsoil for our yard, valued at
$4,000. Another hauler brought me 10 dump truck loads of composted manure at no charge. Our founda-
tion man gave us a free window well. Our siding man gave us free bathroom tile. Someone we had helped
build gave us bricks for our brick walk.
O-B Bill Harrington says: “We’ll be able to put in top-end stuff for a moderate amount of money.
I got low-voltage quartz halogen spotlights from a friend, like they use in supermarkets to accent displays
– they bring the color out. He had them left over from a job and they were going to be thrown away because
they were special order, and I can use them in the house to accent sculpture and other art. Also over the
kitchen island, and for reading and music lights.”
Scan the classified ads or place your own ad for items that you need, offering to haul away and clean
up. Be alert for internet promotions involving free stuff, too.
Forum Post:
I have a large fireplace and exterior chimney that I am going to do in the cultured stone. A friend of mine gave me 5 pallets of
the stuff that was left over from a large commercial job at Disney World. I will have plenty of it to do a lot of other things with it
as well. Was just hoping there was an easier way to do it with the ICF. The chimney framed through the roof and dried-in.
Alvin in FL
8-2. Free upgrades from friendly subs
Even better is completely free upgrades from friendly subs already committed to your job. By working
closely with their subs and asking for suggestions, Jeff and Judy L. of Provo, Utah got a $5,000 add-on for
free from a drywall sub who was anxious to please and keep competition out. The upgrades often have very
little real cost for the sub once they are set up and their marketing has been done.
Forum Post:
We are just about to (finally) start as first time owner-builders. We feel like we have thought this to death. Hopefully we haven’t
missed anything. What we have found is subs come up with the best free advice and ways to save. You just need to let them
know you have a tight budget. For example, our brick mason told us he would try to help us by finding brick that was just off
on the color by a few shades...the savings could be up to 50%! Our painter said he wouldn’t charge us to finish a fiberglass
door. We got a suggestion of wrapping the house before windows, cutting out the wrap material and installing the window with
this extra seal. Also marking the studs on the foundation with a marker. When we asked our electrician how to do lighting on
the stairs he said he would do it for materials. (I am sure that was more of a “it’s more trouble to tell you than just do it...”). We
have found leftover tile that will finish a basement bath, it’s top of the line just not enough to do a kitchen or what we are using
in main areas. Anyone who has already started or built, advice is welcome. We are jumping in with both feet. The biggest
surprise to date is the cost of our lumber pkg. has jumped since spring, but not much we can do about that one. We have put
in more than 1,000 hours, so hopefully we will see the payoff.
Connie in Syracuse, UT

Chapter Nine: Shopping Techniques and Sources, Part Two
9-1. Shop eBay for components.
Forum Post:
I know it may sound crazy, but I have saved thousands by buying items on eBay – everything from fireplaces and kitchen appli-
ances to bathroom fixtures. I do a search on eBay for the item I am looking for, find out what it is selling for and then compare
to local vendors. In most cases, the shipping is a wash to what local sales tax would be so the difference is your savings. One
caution, check the seller’s feedback for negative comments and past problems. I even found a great deal on stair components
which were 50% less than local suppliers. Good luck!
by Mark in Park City, UT
Hi Mark, I have heard the same thing. I plan to purchase lots of stuff through eBay.
by Denise in Elk Grove, CA
eBay can indeed be great, but beware when purchasing large commercial grade appliances like Viking, Wolf, etc. There are
a lot of thieves out there on these. Contact me if you plan to buy, there are many ways to spot those that are thieves and not
legitimate.
by Barbara in Elko, NV
I have a tough time finding a deal on eBay. Seems like every time I look for a specific item, including tools, everything I find
sells for near list price. I guess you just have to work to find the good deals. For instance, I was shopping for cedar shingles
a few months ago and couldn’t find much. Today, I see a listing for cedar shingles that are currently at $85 per square, with a
buy now price of $130.
by Jon in Ellicott City, MD
I found eBay to be a great resource for plumbing fixtures. I bought all my bathroom and kitchen fixtures on eBay.
by Sharon in Nine Mile Falls, WA
We also saved by buying our appliances on eBay. We bought a whole kitchen stainless steel appliance package for $3,800.
One thing I learned, I always check the packages before the delivery people leave and note any damage on your waybill that
you sign. We didn’t catch a dent until we unwrapped everything and had to really fight to get the shipper to pay for it.
What website store were you able to find your appliance package in?
by Paula in Fredericksburg, VA
Not sure if they are still on there or not but we bought them from Explorer Appliances.
9-2. Home center store remodels
Forum Post:
The greatest info on Home Depot – Home Depot is in the process of remodeling all of their stores that are four years old or
older, check with your local Home Depot, ask which ones are being remodeled in your area, one week before the department
is remodeled they will set up a clearance area with 50% off everything, I paid $80 ea. for all of my Anderson 400 series win-
dows as well as my solid pine split jambs for $85 ea, shower stalls for $100, Fabulous Savings!!!!!
by Tom

Chapter Ten: Labor Savings
10-1. Trade.
You could trade almost anything imaginable to subs and some vendors in lieu of cash. You could
even loan something you own, like a tool to someone in trade for something you need. Tradesmen are
famous for doing this between themselves. One tradesman, Ron Thorgersen, offered O-B Joanie Low gran-
ite countertop for the price of Formica. He got the granite because he had done some trade work with the
countertop man. Meanwhile Joanie, an attorney, in turn did legal work for Ron to pay much of the cost of
framing, excavation and foundation for her project.
Mike Cambiano told me, “I am doing some trade labor, I have a lot of skills, but I am going to
manage my electrician’s project for him. My wife also has management, money and accounting skills.”
O-B Sharmisa Martin says that her husband is an electrician: “We’ve already started doing trades,
one is to a carpenter, where we have $500 credit built up already. This way we’ll be able to get our trades
accomplished in not too long a time after we build.”
If you have something to trade, you could talk to all your subs and vendors, and ask them if you
can trade with them. Make it a standard question in your sub and vendor interviews. You could turn up a
bargain before you even ask for bids.
Forum Post:
As for electrical boxes, I am using the kind that has a metal clip with screw holes on one side of the box. I am screwing them
to the webs. They are also 3” deep and fit perfectly with the 2 1/2” foam. A friend of mine is an electrical contractor and he
got them for me through his supply house. He is letting me get everything through his business at cost and I am doing all of
the grunt work of hanging all of the boxes, running all of the wire, etc. He is charging me by the hour to finish it off after I get
everything in place. Will save me several thousand dollars this way. I am in the middle of this project now.
Am doing the same type of thing with another friend who does all of the low voltage stuff. I will do all of the grunt work for the
alarm system, computer and satellite networking, surround sound, audio system and whole house vacuum system. He will
finish it off after I get everything in place. He is supposed to drop everything off this afternoon so I can do this along with the
electrical stuff.
Same thing again with the HVAC system. My neighbor is in the business and is getting everything at cost and helping me put it
in. He will be owner-building later this year and I will be passing along all of my experience, subs to use, where to get materials,
etc. to make it easier for him. Will also give him a hand with his ICF in trade for his work. Hopefully will get to that next week.
It helps to know people in the different trades. It saves a lot of money if you have the time and are willing to do a lot of the work
yourself. I have been doing similar things throughout the whole project.
Alvin in FL
My plumber is doing the layout from my plans. I just have to take him fishing and catch a couple of groupers. The fuel should
cost me about $300 and that seems like a fair trade. Especially since I need a few fish in the freezer as well. My neighbor has
an A/C business and he is going to cut all the duct board and let me install it. Only charge me for materials. My excavator has
not charged me anything to date and I just am going to let him come and go as he pleases from my dock and catch a few big
bass. My new neighbor is a carpenter and needs a boat. I bought a $50 fiberglass one and will set him up with a trolling motor
I got at a garage sale so he can fish the lake and he is going to help me on the trim work.
Use a little imagination and you can barter anything. Especially with all the junk I have to trade...I am especially keeping an
eye on this thread because in a week or two I will need all the tips I can get. Keep ‘em coming.

Chapter Eleven: Material Savings, Part Two
11-1. Buy in quantity when you find low prices.
If you know how much you need, get that much. But it doesn’t hurt to buy extra if you are uncertain. Check
what the return policy is. Sometimes if you need more time before returning items, the manager will initial
the receipt upon purchase to give you more time. This assures a cheerful refund later.
11-2. Save your paperwork.
With receipts, you can get refunds on items you don’t need or decide you don’t want. You will have a very
large stack of receipts after you build, so you need to organize them for convenience. The receipts provide
model numbers and technical information that can come in handy later. Check your receipts. I found
errors of $350 in my favor in an hour of checking one evening, and got refunds. After we finished the house
I gathered up all the excess material (tile, balusters, unopened painting supplies, caulk and adhesives, etc.)
on site and matched it up with receipts in my file. I got nearly $500 in refunds from various vendors with
no questions asked.
On my first home, a receipt came in very handy because the fence installer had charged sales tax on the
labor and materials, and state law didn’t allow sales tax on services. They said the mistake was mine, that
the right amount had been charged, but the receipt showed sales tax on the entire transaction, which
resulted in a nice refund.
If you have doubts about a material purchase, because you aren’t sure of quantity, or you are buying far in
advance to take advantage of a discount, get the manager to initial the receipt to indicate there is no time
limit on your return. This worked for us at a home center store when we brought back things a year later,
and waited while they told us all the reasons we could not return the item. Then we showed the signed
receipt and the discussion was over. The old manager was gone, but the signature indicated a store commit-
ment. Very easy to get this at time of purchase when they will bend over backwards to get your business.
11-3. Shop for credit terms.
Some suppliers will take two percent off your bill if you pay within ten days. Other suppliers will give you
generous credit of 90 days or more without interest. We got our carpet and wood flooring under a ‘one year-
same as cash’ arrangement. Oftentimes that same supplier who has given you 90-day terms will accept
your credit card at the end of the period as a “cash payment” which allows you more time and frequent
flyer credits.
Chapter Twelve: Energy Savings
12-1. Save the shade trees.
It would be very desirable to find a place to build where there are big shade trees because they have
a wonderful capacity to reduce cooling and heating costs. According to residential energy auditor Dan
Schuring, you can reduce or even eliminate air conditioning in some homes with just a few shade trees.

12-2. Build energy-smart.
Orientation, insulation, and mass are the three things Melissa Dunning of Denver, Colorado says
bring her low heating bills. Her mother, the general contractor on Melissa’s house, says: “It shouldn’t take
more than a good argument to heat a home.” She was featured on Dream Building on HGTV. She says her
heating bills are only $10-$15 a month in winter. She uses insulated curtains over the windows that she
puts down after the sun goes down in winter and when it comes up in summer, completely covering the
windows.
The U.S. government has an “Energy Star” program offering builders and owner-builders incentives for
building to a high standard of energy conservation. A government-approved energy consultant must verify
the airtightness and energy features of the home. (See our website for updated link to government site.) If
you build to EPA standards, you may get an upfront state or federal tax credit, or possibly mortgage dis-
counts, or special utility rates, or all three. The EPA can issue you an Energy Star rating which will help to
attract a buyer when you sell, as well.
From energystar.gov: “ENERGY STAR qualified homes are independently verified to be at least 30% more
energy efficient than homes built to the 1993 national Model Energy Code or 15% more efficient than state
energy code, whichever is more rigorous. These savings are based on heating, cooling, and hot water energy
use and are typically achieved through a combination of:
* building envelope upgrades,

* high performance windows,
* controlled air infiltration,
* upgraded heating and air conditioning systems,
* tight duct systems and
* upgraded water-heating equipment.
These features contribute to improved home quality and homeowner comfort, and to lower energy demand
and reduced air pollution. ENERGY STAR also encourages the use of energy-efficient lighting and appli-
ances, as well as features designed to improve indoor air quality.”
Forum Post:
I am trying to find out any info. available to help decide what kind of HVAC system to install in our new 3,000 sf house we plan
to build. Which type is cheaper to install or ‘use’, as opposed to the other? We are building in the Smithfield, Virginia area. I am
considering putting in a well for water vs. tapping into county water, if so, maybe I can use the well for the geothermal system,
or since we do not have natural gas available, may consider propane gas, or electric, depending on overall cost/comfort.
by Carolyn in Newport News, VA
Before committing to a natural gas A/C system, take a good, hard look at CURRENT costs for natural gas in your area...
especially compared to 5 or 6 years ago.
When I found out that natural gas is available in my new neighborhood (in Miami), memories of nearly-free natural gas from
my childhood in Ohio (and parental encouragement, because they had the same memories of it) almost got me to go with
natural gas A/C.
Fortunately, I did some cost research, and discovered that the cost of natural gas has been SOARING for the past few years,
to the point where it’s absolutely NOT cheaper in any way, shape, or form to use natural gas for A/C. Especially when com-
pounded on top of problem #2...
... conventional wisdom also holds that gas A/C also saves money, because gas is allegedly dirt cheap in the summer because
gas companies have to reserve enough pipeline capacity to meet their worst winter needs. Unfortunately, that also went out

the window in Miami...for all intents and purposes, gas furnaces don’t even exist in Miami (it doesn’t get cold enough to justify
the cost), so there isn’t a peak winter demand to drive down summer costs, and the cost is basically the same year-round.
Sigh. I was really looking forward to paying a hundred bucks a month for humidity-free 70-degree comfort year-round (vs. the
$200-350/month I currently spend on electricity in the summer).
by Jeff in Miami, FL
What about ‘Propane’ gas though? Or does that rise with the ‘Natural’ gas prices? And what are your thoughts about ‘geo-
thermal’?
See the other threads in these forums for geothermal information. A well-designed geothermal system will be the cheapest
to operate, and the most expensive to install. In some areas, geothermal can be 2-4X the cost of “conventional” propane or
natural gas to install. Propane prices increase along the same factors as natural gas, but are generally more expensive than
natural gas and more volatile.
Another thing to keep in mind in some areas, most of our electricity is generated using natural gas, meaning electric rates will
continue to climb with natural gas rates... Eventually alternative systems like PV and the like will be cost-competitive. But the
market will decide...
by John in Erie, CO
I wonder, do they manufacture whole-house backup generators that can be powered by a geothermal system? I think most of
these are powered by natural gas/propane gas, right?
Geothermal needs large amounts of electricity to heat and cool by moving the hot or cold to/from the ground. Geothermal
systems (in the context of residential housing) do not produce electricity. You could buy a big propane/diesel generator to run
a geothermal system, but not the other way around. Geothermal is essentially like an air conditioner that you run year round.
On a normal air conditioner, you cool the inside and push the heat out to your air conditioner condenser in the yard where a
big fan blows on it. In geothermal cooling, you cool the inside and push the heat into the ground outside. For heating, the cycle
is reversed, akin to if you had moved the condenser into your house. Heating, you run the compressor in reverse, extracting
the heat from the ground and pushing it into the house.
Now, some interesting things about how this works. I’m going to describe the heating cycle here in more detail, but cooling is
similar, although reversed. The big thing about geothermal cooling is if you purchase a system with a desuperheater option,
in climates with a high cooling load, the heat you extract from inside your house can be used to pre-heat your domestic hot
water, and will usually do all the water heating during high cooling times.
(The system I describe here is a closed loop system – Open loops can work, but require an input well and a second well to
output water to, and can sometimes have problems with minerals, etc. gunking things up). Out here in the West, water is more
valuable than gold, so no such thing would ever be allowed. Your area may be different. The temperatures I use below will
be very different based on your climate, house, system, soils, and loopfield lengths. The numbers are just for illustration, but
probably pretty close to what I was expecting had I gone forward. Note also that these temperatures could change during the
course of the heating system, especially if the loopfield design was not done properly, as more heat could be extracted or
injected than the loopfield can handle, and things would start cooling down or heating up. Also, loopfield should never be near
any utilities (water, septic, leech fields, etc.) as they could freeze your utilities up during heating.
Now, in a typical geo heating loop, the heat transfer fluid, usually some kind of special low-temp non-toxic antifreeze would be
pumped into the loopfield from the geothermal unit. It might leave the house at 30 degrees (yes, below freezing) and then, after
traveling around the loopfield in the balmy 55 degree temperatures underground, come back at 52 degrees. The temperature
difference there (22 degrees) is run through a phase change in the geothermal unit compressor, and extracted to a higher
temperature potential, say, radiant heating water, where the input water from the radiant system is at 90 degrees, and exits the
geothermal unit at 120 degrees. Bigger systems have bigger flow rates and can do more heating, but because of the phase
changes properties, there are pretty significant upper limits that must be designed for when doing geothermal work.
So, keep in mind, that by installing a geothermal system, your gas bill could be zero, but your electricity bill will go up signifi-
cantly. If electricity is very expensive in your area, you should do an analysis to see if it will work for you. Most good geothermal
guys have software packages that will analyze your house, determine what geothermal unit you would need and how much
piping, etc. for your climate, and then give you a comparison and a time to return your investment when compared to say, 85%
gas furnaces and electric heat.

I found that the energy efficiency of my house increased the time to pay back the cost of the system from 8 years (conventional
framing/insulation/windows) to almost 18 years (ICF, spray-in EPS attic, radiant). With the expected lifetime of a geothermal
unit being long, it was probably still not a bad idea, but I could get much quicker ROI’s using other technologies, and keep my
propane as a backup.
Hope all this helps foster ideas. I think it’s a great technology, but still expensive. I found some dealers/installers sold this stuff
like it was space shuttle parts, and others that sold it like it was nuts and bolts at the hardware store. The quality of the instal-
lation is critical, but it’s not exactly rocket science. Doing geothermal, be sure you really do your research on your installer,
because every poor performing system (there are many described on the net) is due to bad installation/design.
by John in Erie, CO
John brings up a good point that is often overlooked. When we look at HVAC options, the first person we call is an HVAC tech
or an HVAC company. They analyze the situation, and if they are good present us with several options for what might be the
best system to meet our needs. However the only tool they have to offer are HVAC solutions, because that is either what they
know best or what they sell. There is an old adage that goes something like this, “when all you have is a hammer, everything
looks like a nail.”
Your house is a system. It is interconnected. No component of that system works independently without affecting other com-
ponents. Your windows, roof, framing, insulation, construction techniques all impact HVAC. The HVAC tech may tell you the
best HVAC components to meet your design criteria (“I want to maintain XX temperature during these conditions...”). However
your HVAC tech does not understand the entire system. It may be more cost-effective to downgrade your HVAC system and
use this money to upgrade your insulation or windows, change your construction techniques to a “tighter” construction, etc.
When I looked at my system as a whole, applying principles of engineering economy, I found that the most “cost-effective”
(combination of up-front capital costs, long-term maintenance costs, and long-term operating costs, the long-term costs all
brought back to current dollars using a reasonable rate of return) system was actually an 80% furnace with a 10 SEER A/C
unit – the least efficient unit on the market today. However I also have tight construction, ICF, R-50 in the roof, light gray well-
vented roof (as opposed to something dark like slate), constructed to Department of Energy recommendations for my climate.
My system is so efficient that upgrading my HVAC system to save money simply isn’t an option. That said, I put in a 90+%
furnace (my installer upgraded me for free since I direct-vented my hot water heater and he didn’t have to run the vent flue,
basically he gave me more equipment and less labor for a wash), and a 14 SEER A/C. I upgraded to a variable-speed, two-
stage furnace because I knew this would have comfort ramifications. However I also understand that the extra money I spent
basically is an upgrade only, and will never pay me back in long-term cost savings. In my climate, for my system, geothermal
was just money down the drain with no hope of recovery.
Ken, John, I’m curious how accurately you guys were able to predict your heating and cooling costs. I’ve used some freeware
utilities to estimate my heat loss and heat gain. Those figures came pretty close to the ballpark numbers I got from a reputable
geothermal supplier. However, I haven’t gotten a full Manual J calc done yet.
The house will be a combination of ICF and SIP. I expect it to be tight and efficient – with quality windows, radiant barrier on
the roof sheathing, radiant floor heating and significant thermal mass. On the other hand, the house is pretty large (5,500 sq ft)
and Baltimore has non-trivial heating and cooling needs. My estimates were 77,000 BTU heat loss and 53,000 BTU heat gain.
That didn’t include my basement or garage. My geothermal guy spec’d 108,000 BTU of heating and 51,000 BTU of cooling.
Our soil is good, but space for horizontal ground loops is a little tight. We don’t have access to natural gas, and we don’t want
a propane tank. So oil would be our fuel of choice. Like others here, I’m trying to decide if geothermal is a worthwhile invest-
ment.
1) What kind of heat loss/gain did you guys predict for your homes?
2) How did reality match up to your predictions?
3) What kind of peak heating and cooling bills are you seeing?
Thanks for your help. You two really contribute a lot of valuable information to this site!
by Jon in Ellicott City, MD

Chapter 13: Other Thoughts
13-1. Be on site.
By being on site, you can often discover cost-saving approaches that didn’t
occur to you in the planning phase. Opportunities for free items, cost engineering,
free or low-cost upgrades from subs, and special deals from salesmen often arise.
You answer questions for the subs to prevent delays and ensure that materials are
provided at prices you choose in a timely fashion. Disasters are averted and costs are
controlled.
13-2. Build in the off-season.
The law of supply and demand really does work, and most parts North
America have a low season when more tradesmen are available for immediate work
then at other times. Paradoxically, a sun city like Tucson, Arizona even has such a
time. In wintertime, they get an influx of framers and carpenters who can’t find work
in their own climates. Prices fall.
We recommend you take steps to allow you to break ground in the
. You can find good advice locally as to the steps you must take to separate yourself
from the bulk of projects that start in high season.
Lynn and Judy Coy told me: “Building a shop right now, and found material
is much cheaper in January, February than later on. Last year the OSB board went
over $10, but was $6.30 this past winter. It’s worth your time to plan and shop.”
Forum Post:
I have my house under construction. I’m using SIP’s. Even the local Habitat for Humanity uses
them because they go up so fast. They take a little crane time to do it. I’m using log supports in
place of deck supports. The crane guys are cheaper in January than they are in July on their
four-hour minimum.
by William in Redmond, OR
Forum Post:
I don’t know if this will help you much, but if you pull for your permits in Aug, you will be ready to go
in Oct, at least that is what we are doing. It seems like every year from Oct thru Jan the trades are
slow and most will take on side jobs or small jobs right now most are so busy I can’t even get my
hubby to do anything with all the hours and overtime he is putting in. My girlfriend is also an O-B
and is desperately looking for someone to do her foundation, she has been told by the subs in her
area that they are so busy they don’t have time for her and she is getting really stressed about this
as she just put her house up for sale and was hoping to get the foundation in quickly.
by Deby in AZ More than
400 additional
13-3. Build in a downturn. Construction
Bargain Strategies
are available
A different kind of opportunity arises when the economy is down. Not sea-
in our Bargain
sonality, but cyclicality of the economy is on your side. Materials and labor, even
Strategies book.
financing, is available usually at a savings that later translates into improved equity (See page 262.)
when the economy rebounds.

Project Notes

Chapter 10: How to Schedule the Work at
Sources Say
“The people you
pick to build your
a Savings house will deter-
mine the quality
of your home and
the cost of that
Time line: Two months before groundbreaking house. Finding
the right person at
the right price is
essential.”
Another Miracle Tool From Everything
You Need To
L
Know About Build-
ike a written budget, a written schedule has a magical effect on your outcome. ing the Custom
If you have a deadline, in writing, with written steps that lead up to it, you have Home
a very good chance of coming in on schedule. (See page 263)
Forums
Your schedule would be like a calendar with a start date and an end date. I was wondering
The steps for building your house would be indicated along with their durations and how long it is
taking people to
sequence. get their building
permits. I’m in
You need the help of a written schedule because the upcoming construction AZ and every-
one is telling me
phase of your project has a way of getting out of hand. One industry expert calls this 3-4 months. That
phase “Mr. Toad’s Wild Ride”. The construction phase tends to follow Murphy’s Law: sounds like a
“If anything can go wrong, it will. And at the worst possible moment.” A written really long time.
Amie in Phoenix,
schedule gives you a proven control device on the process. AZ

152 • Chapter 10: How to Schedule the Work at a Savings
Asking on the Only 22% of the owner-builders I interviewed eight years ago had a written
Internet won’t help schedule. Today two-thirds of the O-B’s in our survey report having a written sched-
much, since it is ule. Those who did it in writing or on computer completed their projects 13% faster
100% dependent
on the locality issu- than those who didn’t. People building new custom homes finished in a respectable
ing the permit and nine months. The National Association of Home Builders says that the average con-
how prepared you tractor-built house in the U.S. takes six months to complete. The same group says
are for meeting
the requirements of that owner-builders take an average of 9.5 months to complete.
your locality.
The NAHB congratulates themselves on a faster build rate than owner-build-
The county to
the south of me ers, but let’s take a closer look. The average size of home in their survey is 2,400 fin-
requires environ- ished square feet for a build rate of 400 feet per working month. The average custom
mental impact home in our O-B survey where the owner had a written schedule is 4,000 square feet,
statements, site
plan reviews, etc. and finished in eight months, for a build rate of 500 feet per working month, 25%
by the county faster than the professional builders.
commissioners
before they will
even start down I want you to have a written schedule and to take advantage of your planning
the permit pro- to make it an exceptionally good one. Unless you are building a “dream home”, your
cess. My county goal should be to finish in six months, the widely accepted middle of the road goal for
puts out a book
with all the draw- home building. Through good planning, this goal is more than possible. What slows
ings and paper- down a project is indecision on the part of the owner, tardiness on the part of subs,
work they want. and occasionally, bad weather.
My county
indicated that By being organized, you will not be indecisive. By virtue of your planning
they needed 1-4 you will be exceptionally prepared to run a smooth project and bring materials and
weeks to issue
a permit. This workers together smoothly. This is the management function of Integration. Remem-
depends on the ber POIMM in Chapter 4? By planning and organizing thoroughly, you are ready to
time of year and integrate smoothly. During construction, you will practice measuring and motivat-
permit load. Be
sure you have all ing.
ancillary paper-
work like percola- Try to get the weather on your side by starting the project in a favorable
tion test results,
well or water tap season of the year. Most owner-builders I talked to favored the spring. In our region,
paperwork, etc. I favor the fall (along with 15% of O-B’s in our survey). My reason is economy. There
is less construction work available in the winter, and more competition for the work,
My county issued
a footing/founda- hence lower prices. But in our area you need to start in the early fall to be closed in
tion permit in 2 before harsh weather hits.
days, and then
the full permit in 3
weeks. That let me
get going with my Picking the Right People is Half the Battle
excavation and
footings early with-
out waiting much I had always thought that picking subs was a price issue. After building a
on the county. house, I see that what other owner-builders tell me is true. It’s just as much an issue
It cost me $100
extra overall in the
of character and fit. The character part is that the sub you choose does what he says
project to get the he’ll do. The fit aspect is that you can work well with this sub, and he can work well
F&F issued. with others on your team.
John in Erie, CO
I know in Pinal Remember that the first qualification of a successful owner-builder is that
county 3 to 4
months is about the O-B can come to work each day prepared to fire his help, if needed. Prevent the
right. There is so need for firing people by making your expectations clear to the sub and seeing that
much building

Chapter 10: How to Schedule the Work at a Savings • 153
they are met. You will be able to work with some subs more easily than with others. going on, the
You alone can assess the chemistry, communications, or “fit” you have with the can- county can hardly
keep up with
didate subs. the permits. I am
thinking Maricopa
The process of assessing fit is to: 1) Interview subs in the early stages of plan- County would be
about the same
ning. Get a feel for the communication you have with each. Ask each whom they like right now. We
to work with in the related trades, and if there is anyone they are unwilling to work are going to start
our house this fall,
with. 2) Seek bids from candidate subs on your detailed specifications. Evaluate their 99% O-B as the
responses to the bidding process. Negotiate with preferred subs after receiving bids. family is in con-
struction. We just
Determine the ease of communication with the sub and the level of understanding of don’t want to be
your needs. 3) Check references. out there in 110
degrees on the
weekends while
Checking references is a lost art. Consumer Reports found in a study that only my hubby already
one percent of the public actually checked references when making a buying deci- works it during the
week.
sion. Here’s how you do it:
Where are you
1. Do it. planning to build?
We are going to
be outside of Flor-
2. Ask the sub for references of past customers in the bidding process. Call ence. We were
the references. Ask: able to purchase
10 acres a couple
• Did the sub show up and finish on time? of years ago for
$20,000 – and
• Did he do what he promised?
boy has property
• Did he do quality work? really taken off in
• Were there any surprises? price – we were
lucky.
Then ask if they know of other past customers. This is important because Good luck to you
Deby in AZ
the sub will have the normal human tendency to refer you to those who like
him a lot. Possibly the aunt or cousin he did some work for. You don’t want I don’t know
to hear “good things”, you want to find out how he will fit with you and if this will help
your team. you much, but if
you pull for your
permits in Aug,
3. Check the other past customers. you will be ready
to go in Oct, at
4. Look at projects physically that the sub has completed. least that is what
we are doing. It
5. Call the contractors’ licensing division of your state or province to see if seems like every
year from Oct
there are recorded complaints against your candidates. Check the Better thru Jan the trades
Business Bureau also for complaints. Usually there are some. You just want are slow, and
to avoid someone with an undue proportion of complaints, or unresolved most will take on
complaints. side jobs or small
jobs. Right now,
most are so busy
I can’t even get
my hubby to do
anything with all
the hours and
overtime he is
putting in. My girl-
friend is also an
O-B and is des-
perately looking
for someone to do
her foundation.

She has been told Computer Scheduling

by the subs in her
area that they are
so busy they don’t Your first step is to use the schedules provided by the generals who estimated
have time for her your project. These are valuable to you because they reflect the actual construction
and she is getting
really stressed
steps deemed necessary to build your plans. I told the generals who bid my project
about this as she that I wanted a written schedule with a six-month deadline. They responded with
just put her house very helpful information about the sequence and duration of each trade involved.
up for sale and
was hoping to get
the foundation in From the sample schedules and my interviews, I developed a calendar for
quickly. construction on the computer. I used a calendar creator program that laid out the
Deby in AZ
tasks on the pages of a calendar. Better still would be a project management program.
Deby, I’m building You can use such a program, or a spreadsheet, or even a word processor program. The
in north Phoenix, important elements are:
17th Ave. and
Happy Valley
(Maricopa • Is dynamically updatable;
County). We also • Includes the right tasks;
got a screaming • Is in about the right sequence (many jobs can and will overlap);
deal on our land • Shows correct durations for tasks;
about a year ago.
Prices have tripled • Provides some margin for error between steps.
I could not afford
to buy out there The overview schedule sample on page 156 was constructed using the rows
now. I feel very
lucky. What did and columns format of a computer spreadsheet. Once you line up your construction
your friends bids steps on the left, and the weeks across the top, you have a very usable format for your
for her founda- schedule. If you pencil in the durations of each task by shading or drawing X’s, or
tion come in at? I
can’t believe how type them into your computer version, you will have a clear picture of your schedule.
expensive con- The sample schedule provides average durations of typical steps as a comparison for
crete has gotten. you. Use the durations that bidders provide you to make your calendar accurate.
Amie in Phoenix,
AZ
LOL you are what

we call halfway
Live in Your Schedule for a While
to CA! We are
closer to Oro Lay out your own schedule carefully. Piece together the tasks, durations, and
Valley/Oracle lead times that have come from your bidders, from your telephone interviews and
than Florence.
from the general contractors who estimated your plans. The durations that bidders
My friend has provide you are particularly important. They are committing to you that their work
no bids, no one will be done in four days, or two weeks, or whatever. Enter these commitments accu-
will talk to her
right now. She is rately on your schedule.
estimating about
$6,000 but I Now walk through the schedule mentally. You will be the genius who will
think that is low
considering what manage this well-planned construction project. This particular bit of planning will
type of excavat- make a big difference to your success. As you think through each step with a pencil,
ing she has to do telephone, copies of bids you have received, your construction calendar and your
(she is on a very
rocky mountain- own day planner at hand, some important items will pop out for you. For instance,
type soil). And when you see that framing will start in the second or third week, you ask yourself
when I asked — when do I need to order the framing lumber?
her what she
planned to pay
for an excavation, You pick up the phone and call your lumberyard and ask how much lead
she hadn’t even time they need. Or, you call one of your framing bidders and ask how this is done.
thought about that.
Her foundation You discover that with your lumber estimate on file with the lumberyard, you can

call two days before. You make a note right on the framing lumber line of your cal- will be smaller
endar, or in your day planner. than ours; she is
doing a 28x36
foundation 2-story
So far so good. You remember that roof trusses are a part of your framing. home; that is what
You call one of the truss suppliers who bid your plans and ask what the lead times I believe she said.
are. You are told that it normally takes a month, but they are backed up and it might She wants to
build with just her
be six weeks. Congratulations! You have just dodged a bullet. Because you are still in family and friends
the planning stage, you will be able to place the order before you get in a bind. – they have no
construction back-
ground and is
You look on the bid documents for doors or windows and see that your pre- not willing to pay
ferred supplier has noted that you need to place the order three weeks before delivery. for much outside
Or, you notice the information is missing and you call. You find that three weeks are help. I think she
is headed for
needed, but to be safe they suggest six weeks. Once again, you found out soon enough trouble. I was a
to protect your future schedule. little worried when
she told me she
could just pull
Many first-time owner-builders, and even some veterans have found them- a septic permit
selves waiting for a crucial delivery while their unfinished project just sat. I know and that was
of a two-month stoppage caused by delays and misunderstandings on a truss order. also her building
permit; and she
Professional builders occasionally slip up as well, especially when dealing with an wouldn’t get or
unfamiliar supplier. need inspections.
She is in Yavapi
County, and when
I found that I could sometimes move heaven and earth to get an overlooked I looked at her
item delivered fast, but I wound up feeling that I paid too much or got a less than codes it said dif-
perfect choice because I didn’t have time to shop. The scheduling phase is the time ferently. She wants
to build everything
for you to avoid these disappointments. buying new and
including utilities
Once you have thought through your schedule, submit yourself to the disci- for $50,000. I
am figuring $50K
pline of having others review it. Many possible reviewers are available to you. I sug- just for the house
gest you think about the subs and suppliers who have just bid your project. You have with already
probably turned up some bright minds and helpful people in the process of bidding. owning most of
the tools/equip-
These people in the industry can tell in a flash if you are on the right track. ment (we have a
tractor), friends
Fax or email a copy of your work to your reviewers. Or you can phone and in the business,
and getting stuff
carry the documents to your people and talk the schedule through with them. There free or at builders’
is strength in multiple opinions. This is a good time to talk to people because you cost. Cheap is not
haven’t yet broken ground, and as they say, “nothing is set in concrete” yet. You may always better and
I tried to tell her
get new suggestions to save time or money, improve your design, or run a smoother that if she doesn’t
project. do her foundation
well she might as
well not build the
house. I think she
is talking to a lot
of non-construction
people who are
not giving her the
facts.
Our foundation
will be about
30x50, modest
single-story and I
am figuring about
the same price;

156 Chapter 10: How to Schedule the Work at a Savings
Sample Construction Work Schedule
Weeks from Start: 1 2 3 4 5 6 7 8 9

Site work and excavation 3 days
Temporary utilities 1 day
Foundation preparation 1 day
Underground plumbing 3 days
Foundation Inspection ✓
Foundation erection 5 days
Slab, basement and garage 2 days
Rough framing 2 weeks
Windows and exterior doors 2 days
Rough plumbing 7 days
Decking and sheathing 5 days
Rough electrical 7 days
Cornice trim 2 days
Roofing 4 days
Exterior paint 5 days
Rough HVAC 7 days
Four-way Inspection ✓
Insulation and Inspection 3 days ✓
Brick work or siding 2 weeks
Hrdwd. floor & underlayment 4 days
Interior wall finishing 12 days
Interior trim and doors 1 week
Cabinetry 3 days
Interior paint 13 days
Countertops 2 days
Vinyl and tile floors 3 days
Exterior flatwork 2 days
Plumbing trim 1 week
Heating trim 1 week
Electrical trim 1 week
Appliances 1 day
Carpeting 4 days
Clean-up 3 days
Landscaping 4 days
Final Inspection

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Schedule Worksheet

Site work and excavation (Duration:)
Temporary utilities
Foundation preparation
Underground plumbing
Foundation Inspection
Foundation erection
Slab, basement and garage
Rough framing
Windows and exterior doors
Rough plumbing
Decking and sheathing
Rough electrical
Cornice trim
Roofing
Exterior paint
Rough HVAC
Four-way Inspection
Insulation and Inspection
Brick work or siding
Hrdwd. floor & underlayment
Interior wall finishing
Interior trim and doors
Cabinetry
Interior paint
Countertops
Vinyl and tile floors
Exterior flatwork
Plumbing trim
Heating trim
Electrical trim
Appliances
Carpeting
Clean-up
Landscaping
Final Inspection

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Schedule Worksheet

Site work and excavation (Duration:)
Temporary utilities
Foundation preparation
Foundation Inspection
Foundation erection
Slab, basement and garage
Rough framing
Windows and exterior doors
Rough plumbing
Decking and sheathing
Rough electrical
Cornice trim
Roofing
Exterior paint
Rough HVAC
Four-way Inspection
Insulation and Inspection
Brick work or siding
Hrdwd. floor & underlayment
Interior wall finishing
Interior trim and doors
Cabinetry
Interior paint
Countertops
Vinyl and tile floors
Exterior flatwork
Plumbing trim
Heating trim
Electrical trim
Appliances
Carpeting
Clean-up
Landscaping
Final Inspection

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

but we have a Back-up Plans to Keep the Work Going

friend who owns
a union concrete
business and he An engineer I know says he is “a belt and suspenders kind of guy”. His pants
owes us some won’t fall down because if the belt fails, the suspenders go to work.
favors. We were
told cost for the
materials and pay Your scheduled plans will in some part go awry. That is Murphy’s Law. If
cash and food you anticipate that possibility, you can “go to Plan B” without a hitch. Your plan B is
(steak dinners) for
the labor and we
a back-up plan for all the things that can hurt you on your schedule. Of course, the
will get it a much biggest problem is subs that won’t show up.
lower cost. Now
my husband’s
brother said we
My footings contractor told me the week before construction that he had
need to estimate broken his back. He was convalescing, and his brother-in-law, an established foot-
about $15,000 to ings contractor, was covering his work. I called the brother-in-law, and learned that
$20,000 for the
foundation. But
he was scheduled out a month ahead. And he wanted about 50% more money than
he was building a the injured contractor had agreed to. It was a scramble to find an available sub and a
2,500 sf adobe decent price in time to preserve our schedule.
home and the
number was just
off the top of his What do you do in a case like this? You go to plan B — if you have a plan
head. He actually B. You do indeed have a plan B if you have gotten multiple bids for all of the trades.
makes his own
adobe bricks. But,
Even though you select one bidder to get the work, you should leave the door open for
I think he needed the other subs who bid. I suggest that you write each bidder a note expressing thanks
a better footing and saying that “perhaps we will do business again some day.” To those bidders who
with the weight of
the adobe. We
were close to being chosen, send an email or fax saying that they are your alternate
are doing metal or back-up choices for this work. If anything goes wrong with your first (or second)
stud framing which choice, you will contact them immediately and ask them to participate on your proj-
I don’t think needs
as much. My
ect.
dad did asphalt
and concrete To have this luxury, which almost guarantees your schedule, you must get
for a living, so
we will do all
multiple bids in the first place. Having made the effort to get several bids, you can
patios/driveways count on back-up. Having as many as ten bids on something is a great comfort,
and stuff ourselves though I erred on this when building our house. I had multiple bids in some catego-
with him. We also
already own a
ries, but not where people were going to “help me” or “do me a favor”. For instance,
mixer/water tank the construction advisor I used agreed to help me wire the house. I trusted this man
truck, forklift and implicitly, but my judgment was off. He never came as planned to show me how to
many other tools.
But I want the
wire the house. I had not budgeted for the category, and I felt very inadequate to
foundation hired start without help. I thought or hoped that he would yet show up. I spent some lonely
out to make sure weeks at the site waiting.
it’s a good one.
My hubby does Eventually Elaine and I checked out some books on wiring and read them.
metal stud framing We then jumped in to fill the void. It took a long time and plenty of paid advice, but
and drywall for a
living as did his
we ultimately did a superb job. However, our schedule was shot. I had to make many
dad. His dad also phone calls moving other subcontractors affected by the delay.
does plumbing;
his brother can
just about do it
We had an unbelievably hard time getting the unpaid helpers who agreed
all, uncle was a to work with us on painting, cabinetry, deck work, and stair rail work to show up. I
state inspector was disillusioned. I was new to this part of the country, where Elaine was raised. I
and we have lots
of construction
thought a person’s word was their bond. Elaine explained to me that the local culture
friends we have is that ‘Yes’ means ‘maybe’, and ‘maybe’ means ‘no’.
helped build for

The moral of the story is that you should be very sure before relying on vol- free over the years
unteer labor. And you should have a back-up plan. I should have bid the volunteer who have already
categories just as I did the paid categories. In the paid categories I did fairly well, but offered to help for
beer and food.
I found that almost no subs were precise about their show-up times. The nice thing is
these are the kind
While you are waiting for people to do what they said they would do, the of people that
really know what
interest clock is ticking. At the end of our project the interest was running $1,250 a they are doing
month, $65 a day, and $7.50 per working hour. You need to beat the big, bad interest and will bust butt
monster, and back-up plans will allow you to do that in style. to go in and get it
done versus sitting
around.
Schedule Reinforcement Program We are also

not building a
regular house
like most people,
1. Communicate in writing we are taking
a steel building
and making it
By following the planning steps in this book, you have had communication into a house. We
periodically with the subs who will do your work. Be thorough with this communi- will dress up the
cation. Send thank you notes to subs who interview with you — I faxed them a copy outside and stucco
it to look south-
of the interview with my thanks. Follow up with those who bid your project, thank- western. We have
ing them or letting them know you have received their bid. After you select your subs, been hoarding
thank the others who bid and let your alternates know that you have chosen them as materials from
some leftovers
back-ups. on demo’s and
new builds. We
have gotten things
2. Get written schedule commitment like real nice oak
French doors with
When you commit to a chosen sub, extract a return commitment of start all the hardware
from a remodel
date, duration and finish date, or at least two of the three. Include the time commit- for free, free new
ments on the sub’s estimate and you and the sub should both initial it. insulation, a stain-
less 3-area sink
that sells at Home
3. Distribute schedule Depot for $650
we paid $20.
Like new designer
When you have refined your written schedule, follow the advice found in the bathroom sinks
American Institute of Architects Project Checklist. Distribute the written schedule and cabinets
for free; and we
to each member of your team. If you have fax capability, you can do a mass faxing to know a tile guy
the group in a very short time. If not, email; or make photocopies of your schedule that saves his
and send it to the participants. leftover travertine
and marble high-
end fixtures for us,
so we are hoping
4. Call, call, call to come out at
about $28 a sf.
Veteran owner-builder Jim Stark provides the next bit of advice. But we either get
this stuff for trading
work/favors or
“The rule is to call the subs once a month to remind them of your schedule until told to throw it
the month before they are due. Then call them once a week to report progress and away after a job
is done. I couldn’t
verify that they are still on schedule to show up as planned. In the week before their believe when we
start time, call every other day to confirm and verify that you will have any needed got the brand new
materials on hand. The night before they are to start, call and confirm that they will “still in the wrap”
R-19 insulation
for free, because

they ordered too much and just told my hubby to throw it out. be there in the morning. Successful gen-
Well, we did, right into the back of our truck. There is a lot eral contractors follow this advice to the
of waste in commercial building and they don’t care because letter.”
they just pass the cost on to the consumer.
I attended the home show last weekend and found a place

that buys construction lots and sells them at a discount, I can’t 5. Strengthen relationship
wait to check them out.
To let the sub know that I care and
Our goal is to do this all mortgage-free, sure hope we can.
We just got our plans back and need to hook up with our have serious expectations, I made it a point to
foundation guy. So I don’t have a bid yet. visit them at their current job site before they
started my work. I did this both in the bidding
Be very careful with subs out here, I have seen many people
ripped off or poor work done. Check out their work before process to assess their workmanship, and later
you pay them. Also, don’t pay them in advance. Most times to strengthen communication. If the schedule
they want $$$ for materials – that is normal, or you get the changed at the last minute, I went to a lot of
materials they need and have it there for them.
effort to inform them so that they would not
If you get a good sub, be nice to them – by doing so you lose a day of work.
would be surprised on what some of them will just throw in
and do for free/inexpensive. Little things like just having a
cooler of water for them really help, especially in the summer In one case, I went to the excavator’s
or if you can bring coffee in the a.m. in the winter. When you home the night before a planned start to inform
want the work done don’t ask for a lot of changes; I know it him that the city had delayed our permit at
makes them nuts. Most can’t stand changes, and will charge
you plenty for it while they won’t say it to you. I know I hear it the last minute. From our meeting when he
all the time at home, especially from the tile guy. Depending inspected the lot and bid the job, I remembered
on when you start your project out here, keep in mind these that his five year old daughter had a birthday on
guys start early. Right now with summer getting ready to hit,
my hubby leaves for work at 2 am to start beating the heat. his planned start date. I apologized and brought
Most important, be safe. a gift for his daughter’s birthday. That excavator
Deby in AZ was very reliable for us over the course of his
Sources Say several contributions to our project. He always
“You can run the gauntlet of government percolation tests and informed us if he would be a few hours late,
planning boards and zoning and wetlands acts. Do this in for example. These are the kinds of things you
the fall. Perc and soil tests are often the bugaboo, because in
some towns they can be done only in certain seasons.” expect on both sides when you have a good rela-
From The Well-Built House tionship with team members.
Habitat for Humanity: How to Build a House lists 67 steps
with color illustrations in 14 sections to building a typical
house.
6. Bonus program
The Complete Idiot’s Guide to Building Your Own Home has Owner-builder Jay Sevison, who is a
10 illustrated chapters on the process of housebuilding from manager in a computer software company, used
site preparation to outdoor options.
(See page 263) a further technique to strengthen his schedule.
He offered $100 to each sub who started on the
An enhanced schedule worksheet template is designated day — he physically handed them a
available in our Free Download Gallery. A calendar
$100 bill. Later, if the work was as hoped and
creator program, for day by day project details, is
finished on time, he surprised some of his subs
available in User Tools.
with another cash bonus.
This, too, can work both ways. You can

negotiate “liquidated damages” with subs in
advance which specify that they will pay a pen-
alty — a reduction in your invoice — for each
day they miss the agreed deadline.

Chapter 11: How to Make Your Lender Swoon Forums
Hi, everyone. I’m
a mortgage broker
out of Washington
Time line: Two months before groundbreaking State and have
built three owner-
built homes in the
last four years,
Your Next Thousand Hour Payoff (on my fourth).
I was going to
offer some of my
B
y this time in your preparation, you have been rewarded for diligent planning experiences for
by saving money on house design, by finding good subs, and by pinning down those of you just
starting out.
some real construction bargains for your house. You are ready for your next
payoff — smooth sailing through the loan application process. #1 house 2,600
Sq. ft. built for
$283,000 sold
The myth that you can’t get a construction loan without a licensed general for $367,000 con-
contractor is widely circulated. You can indeed get the loan, but there are many ventional financing
people who will tell you that you can’t. 20% dn. stuff.
#2 house 2,770
Of the lenders I surveyed, 45% made owner-builder construction loans rou- Sq. ft. built for
tinely. 15% did so on a case by case basis. That’s more than half who will make these $297,000 sold for
$402,000 con-
loans. If your preparation is well-done, you will get a loan from any of the 60% who ventional financing
will consider it. You may come out so prepared that the 40% who don’t do it will 10% dn.
make an exception for you.
#3 house 3,500
Sq. ft. built for
$290,000

166 • Chapter 11: How to Make Your Lender Swoon
(screaming deal What the Lenders Want

on the land)
IndyMac 5% dn.,
(my brother lives The lenders want what you and I want. They want you to be prepared for a
in it) appraised at smooth and successful project. Several lenders used the same words with me in inter-
$470,000 at time
of loan funding
views: “They have to convince me they can do it.”
re-appraised 15
months later for Lenders are justifiably wary of the typical O-B candidate for a construction
$620,000. I have
a 5% interest-
loan. Construction lenders find O-B’s woefully unprepared on average to control a
only loan locked project and bring it in on budget or on schedule. The owner-builders I interviewed
for 5 years; the before the first edition of The Owner-Builder Book had averaged only 238 hours of
payment is only
$1,200 a month
preparation before breaking ground. The lenders know that over the course of con-
and the loan is struction these same candidates will spend much more time than that trying to make
assumable. (Indy- things right (original average: 1,068 hours during construction phase). After the third
Mac product).
edition of the book, owner-builders who participated in our online survey indicate
#4 current 688 hours of planning and only 492 hours during the construction phase. This is a
project, just broke much more livable ratio and a 54% reduction in construction effort required.
ground. 4,100
Sq. ft. budget
of $550,000 Since it’s the bank’s money, the lender can’t help but wonder why uninformed
appraised @ candidates won’t make the effort to reduce project risk before they take out the loan.
$845,000 on
21/2 acres in a
Most owner-builders leave too much to chance, and lenders know it. The lender
gated community. wants to see that this is a no-risk proposition. Which is exactly what you want.
I will be using
an Alt A neg.
Amortization loan
Remember, when you take out a construction loan, it’s not your money. The
@1.75% locked bank lets you use their money in return for your commitment to repay them (with
for two years to interest). They have to be sure you will repay, and in the event you don’t, they want
carry the house till
it sells. My pay-
the house you build to have plenty of equity so that they can resell it and recoup their
ment will be about investment.
$1,900 a month.
# 5 My own per-
When you meet with a lender, you should address their concerns decisively.
sonal residence to The leading concerns are:
be built with my
own cash!
Risk
The reason I
posted the above
was not to toot Prove that you have done the necessary planning to pull off a successful proj-
my own horn but ect. Document your financial soundness and financial qualifications. Show that you
reinforce the idea have secured the necessary insurance coverage to protect the lender from liability.
that it can be
done you simply
won’t believe how
many people told Quality
me you can’t do
that! including the Show that your house will meet any and all quality standards, resell easily,
7 banks I talked
to before I got my and be a good risk for their investment.
first loan.
Back to financing, Cost Control

I have heard a lot
about Bismarck on
this board – their Demonstrate that your house will be built for a competitive price, and that
product goes like you will stay reasonably within budget.
this: 70% loan to
cost, not future

Chapter 11: How to Make Your Lender Swoon • 167
Job Control value, cost to

build. That means
you would have to
Convince the banker that your house will be finished well within average come in with 30%
and reasonable time limits. down, not a lot
of leverage there;
not to mention the
points and high
Your Loan Proposal Book interest rate, NO
GOOD!
You can do all this with a loan proposal for the lender. By proposal, I mean If you live in WA,
a written book or portfolio that documents all of your answers to the lender’s con- OR, MT, or ID I
have an excellent
cerns. lender If you need
something outside
You should not go in empty-handed. One lender told me that a couple came of the box, I am
using them on my
in to see him and said they were sure they could owner-build at a savings because “all most current proj-
builders make 30% profit.” The lender asked them the penetrating question: “Have ect. The product
you built before?” “No.” “Have you remodeled a house?” “No.” “Do you maybe have goes like this: First
off they are no
relatives in the industry?” “No.” “Did you perhaps have a summer job at some point income verifica-
in construction?” “No. But we did read a book about owner-building and we know tion (No ratios) no
all about it.” The lender declined the loan. credit explanations
(they do look but
not a determin-
You wouldn’t dare tell a lender that he should make you a big construction ing factor). Loan
loan because you read a book, would you? Particularly our book, because you know approval in 24 hrs
(they did mine in
by now how to prepare and this is your moment to show off that preparation. You 6 hrs). Can fund
might say: “I have worked for six months planning this house and I have this pro- within 10 days,
posal to give you.” They are 70% ltv
based on future
value or 97% loan
Your proposal should knock the lender on his or her Fanny Mae. Here’s how to cost whichever
to put it together: is greater. (If you
can build in 30%
you would only
Before your meeting with the lender, stop into the bank and ask the secretary be required to
or loan officer for copies of all the forms you will need to fill out for the eventual belly up 3% dn)
They do charge
loan. Ask for a list of all the documents they will require in evaluating the loan. Ask 10% and 31/2
for a copy of their Lien Release for your records. Ask what insurance coverages they points which they
require of borrowers so you can line up the coverage. fund into the loan;
that is the tradeoff
for the ease of
Go home and assemble the documents required. The application they pro- financing. They
vide will undoubtedly ask for your employment and banking history, and your credit also fund in three
months worth of
references. You will need to bring in copies of your last few tax returns. These are payments, and
pretty standard requirements for loans. All applicants need to supply the same finan- there are no
cial paperwork. The difference in your case is that you will have prepared it thor- reserve require-
ments.
oughly in advance.
This loan is based
To the financial paperwork you will add the construction and management on your future
equity, not much
documents that you have been working on for months. Some of these are also stan- else. I started
dard, but you will provide some documents that the lender has never seen before. using them after
I added up how
much of my time
Make your proposal or portfolio neat and organized. If you are not skilled and MONEY
with paperwork, get help! There are many people who handle these types of docu- the banks were
ments for a living. Use a copy shop to reproduce original documents that you supply wasting going

through their loan process (or should I say (like subcontractor bids), and shrink or enlarge them to a con-
ringer). This product needs to be broker sistent size. If possible, make a notebook or have a printer do
represented. a spiral binding of your papers and put a professional looking
Good Luck To All !!!
Jl in Vancouver, WA cover on it.
Sources Say Not all lenders want the same documents. But, all the
“If you can demonstrate some knowledge of
how you’re going to go about building your suggestions below are pertinent and demonstrate your readi-
home, the lender might say: ‘Okay we’ll ness to bring your project in on time and on budget:
take the risk.’ The more knowledgeable you
are about homebuilding the more likely a
lender will be to loan you money.” Your plans and specs from the designer
From Everything You Need To Know About
Building the Custom Home
(See page 263) This is standard. Include engineering report and soil
conditions report if unusual conditions exist. Include any
Forums engineering for non-standard structural design.
WRITING A LOAN PROPOSAL
This can be a daunting task. Cara happens
to be a grant writer and consultant, so this Land purchase contract or warranty deed of
came naturally to her. However gathering
all the information is not so easy. Whenever ownership
you submit anything to a potential lender
make sure it will provide every piece of A standard requirement.
information they could ever inquire about.
Your proposal should be tailored specifically
for your project. You only get one chance to
make a good first impression.
Copies of bids from subs and suppliers
On “My Construction Website” we Having this is rare. This sets you apart and makes the
have uploaded the proposal that was used requested loan amount a realistic number.
to acquire our loan. It has been edited
because not all information should be made
public, but you should get the idea. Your room by room descriptions
NO MONEY = NO PROJECT
Jason in Orlando, FL
This will surprise your lender.
Journal
Loan: Our lender told Jason that our
proposal was the best he’d ever seen. If
The text of your interviews with subs and suppliers
he only knew... If you remember, we sent it
out the door sans letters of support, Gantt They’ve never seen this before. You have become a
chart, and statement of self-work. And we unique applicant. They will likely say in the loan committee
still blew him away. That feels really really
freaking good. The lender says that we are meeting: ‘This person has put a lot of thought into this.’
good to go pending our appraisal, which
should occur this week. The appraiser will
also pick up a copy of the plans. This is Evidence of the construction insurance the bank
the final puzzle piece we needed to make requires
the project work. Or the only puzzle piece,
depending on how you look at it.
Cara in Orlando, FL You can photocopy the one-page binder the insurance
company provides to show you have coverage. If you haven’t
Forums signed up yet, give the name of your chosen agent, and carrier,
I live in Comal County near San Antonio,
and I am owner-building as well. Texas and the quoted cost of the policy.
does not have “licensed” GC’s, so it is
not required for any kind of permitting. If
you are building in the hill country like I Include a copy of the bank’s lien release form
am outside of any major towns, you many
not need that many permits. For example,
Comal County is just outside of San Anto-

This is the paper that subs will sign, when they are paid, that says they have been paid and will not
put a lien on the house. You are showing the banker that you understand the process.
Cost breakdown
Put in the written budget you have developed for your project. Include a ten percent contingency
in the totals. Include any work you are doing yourself at market price. That way they know you can still get
the project finished if something happens to you.
Written schedule
They may have never seen one of these before from a candidate.
Qualifications Statement
Give the background on you and your spouse showing what related experiences to construction
you have had, even if it’s your management experience at work. Indicate how your employment situation
will allow you to spend at least two hours of daytime on-site supervision.
Résumé of construction advisor or superintendent
If you or your spouse can’t be on site for two to four hours a day, include the credentials of someone
you have arranged to provide this service.
Lenders Want to Put a Copy of the License in the File

Most of the lenders I interviewed said they wanted the candidate to have some construction experi-
ence. If you can’t prove this experience to the banker’s satisfaction, you may have to get creative.
I recently interviewed my own construction lender. He told me that his bank absolutely refused to
make construction loans to owner-builders. I said, “What about me?” He answered, “You had a contrac-
tor.” This amazed me. “He was an advisor — and you know he never did anything!” I said. “I know, but we
needed to put a copy of his license in the file,” was his response.
Evidently this satisfied the loan committee at the bank. When I was told that my qualifications
were insufficient, I found a semi-retired general contractor to help. He provided a photocopy of his license
for the file. The bank furnished me a perfunctory “construction agreement” which he signed, although no
money changed hands. This satisfied the bank.
It is not hard to set up an arrangement like this. Half of the general contractors I interviewed said
they had at some time provided a copy of their license to an owner-builder friend who needed to pass
muster with the bank, at no charge. You could call around and even offer a fee for this service. Try semi-
retired contractors. Meet with your candidate builder and show them your dream home notebook.
The bank’s agreement with my general contractor said that he would be paid a set amount per hour
for his services. My advisor agreed to $35 but said that I could help him out on his projects in trade. I never

nio, and I only had to spend any money on the arrangement, although it turned out to be a comfort
need floodplain and source of good connections and information.
and septic
permits; that is all.
Lenders like to see On the other hand, your bank may accept your qualifications as an owner-
a GC signed on builder without a license for the file. (Lenders accepted two-thirds of O-B’s in our
as a consultant, survey at face value.) You may have had experiences they will accept if written up in
and I know a few
people that simply an official-looking way in your loan proposal. Talking with lenders, I found that the
signed a support remodel I did on my last house could be acceptable experience, or the months I spent
contract with a helping a friend finish his house some years ago. I never thought about it, but my
GC to sign on
with the lender consulting assignments to commercial contractors would have been applicable, and
as an available most banks would have accepted the time I spent as a vice president of a construction
consultant. The company. They wouldn’t have to know it was marketing vice president.
contract only
stated that the GC
was available for You can acquire experience if needed. For instance, you could put in time
a fee to consult building a Habitat for Humanity house in your area. Document your experience for
on the project.
The GC never your Qualifications Statement. Get a letter from the supervisor or chapter director
got paid a dime describing your involvement. You’d be amazed what banks will accept if it’s in writ-
as no “consulting” ing.
was ever needed.
I looked at the
owner-builder Altogether, your loan proposal will overwhelm your construction lender.
network as well Your proposal itself is evidence of your qualifications to manage the project. By the
as other internet
owner-builder time you have spent a thousand hours planning and have documented it for the
lenders, and they banker, you are more than halfway home — no pun intended!
all look like a
scam to me. The
fees were way
too much. Also, I
have a friend that
Don’t Budget Self-Work
used the Owner-
Builder Network Suppose you have a construction budget of $290,000 including all of the bids
in Houston, and and bargains you’ve gathered, and including several things you intend to do yourself
she did not use a
single sub on their at low cost on the project. Further, say you have a borrowing limit of $300,000. You
list as they were feel you need to submit the budget as is so that you will qualify for the loan.
all priced too
high compared
to the subs that Don’t do it.
she found on her
own. I looked at If you flesh out your budget to include outside bid numbers for items you
her Owner-Builder
Network binder, will do yourself, it will be larger. For example, you may have painting in the budget
and it was worth- at $2,000 — the cost of materials, because you intend to do it yourself. But the bid
less. I could create prices you received vary from $8,000 to $12,000. Include the $8,000 in the budget
the same binder
in one hour using you submit.
Google for advice
and the Yellow This is a very important item with lenders, who all tell stories of people who
Pages for a few
phone numbers: I intended to do some of the work on their homes but didn’t. Many reasons exist for
would NOT sug- the failings, and you might get lucky and do all that you intend to do. But the banker
gest using them. doesn’t want to take that risk.
David in San
Antonio, TX
Never before have I had surgery, but two months before I had to start our
house, my orthopedic surgeon informed me that the pain I was feeling in my knee
was real and it had to be operated on. I was to report in for surgery in two days. I
thought maybe I would recover quickly and bounce back like an athlete does. Not

this time. I was in bed for a week and got around with crutches or with great caution Sources Say
for several months. “To present your
best case to the
lender know your
Things like this happen to owner-builders all the time. Sometimes things project. Never
come up at work that force a change of plans, sometimes they have health problems, say, ‘Well, I don’t
sometimes they go through marital difficulties, sometimes they are simply over- know.’”
From Everything
whelmed, and just can’t do what they thought they could. The lender wants to know You Need To
if the bank could take over the project in the event of disaster, and finish it for sale Know About Build-
without losing money. ing the Custom
Home
(See page 263)
If you have budgeted the work fully, there is no disaster. The project can
stand on its own feet. As long as there is enough equity to protect the lender, you will O-B Connections
Hi Brenda, I saw
be approved. the response of
the other poster
However, you may not qualify for the loan at the larger amount. Suppose today on the
forum and I think
your $290,000 budget becomes $325,000 with street prices for self-work and a ten they are right.
percent contingency. If you only qualify for $300,000, what to do? In our case, we Your plans should
didn’t see anything we could do, and we presented a skinny budget to the lender and explain all the
construction details
got away with it. But not for long, because although we did the work we intended, and as far as fin-
volunteer help and favors didn’t come through. We went over by about $25,000. ishes – well, that is
tricky. If you have
a good spread-
Before we could convert the construction loan to long-term financing, we sheet with all the
had to find a cosigner. It was an anxious time, because if we didn’t find one, we would quotes from subs
lose the house. We found a relative to sign the papers as a cosigner. We qualified and you should have a
good idea of your
the mortgage loan closed. Later, the relative agreed to quit-claim the deed on the finishes and what
house, surrendering any rights of ownership. they cost. I didn’t
really “water”
down the spec
If you confront the possibility of a shortfall in the beginning, and line up a list because I had
cosigner then, you are spared the grief. Your banker wants to see that you have quali- quotes to back up
fied for the larger amount. If you succeed in doing all the self-work you want, and if our finishes and
I wanted to get
all your bargains materialize, you will finish the project under your borrowing limit. enough money to
You can then take out your long-term mortgage without a cosigner. do those things. If
I had put lower-
end finishes I think
they would tell
Your Loan Presentation me my amount
would be high to
build that – so I
Most of the lenders I interviewed said that the candidate had to “convince” followed as close
or “sell” them on their ability to handle construction without a general contractor. as possible to it.
You are equipped with a written loan proposal loaded with information. What else I made my own
spec list but used
do you need to do? ontariocontrac-
tors.com
One O-B told me that he got his loan without a contractor by making “the list from their
mother of all presentations” to the lender. Give some thought how to present the site as a guide
in format and
information you have gathered in a cohesive way. You could “go Hollywood” and making sure it
make up overhead transparencies or PowerPoint slides to convey your main points was complete.
of preparation and qualification. Or you could simply mark places in your proposal But each bank is
different and they
with sticky notes and turn to those pages and describe them to the banker. should be able
to tell you what
they are looking

for. Also, in our price we included all labor, This may be a key to commanding the lender’s atten-
even the trades my husband plans to do, so tion in a tight market where O-B loans are generally not made
then the final loan will be lower but at least and there are few institutions to choose from.
we have a contingency. Good luck. What
bank are you going through? We went with
American West and they are great – they
service your loan too. Bye! Kari
Shop for the Right Terms
Hi Kari, thanks so much for your response
– that’s a good idea about using the sub With your proposal and presentation, you may find
bid labor as contingency money. I think we
will do that – my husband will be doing yourself uniquely well-received. My research with bankers tells
most of the labor, but that will give us a me that you will be the most prepared owner-builder the lender
nice financial padding as well. We are still has ever seen. This puts you in the driver’s seat.
getting our financing: we are looking at
Timberland and working with a broker. I will
check out American West.~Brenda Your lender will want to make the loan, and so will
other lenders in your area. Since you are no longer in a “hat in
Sources Say
“Lenders will probably require you to have
hand” position of subservience, you get to take your pick of the
cash equal to a down payment, but they available lenders. It’s no longer a case of “will they take me?”
probably won’t require you to use it if you but of “whom will I take?”
are successful in building equity as a gen-
eral contractor.”
From Build Your Dream Home for Less Consider the terms and conditions of the construction
(See page 263) loans available before you choose. Lay out a spreadsheet of the
loan differences discussed below and others you are concerned
Sources Say
Everything You Need To Know About Build- about. Before you see the lenders, call and ask their policy on
ing the Custom Home has a good chapter the key terms. After you present your case to a lender, talk
on getting a loan, coauthored by an through their terms using your checklist. If you are considered
attorney.
(See page 263) a good candidate, the lender will negotiate any or all of the
terms.
Sources Say
The Complete Idiot’s Guide to Building Your
Own Home • Origination Fee
has a section called “Understanding Lend-
ers” and a section on preparing a net worth
statement, loan evaluation factors, and what This fee can vary from zero percent of the loan amount
you can negotiate with your lender. to as much as three percent.
(See page 263)
Forums • Loan Rate

I’ve uploaded our budget for the lender. It is
Excel – hopefully you can open it.
The interest rate could be fixed or adjustable, and
When we requested the loan, we asked for pegged at some percentage over prime. Adjustable rates are less
$262,000. Midcountry Bank was leery to risky for the lender and more risky for you.
loan us that LITTLE of an amount and asked
IHE (IHEonline.com) to write our loan
amount for $302,500 as you can see in the • Down Payment Required
sworn lender statement.
So the IHE rep called to ask where we Is the land you have secured enough of a down pay-
wanted the extra money put. I told her I ment? Do you have to have the land fully paid for? Is additional
didn’t care since we had no plans on using cash required, and how much?
it. Since then I have learned about front-
loading a loan. In hindsight, I would have
done that with the extra money.
Lori in Sparks, NV
• All-in-one Loan
Some enlightened construction lenders are offering

combination loans that you close on only once. When you

finish construction, the long-term mortgage automatically kicks in and pays off the Sources Say
construction loan. These loans save on origination and some other fees. Your New House
Lists eight ques-
tions to ask
• Interest Rate Locks when getting a
mortgage loan
and four potential
If you catch the market at a good time, interest rates may be temporarily low. problems with
Rate differences can mean thousands or tens of thousands of dollars on your inter- mortgage loans.
est costs on the long-term mortgage. You may be able to lock in a low future rate by (See page 263)
paying a small fee. What rate can you get and what will it cost? Sources Say
The Complete
Idiot’s Guide to
• Title Insurance and Other Fees Building Your
Own Home
includes a typical
What will be the other charges on your closing statement? What will be the five-stage construc-
cost of title insurance (a big ticket item)? What other fees will you see? tion loan draw
schedule. First
draw: “Twenty
• Draw Procedures percent when foot-
ings, foundation,
first-floor joists,
Construction lenders can make your life miserable with restrictive draw pro- and subfloor (or
cedures. What does it take to get money to pay the bills? Does the lender require any slab and pumb-
home office or out of town approvals before disbursing funds? Are there completion ing rough-ins) are
completed.”
percentage inspections required? How often can you get a draw? How much advance (See page 263)
notice do they require? Is there a fee? Is the money paid directly to subs and suppliers,
or to you? Who handles check writing and lien releases? Readers Say
“Banks think that
owners are total
• Uninstalled Item Draws dummies. They are
used to working
with developers
Kitchen cabinets are often ordered weeks or months before installation, and who have a nice
a 50% deposit may be required. Can the bank deal with this, or will they be difficult little pat package.
with you about the fact that you make the deposit before the cabinets are installed? When you walk in
with something to
To get bargains on some other items such as ceramic tile, you may have to pay cash present, they don’t
for supplies before they are installed. know how to deal
with you.”
Jean & Bill H.
• Cost for Inspections Lansdale, PA
“Don’t be con-
Lenders want to have the project inspected periodically to see that the work cerned about get-
they pay for has been done. Some lenders insist on an inspection before every draw, ting a construction
and make you pay for the inspections. Most lenders have a program of periodic loan. I’ve been
a banker for 20
inspections. Some lenders charge nothing for inspections; many, however, do. years. Community
banks like the one
I work for want
• Title Update Fees to loan money to
anybody who will
take it.”
Some banks take a legal precaution of updating your title periodically. This Bob O.
limits the conditions under which subs and suppliers can file a lien and verifies that Santa Fe, NM
no creditor has any claim on your property. Do you pay for the procedure?
“I’m going through
my credit union
for the permanent
financing, and a

bank did my construction loan. • Category Shifting

My long-term relationship with
my financial institutions helped
a lot.” If you save money on one area of the project, for example exca-
Ivealia D. vating, can you apply the extra to another area, such as kitchen cabinets?
Tulsa, OK How user-friendly is the procedure?
“I was surprised how easy it
was for me to get a contractors • Insurance Cost
license for myself. It took $400
for the class and one day of
time.” The lenders have arrangements with various insurers that could
Joan L. save you money on course of construction insurance.
West Mountain, UT
“I put my loan out on the Internet

and asked lenders to bid on
• Time Limit
it. Construction to perm. The
first company came back with With most construction loans, you get a loan on which you make
$6,900 then one at $5,200, no payments. A construction loan accrues interest as time goes by, and
and then the third one at $800
plus interest during the term.” that interest is usually paid off by the long-term mortgage on completion.
Aaron & Daylene S. How much time will they give you before the loan is over and you must
Heber City, UT make interest payments? Six months is common, but very optimistic since
“We used a portfolio for the the average owner-built house takes longer to build. Many banks give nine
bank like you suggested with months on a custom home.
all the info, which causes us to
get a higher appraisal. It will
go through every room, and all • Cost of Extension
the materials. This will go to the
appraiser with samples. Like we
have a bamboo floor, and a If you go over, is there a fee for extra time before you have to make
sample for him to touch. monthly payments? What will the interest rate be?
Also samples of the Rastra
foundation material and pictures
of similar applications.” • Additional Amounts
John & Cyndee M.
Bend, OR
If you need more money to finish your project than anticipated,
“Every bank I called wanted and you qualify for it, can you get it? Do you have new origination or other
to loan us money. After many fees to pay? Is there a change in interest rate?
calls to lending institutions in
the area, I finally found three
willing to loan 100% with us as
the general contractors. The first
• Disputes
one wanted 15% interest!!!! The
other two were at current prime. What recourse do you have if there is a disagreement? Our loan
Just keep calling around. Also,
keep a record of the calls and
was tied up for a month late in the project because the bank insisted that
who you spoke with and the we had spent 92% of the funds but that the project was only 87% com-
terms. I keep this in a file on the plete. We had subs that wouldn’t do more work until paid, but the bank
computer.”
Jodenia & Jim M.
wouldn’t advance a nickel. It turned out that their computer spreadsheet
Blacksburg, SC had a totaling error and they were off by six percent. We had no way of
getting their attention in the meantime.
“We got our construction loan
through our credit union. No
problems.” Review the items that concern you before you make a presentation
Vern & Catherine P. to a candidate lender. Negotiate for the terms you want. With competitive
Willard, UT
information from other institutions, you have even more leverage. If you
“I used a short-term loan for con- are not satisfied, reserve your final decision until later. See other candidate
struction and saved $5,000.” lenders, make your case and negotiate. Don’t sign on the dotted line until
Lynn H.
Tremonton, UT
you have found a package that suits you.

Sources Say
Chapter 12: Paperwork Before You Begin “Don’t count on
getting anything
you don’t ask for
in writing. Remem-
Time line: One month before groundbreaking ber, ‘Not written,
not said.’”
From The Com-
plete Guide to
Anatomy of a Lawsuit Contracting Your
Home
W
(See page 263)
e made the mistake of not having backup plans for those budget catego-
ries where volunteers were to help on our project. One of the volunteers, Sources Say
someone to whom we had loaned money, never showed up to do the finish “If you allow con-
carpentry he promised. Since our project was already delayed, I moved hastily to find tractors to insert
an “or equal”
a replacement carpenter. clause in their bid,
you are at their
I hired someone I knew who was retired and seemed grateful for the work. mercy.”
From Build Your
He said he could finish the task with a helper in a week and a half. I agreed to pay him Dream Home for
the hourly wage he asked for, with the proviso that payments would not exceed eight Less
(See page 263)
days for two men or 128 hours of work time. Since I knew the man slightly, I only
made notes in my day book. We didn’t sign anything. Then our nightmare began.
For one reason and another, the men kept telling me that it would take longer
than expected to finish the work. At the same time they came to me every Friday and
asked for advances on their pay, saying they would not be able to stay in their apart-
ments or have transportation if they didn’t have some money. The task dragged on,

176 • Chapter 12: Paperwork Before You Begin
Forums and I eventually wrote out personal checks totaling 140% of the agreed amount, with
We’re having only 65% of the work completed. Finally, on the advice of an independent inspector
a lot of trouble friend, I refused to pay any more. They left with curses and threatenings.
finding an insur-
ance company,
and I’m guessing In a few weeks I got a notice that our place had been liened. We were almost
other Florida finished with construction, so I called the mortgage lender and asked if this would
OBs (particularly
non-GCs who are affect anything. I was informed that an amount equal to two times the amount of the
using a bank loan lien would be escrowed at the mortgage closing. We felt we owed the men nothing,
to finance) are but we would still have to escrow $6,500 at closing. I protested that under state law
having the same
trouble. Please these men weren’t qualified to file a lien as unlicensed contractors. I was told that it’s
post the following: a case where the owner is assumed to be “guilty until proven innocent.”
1. What types of
policies you had
to carry Later we got registered letters from the carpenters’ attorney stating that we
2. What company were liable for Breach of Contract, Unjust Enrichment, Failure to pay a Mechanic’s
you used Lien, and violations of the State Bonding Statute. Much to our chagrin, the relative
3. Whether you
are a GC who had cosigned on our mortgage loan was named in the action. There was nothing
4. Other informa- to do but hire an attorney and respond to the motions that had been filed with the
tion/advice/etc. Court.
Thanks in advance
– hopefully this
will help us and We were informed that these claims were standard in attempts by tradesmen
others find repu- (mechanics) to enforce a lien they file. We traded volleys with the other side, each
table insurance
companies. time showing that the claims were groundless. But the other side wouldn’t go away.
Cara in Orlando, They responded with a willingness to consider our “offer to settle”.
FL
Ugh! Yes this During the months of this turmoil we felt unsafe in our own house. There
was tricky for us. was anxiety and insecurity prompted by unfamiliar and uncomfortable legal pro-
We secured our ceedings. The matter never came to trial. We eventually cleared the lien, but the
policy before all
those hurricanes, damage was done; we suffered just because it was filed.
and unfortunately
we had a claim! You, too, can have an unwanted experience with the courts. More than a
Theft...lots of
power tools and 20% of the owner-builders in our survey stated that they had been liened at least
fortunately just one once. Ironically, their average estimate was that less than 10% of all owner-builders
appliance. wind up getting liened. It’s a case of “Although I got liened, I’m probably an excep-
1. Builders Risk
policy tion.”
2. Allstate
3. Not a GC What is a lien? It’s a claim filed against your property for alleged non-payment
4. I understand
that Florida Farm for materials or services. In our state a mechanic (tradesman) can file a Mechanic’s
Bureau writes Lien without paying a fee, or even showing identification. A second type of lien is a
Builder’s Risk “Materialmen’s Lien” which a supplier can file against your property, even if you are
policy or try Zurich
North America only late in paying his bill.
zurichna.com
Good luck! These liens have priority even against permanent financing, so the bank will
Kristy in Saint ask you to pay the mechanic or materialman before you get your long-term mort-
Lucie, FL
gage. If you are unwilling to pay off the lien, you will be required to set aside money
to pay for the lien later in the event you lose your case. The bank may escrow two or
more times the amount of the lien, so that legal expenses are also covered.
You can be subject to a Materialmen’s Lien if a tradesman procures material

for your project from a supplier and fails to pay the bill subsequently. You are liable,

Chapter 12: Paperwork Before You Begin • 177
and the supplier will lien you. This is one big argument in favor of your buying mate- Sources Say
rials separate from labor when you build. In addition, even if you pay your mechanics “Look for any
and materialmen fully, you can still be liened. In our state, no proof of non-payment situation that can
void workmen’s
is required at the time of lien filing. It can be done to harass or intimidate you. compensation
coverage. For
The magical key to preventing this misery is a “lien waiver”. (See sample on example, in some
states, drywall
next page.) Every time you make a payment to a supplier or a tradesman, you can subs experiencing
require that they sign a lien waiver which deprives them of any right to legally file a accidents while
lien for non-payment. Many lenders incorporate the language of the lien waiver on using drywall stilts
are not covered.”
the back of their checks. When a sub or supplier endorses a payment from that lender, From The Com-
they also relinquish any right to file a lien. plete Guide to
Contracting Your
Home
(See page 263)
Get Good Protection
Sources Say
Everything You
Most of the time nothing goes wrong, no one is injured, and you are not sued. Need To Know
But when you are sued, someone is injured, or you become the target of the unscru- About Building
the Custom Home,
pulous, the loss can be very great. Although infrequent, these situations can be costly, written by an
and you can lose your house or your future income if you are unprotected. attorney, includes
a sample contract
with subs and a
You may not be aware of insurance requirements, and you may unwittingly land purchase
hire an uninsured roofer, and he falls from the roof, and becomes permanently dis- contract.
abled, or worse. You have a builder’s risk policy and you think you’re covered. But it (See page 263)
doesn’t cover subcontractor personnel. A subcontractor is supposed to have a Work- Sources Say
men’s Compensation policy for situations like that. Needless to say, if the sub doesn’t “Most states have
have coverage, you become liable. special statutes
that require build-
ers, even when
Before you engage subcontractors, you need to talk with your attorney, your using subcontrac-
lender, your insurance agent, and your state or province offices of lien recovery and tors, to have
worker’s compen-
Workmen’s Compensation. Find out if any of the following requirements from sation insurance
around the U.S. apply to you: protection for
anyone working
on the building
Payment Protection site. Since you
are providing
insurance to cover
1. Lien Waiver Forms these workers on
your site, make
sure to deduct
Some states have a blanket lien waiver arrangement where once the necessary the amount of the
document is signed by all parties, the mechanics and materialmen can’t lien you. In insurance from the
most states, you must get a lien waiver signed by the sub or supplier upon receipt price paid to the
subcontractor.”
of payment to be protected against liens. To be extra careful, you can have every From The Com-
employee of the subcontractor who works on your site sign a lien waiver before you plete Guide to
make payment to the sub. Contracting Your
Home
(See page 263)
2. 1099 Filings
Currently in the U.S., if your subcontractors are not incorporated with a

federal tax ID number, you must file a Form 1099 with the IRS for all payments you
make to that subcontractor if he receives more than $600 for the work. You must pro-

Lien Waiver
Customer Name: _______________________________________________________________________
Customer Address: _____________________________________________________________________
Customer City/State/Zip: ________________________________________________________________
Customer Phone Number: _(_____)_________________________Fax: _(_____)_____________________
Job Location: _________________________________________________________________________

Type of Work: ________________________________________________________________________
Contractor/Subcontractor/Materialman: ___________________________________________________
Contractor/Subcontractor/Materialman address: _____________________________________________
Description of work completed to date:
Total Payments received to date and/or Payment received on this date:
$__________________________________
The contractor/subcontractor signing below acknowledges receipt of all payments stated above. These
payments are in compliance with the written contact between the parties above. The contractor/
subcontractor signing below hereby states payment for all work done to this date has been paid in full.
The contractor/subcontractor/materialman signing below releases and relinquishes any and all rights
available to place a mechanic’s or materialman’s lien against the subject property for the above described
work. All parties agree that all work performed to date have been paid for in full and in compliance with
their written contract.
The undersigned contractor/subcontractor releases the general contractor/customer from any liability
for non-payment of material or services extended through this date. The undersigned contractor/
subcontractor has read this entire agreement and understands the agreement.
__________________________________ _________________________________
Contractor/Subcontractor Signature Date

vide the subcontractor with a copy of the 1099 form as well. If your construction The Lien waiver
lender is making the disbursements on your project, the lender must file the 1099 and the Contractor
forms. Agreement forms
shown in this chapter
are also available as
Insurance Protection templates in our
Free Download Gallery
1. Builder’s Risk Insurance Sources Say
“Put payment amount
This coverage, also called “Course of Construction” insurance, is almost and payment schedule
in writing and have it
universally required by lenders. Be aware, however, that a policy might not cover signed by both par-
everything. For example, one O-B told me that he filed a claim with his insurer ties.”
over some stolen lumber, and discovered that unless the lumber was under lock From The Complete
Guide to Contracting
and key, it was not covered if stolen. Your Home
(See page 263)
2. Liability Insurance Sources Say
Habitat for Humanity:
You probably have some liability coverage under your current homeown- How to Build a House
lists and illustrates the
er’s or renter’s policy. For a small sum, you can increase the coverage to $1,000,000 house plan sections
or more for the duration of your project. Ask your agent. you must submit to get
a building permit in
most jurisdictions
3. Workmen’s Compensation Policy (See page 263)
Forums
This coverage is issued by individual states or private insurers throughout Hi all, we’ve just sold
the U.S. It provides for replacement income for a worker who becomes disabled our McMansion in
due to injury. You need to verify that your subs have this coverage. You can ask for Denver and are moving
back to California
a certificate of insurance proving that they do. But even that sometimes backfires. where I plan to do
One owner-builder became liable for a claim with a sub who had shown him the an O-B house in the
certificate. It was expired, and the O-B didn’t look closely enough to notice. You Atascadero, CA area
(“Central Coast”). I’ve
may be required to carry coverage for your own work on the project and for any been planning this for
other uncovered workers (like day laborers) who participate. years and was a little
taken aback at this
notice that I found on
4. Payment Bond the CA site for contrac-
tors:
Your lender may require you to purchase a payment bond from your Owner-Builders.pdf
insurer that provides payment to suppliers in the event that your subcontractor What are your thoughts
should default or disappear during your project, leaving unpaid supplier bills. on the liabilities they
mention here? Is this
These bonds are expensive, and pretty rare for residential construction, but some minimized if all your
lenders have told me that they require them. subcontractors are
licensed? I can’t tell if
they’re simply talking
5. Disability Insurance about hiring unlicensed
subs. I have no prob-
lem taking responsibility
If you become injured on your construction site and are forced to miss for the overall project
work, you can receive compensation through disability insurance. Many people (that’s why I insist on
have disability insurance as part of their employment benefits, but typically their doing it!) but the injury
thing is what’s getting
coverage is for Long-Term Disability, not short-term. Check with your employer. me. Thanks.
Mark in CO

You can purchase disability insurance from your insurance agent to replace your salary in the event of a
disabling injury for a surprisingly small amount of money.
6. Term Life Policy
Some lenders want the additional protection, (it’s not very expensive), of having a policy on your
life and that of your spouse, with the bank as the beneficiary. Should you die during the course of construc-
tion, the bank would have to replace you with paid help to finish the project and recover their investment.
At the same time you may want a private life insurance policy that would permit your survivors to complete
the house, and possibly to own it free and clear.
Write Good Contracts

One very tough construction lender I met has made 75 construction loans to owner-builders over
the years. They all had ten percent contingency reserves in their cost breakdowns. This lender made a bet
with each of his borrowers that they would use the entire contingency before they finished. If not, he would
buy them a steak dinner. He has only had to buy one steak dinner, and I interviewed the lucky winner,
Mark Benson, a professional purchasing agent.
Mark had a simple phrase that he wrote into each subcontractor agreement he signed. Here is his
explanation:
“Get a signed contract on the dollar amount for labor, and for materials if you go that way. Have a
clause: ‘Will not exceed the quoted price’. I don’t sign their proposal until I write it on there. We both initial
and sign. I try to have the owner or principal of the subcontracting company sign it.”
The second biggest regret (after insufficient planning) of O-B’s I interviewed is that they didn’t
get more things in writing. Make sure that you have written agreements with your subs. These protect you
against disasters, and they give you a very potent means of controlling the outcomes on your project.
There are some items that should be included in any construction contract to make project super-
vision easier. Examples are:
• Deadlines for completion — with possible penalties (liquidated damages) for delays.
• Start dates and possible reward for timely commencement.
• Detailed descriptions of tasks and level of performance expected.
• “Cost not to exceed $_____” with initials of both parties.
• Insurance the subcontractor must maintain.
• The subcontractor’s license number.
• Responsibility for cleanup on the site.
The very useful book Everything You Need to Know About Building the Custom Home, coauthored
by attorney John Folds, (see page 263 in the Resource Guide at the back of this book), explains six elements
that are recommended for a good subcontractor agreement.
Owner-builder Jim Stark, who is a professional engineer and has built four times, stresses the value
of describing performance in detail:

“Be clear about what you expect and hold them accountable for it. You are writing the check, you’re
in power. You can get rid of a tradesman after he starts. You have sequential payments in the agreement
— performance, then payment. You can write him a check and he is done if you are not satisfied.”
Most of the process of contracting with subcontractors revolves around fixed-price bidding. You
can sometimes save money by paying your subs not by the bid, but by the hour, on a cost-plus or time and
materials basis. Owner-builder Alex Acree, himself a commercial construction and maintenance supervi-
sor, used this technique effectively:
“I had a painter who charged $15 an hour, and did the exterior of the house in a week. I had carpen-
ters where the lead guy was very trustworthy. He had a super work ethic. I did some cost-plus contracting
with him. I would monitor it on a daily basis, and if I thought it would take a lot more than he thought, I
would limit it. Like crown molding. I let him do two rooms, and I saw it only took one day, so I said, ‘do
the whole house.’ Keep scope in small manageable pieces when you do a cost-plus. He first quoted me
$5,000. But I only let him do it in small chunks on an hourly basis, and it wound up being $2,500. He was
unique, though. In areas where I have no experience, like plumbing, I always took a fixed-price bid.”
In my own case, I naively accepted a time and materials arrangement with our plumber. I told him
I was concerned about the bill getting too high, and he hooked me by looking concerned and saying to me
with sincerity, “I’ll just bill you for time and materials.” He wound up charging me lots of money, and at
least in one case reworking one of his own mistakes at my expense.
When you act as owner-builder, you are a “contractor”, responsible for contracting with others to
complete your project. Because of the liabilities and the need to control your project, this part of your work
requires your serious attention.
City Permits
Provide enough time before your intended groundbreaking to procure all the necessary permits
and authorizations from your city. I thought a week would be plenty, but it took about six weeks to get
everything through the system in our case.
You will be paying thousands of dollars to meet all of the city’s requirements. There are fees for
connection to sewer, water, and power. There is a plan review fee in most jurisdictions, state or county fees,
impact fees, and of course, the cost of a building permit. In our municipality there is a refundable deposit
to pay for any sidewalk that you crack or break during construction. Our tab was around $5,000 for per-
mits and fees. In some communities impact fees alone easily exceed $20,000.
If your construction plans include anything that requires a zoning variance from your city’s Plan-
ning Commission, you may have to wait months to get on a meeting agenda, plead your case, and follow up
before you can begin construction. Plan ahead, and maintain communication with the inspector who will
be handling your project.

Contracting Agreement
__________________, referred to as OWNER, and _______________, referred to as CONTRACTOR, agree as follows:
CONTRACTOR shall perform the following services for OWNER: ___________________________________________

__________________________________________________________________________________________
__________________________________________________________________________________________
Schedule Start Date: __________________ Completion Date: __________________
Not to exceed the following price: $ ___________. Owner Initials:_____________ Contractor Initials:_____________
Contractor shall be responsible for the following in addition to the workmanlike performance of the work stated above:
The materials and construction supplied by the CONTRACTOR shall meet the specifications as described on the approved
blueprints and shall meet code.
The CONTRACTOR shall provide the following types of insurance matching or exceeding the amounts specified:
1. Worker’s Compensation Insurance in the minimum amount of $__________________.
2. General Liability Insurance in the minimum amount of $__________________.
3. ____________________________________________________________.
The stipulated contract price shall be paid as follows: __________________________________________________

_____________________________________________________________________________________
____________________________________________________________________________
The CONTRACTOR shall daily remove all trash and debris from the premises.
Any disputes arising out of or related to this agreement shall be arbitrated under the rules of the American Arbitration Association
before a single arbiter.
This agreement may be terminated by OWNER upon substantial abandonment of the project, defines as at least __________
business days without substantial activity, except for delays caused by:
a. bona fine weather disturbances;

b. strikes;
c. shortages of material;
d. material delays not caused by the general contractor;
e. governmental delays except those caused by the fault of the contractor.
f. persistent failure of workmanship to meet high quality standards for which adequate assurance of correction is
not provided.
In any disputes related to this agreement, the adjudication body may assess reasonable counsel fees to the prevailing party.
This is the entire agreement between the parties and this agreement may only be altered in writing.
Dated: ____________
Owner: ___________________________ Contractor: ___________________________

Mark, it sounds like the contractors are getting a bit scared. As you can see, it is written by a “pro contractor” source, i.e.:
the CA State Contractor Board. Seems to me they may be losing funds by not licensing contractors. First, unless you are
employing actual employees, then you do not need to provide Workers Comp. Don’t misunderstand, the subcontractors
on your site need to have it on them and their employees, but that is where the liability for that stops. You do need to
check and make sure they are current on their workmen’s comp and insurance, license and bonding, but all of this can be
done easily. Up here in WA state you can do it online, on any contractor in a matter of seconds. You also should carry a
course of construction insurance policy on your project, as well as homeowners coverage.
Don’t let anyone tell you that you can’t do this on your own. If you can set up a schedule, a budget and line up a sub for
each trade, you can do this. The money you will save just by doing those 3 things, and following up on each of those
things daily will be incredible. I will give you an example. We were going to build a 2,200 sq ft home and had a con-
tractor bid it all out last Aug. He bid it out doing it all for $270K. We decided not to go that route and also changed our
plans and went with a much higher-end home of 2,900 sq ft. I have finished all of my bids and am starting in 3 weeks.
All of my bids total $240K, and that is with a safe amount of padding involved. Short story, I am saving $70-90K by just
getting rid of the general, and lining everything up myself. I don’t have to lift a hammer. It’s a no-brainer.
Contractors will tell you that you will run into all sorts of problems and issues. I have found just the opposite to be true.
Everyone I have dealt with has been great. From the county, to all my subs. Sure there will be problems, but if you do
your homework beforehand, you’ll know how to deal with them when they arise. Once again, YOU CAN DO IT! One
more thing. Think of it like this...You have a leak and hire a plumber to fix it. Are you worried about liability? Same goes
for installing a new electrical outlet and so on.............
Bruce in Union, WA
Sources Say
The Complete Idiot’s Guide to Building Your Own Home has a section on “Getting Adequate Insurance Coverage”, and
lists eight components usually required by building departments to issue a permit, and nine special circumstances requiring
unusual documentation.
(See page 263)
Forums
We interviewed a framer for our new house last week. He seemed to be very honest and forthcoming in answering all of
the questions we asked. He mentioned that at times his wife comes out to the job sites to bring him and his brother lunch
and oftentimes brings the kids. He also stated that the ‘family’ may be around from time to time to assist in cleanup.
At first this didn’t really concern me, but as I got to thinking about it, am I liable if one of the family member gets injured on
my property? Is there a general waiver of liabilily I can have him and his family sign to protect myself or something? Any
thoughts please.
Scott in Kouts, IN
Check with your insurance carrier. My Builders’ Risk policy covered everyone on the site that was not employed or
involved with the construction. Visitors were covered, the same way my homeowners’ insurance covers visitors to my house
if something were to happen.
Forums
Folks, I’ve run into a couple of uninsured subs, one of which I would like to use. I know that this is the kiss of death, is
there any way to protect yourself if you use an uninsured sub? Can you have them sign a waiver of liability, etc.....???
Randy in Dunlap, TN
Randy, I know some states do not require a contractor/sub to carry Workmen’s Comp if they have no employees. I also
seem to remember a thread that Florida or Texas allowed them to do without it and there was some generic waiver of
liability.
Brian in AK
Forums
My husband and I are planning to build in Pasco County. We are concerned because most subs don’t seem to have
Workmen’s Comp because it is too costly. They have signed the exemption form though. I spoke with an attorney who
said that the exemption forms are accepted here in the state of Florida, but that it won’t really keep anyone from suing me
if they get injured. Has anyone found an insurance company who will provide temporary Workmen’s Comp to an O-B
who is not a GC? I have called many companies without any luck. Are most O-Bs just going ahead and building without
any Workmen’s Comp. coverage?
Susan in Tampa, FL

Susan, the form you are referring to is called a DWC 250, NOTICE OF ELECTION TO BE EXEMPT fldfs.com. Here are
the only 2 people that can fill out the exemption form and qualify for an exemption: CONSTRUCTION INDUSTRY “COR-
PORATE OFFICER, or a NON-CONSTRUCTION INDUSTRY “CORPORATE OFFICER”. So therefore, unless these contrac-
tors that you are making reference to are one of these, they are in violation of the law and are subject to a big fine.
So don’t hire a contractor who can’t provide a current State contractor’s license number. One of the requirements for
obtaining a contractor’s license in the State of Florida is to get Workmen’s Compensation insurance. Once the contractor
provides you with his or her contractor license number, call the DBPR (Dept of Business and Professional Regulation) and
verify that he’s actually licensed to do what he claims that he’s licensed to do.
I would go a step further and require that they have liability insurance as well. That way you as well as your house will be
protected. I hire quite a few contractors for Orange County Government facilities and have never had a problem with a
contractor failing to produce both workman’s comp and liability insurance.
David in Tallahassee, FL
Journal
Here’s the update for the past few weeks:
Wetlands: I sent in the remainder of our mitigation payment, so when those checks clear, we’re officially done! Woohoo!
Permitting: I stopped in at the permitting info desk on Friday, only to be met by a harried, terse, but not unkind man (albeit
with no sense of humor). I asked where we were and when we’d be done. I also had a few documents to add to our
permitting packet. I gave him our property address and he came back with “you’re number 93 on the list.” I asked him
how many they typically get through in a day, and he simply said “it doesn’t work like that.” The guy next to me in line,
obviously an old hand at this, laughed. He said they had 300 customs, 600 tracts, etc. So I asked “so 93 isn’t too bad
then?” He said check back in a week. I asked what number I should call, as I was never able to get a live person on the
phone, and again, the guy next to me laughed. He just said to stop by again in a week. Okay then.
Septic/Well: Dropped off the paperwork to these fine folks and also received some basic education about wells. Also, I
ran into a family who owns two lots on Starry and is o-b’ing there. They are from Port St. Lucie. I referred them to this site
and gave them my phone #. We need to call back in a few weeks regarding the septic permit. Also, we need to hire the
well co. ASAP because they need to submit for the well permit. We are going with a HOOT septic system, as advised
by our soil guy. It’s supposed to be better, but more $$, and should raise fewer flags in permitting. I hope it’s worth it and
we’re not being taken for a ride!
Cara in Orlando, FL
Journal
Well my Friday morning at regional was pretty productive. I managed to get Zoning/Planning approval (even though its
not reflected below) and Mechanical in the bag. Mechanical was actually an interesting experience. The first Heat Cal-
culation I submitted had me maxing out the boiler for just my heating needs. They obviously had issue with this, because
they felt I needed 40K BTU capacity for my domestic needs. I knew I had enough capacity because the heat calc didn’t
adequately reflect the needs of my home. Basically, after having some conversations with regional we ended up modify-
ing the heat calc to fit an ICF and SIP home. Kinda cool that they worked with me, but it took about five hours of conver-
sation to do it. Permit progress summary below. I’ve uploaded the heat calc, and a example energy star brief as well.
Department Status Date Checked Reviewer Comments

Mechanical Approved 14-apr-2006 10:09:00 DARYL
Out to Review Approved 11-apr-2006 11:41:46 JAN Arnold W.
Mechanical Disapproved 11-apr-2006 08:15:56 DARYL 1. Please provide information on water
heater to verify efficiency and BTU input and suit
ability for dual use. What about the domestic
use--it does not seem you have any sizing left for
it. 2. Please describe symbols in loft and family
room. 3. Need fan cfm and static and OSA duct
sizing for fan in theatre room. 4. Safe room is non-
habitable – therefore no ventilation needed.
Construction Disapproved 10-apr-2006 07:48:42 JOHNP Walk through OK.
Out to Review Approved 06-apr-2006 07:55:31 JOHNP
Zoning/Planning Disapproved 03-apr-2006 07:18:00 MINDY 03/30/06 BG
Floodplain Approved 29-mar-2006 09:01:28 JEANNINE
Enumeration Approved 29-mar-2006 07:39:14 MARLENE

Chapter 13: Six Months to Victory O-B Connections
One lesson I have
learned is that
we should have
Time line: Groundbreaking hired one sub to
do both plumbing
and HVAC. We
didn’t save that
“Integrate” much by hiring the
moonlighting guys.
And, now we’re to
Y
ou remember the duties of a manager — POIMM — Plan, Organize, Integrate, the point where it’s
getting confusing
Measure, and Motivate. You are two-thirds through this book and you have about who’s sup-
only dealt with planning and organizing so far. This reflects reality, because posed to do what.
a general manager should spend 65% – 75% of his or her time on the future. As the For example, we
have to have a
contractor for your home, you are about to get down to the present and handle your power vent on our
responsibility to integrate. hot water heater.
The plumbers
install the hot
Integration is the coming together of the parts. It will be your job to get the water heater,
people on your team to work together. You have selected people with a common work but they say the
ethic and standard of construction quality. Nonetheless, there will need to be careful HVAC guys should
be doing the vent
coordination to make your project run smoothly. and they can’t
agree on who’s
You will need to coordinate the trades by running the schedule smoothly responsible. If we
had just hired one
and managing the site for efficiency. In many cases you will need to bring people and shop in the first
their required materials together in a timely manner. Take responsibility. If a portion place, it would
of the work is not done in time to enable the work of somebody else who depends on have been trans-

186 • Chapter 13: Six Months to Victory
parent to us about it, you are responsible. If materials are not there in time for the next sub or the next
who was doing step, you are the one responsible. You settle disputes and facilitate the work of others.
what – it would Your function is to make things easier for everybody else on the team.
have just been
done.
Susan The average owner-builder in our survey had about a dozen different sub-
Sources Say contractors to coordinate. It is possible to have up to 50 subs and up to 50 suppliers
The Complete serving your project.
Idiot’s Guide to
Building Your
Own Home
details a DIY sur- Step One
veying procedures
for marking out
your site. How do you begin?
(See page 263)
After we had laid out all our plans for the project and came close to ground-
Sources Say
“[Self-] work breaking, I realized, believe it or not, that I had “nothing to wear”. We headed for a
can distract you thrift shop and bought a construction wardrobe for about $15. I found later that I fit
from your more right in.
important job of
overseeing the
work of others. In order for groundbreaking to occur, your lot needs to be staked and marked
Your most valu- with the pattern of cuts that your excavator will dig. Staking lots is one of the few
able skill is that
of boss – sched- things that general contractors may actually do. My construction advisor supplied us
uler, inspector, the service, using an engineer’s transit, a couple of long steel measuring tapes, metal
coordinator, and stakes, string, a sledge hammer, and powdered lime to mark the surface.
referee.”
From The Com-
plete Guide to A very good description of the task is found in The Building Buddy by John
Contracting Your English. You can attempt to do it yourself with instructions, but I suggest having a
Home
(See page 263) surveyor perform the service. It is not a major task — less than half a day for a flat
lot. Check prices by phone. If you are having an official survey of your lot performed,
Forums you can purchase the staking service as part of a package from a surveyor.
Hello everyone,
I just wanted to
let you know a Once your staking is done, and there are no permit hold-ups with your proj-
method that has ect, you can break ground. When we got to this point, we held a groundbreaking cer-
yet to fail for me
in managing a emony of our own, took pictures, and watched while the excavator started. Within an
project. I show hour, there were four inches of snow on the ground. Our intrepid excavator jumped
up in the morning down from the cab of his backhoe and dragged a booted foot on the ground in several
and hold a small
meeting to find places pulling the mud and lime into a smear that he could see. He finished the job
out subs’ concerns perfectly even though the lines were covered with snow.
and shortcomings,
material shortages
and the like. I
then walk the site How to Get Subs to Show Up
briefly then I leave
them to do their
work. I show back The contract documents you have signed with your subcontractors provide
up after lunch to you protection from unexpected loss, but they don’t guarantee that you’ll get what
receive materi- you want. As in any management situation or any human situation, results depend
als, if any, and
speak to each on reciprocity, relationships, and follow up. Owner-builder Gary Ziser explains:
foreman to check
for problems. If “You run into the fact that things are often done in a kind of simple form. It’s
there are none, I
leave again FOR difficult to enforce a bid. You have to have a good relationship with contractors
THE DAY. I do a to have a meeting of the minds on things. Specifications on homes are not that

Chapter 13: Six Months to Victory • 187
detailed. That’s why you need a meeting of the minds, and much is based on trust. walk-through after
This is one of the biggest problems faced by owner-builders because it is a one- everyone has left
time situation and expectations are not well-understood either way. I don’t think for the day – basi-
cally a mini punch
you can cover it all on paper.” list for tomorrow’s
meeting. None
You will build trust and relationships with subs through a series of steps: of the subs are
required to work
on Saturday IF
1. Through interviews, bidding, and checking references, choose trustworthy THEY ARE ON
tradesmen. SCHEDULE. All
2. Agree on contract terms including start and finish dates. the subs clean
up daily, and I
3. Send the subs a confirming letter indicating that you will do your part to always thank them
make this a smooth project. each morning and
afternoon. I find
that leaving these
Indicate that you will keep the job clean, pay on time, and be available on people to do the
site or on cell phone for fast answers and decisions. You will keep people out of each work that they
other’s way as much as possible. Remind the sub that 20% of the marketplace is have been hired
for and PRAISING
owner-builders like yourself, and jobs like yours will help him build market share. If them for that work
he fulfills his part of the bargain, you will recommend him actively to others. has been very
effective. Again,
this method has
Underpromise and overdeliver on these items. This establishes reciprocity. been effective so
far. The approval
4. Call once a month before the target month, once a week until the target process is stringent
week, and two to three times until the target day. Call the night before the but the results are
worth it.
scheduled day.
Jim in Austin, TX
5. If they miss an agreed time, call within hours. If they miss three promised
show-up times, make arrangements to replace them with a back-up sub. Sounds like a
6. Don’t pay until the work is done and inspected fully. Pay promptly. good plan, but on
my first O-B home
the subs weren’t
all able to be
Rules of Work there are the same
time every morn-
ing. My subs also
You know you have good subcontractors when: had lots of other
jobs to do.
Kevin in Hender-
∆ They start on time. son, NV
∆ They finish on time.
My framer started
∆ They do what they say they are going to do.
last week and I
∆ If a problem arises, they work with others to determine whose fault it is. guess I have been
That person fixes it on his dime. being the mother
∆ They are honest in their quote, care about their work, and their final bill is hen type. I work
what they quoted. 1:30 pm to 10:00
pm at my regular
∆ If they can’t do something, they admit it. job, and I figured
∆ They have the right tools for the job. this would be
∆ The work is straight and sturdy, plumb, square, and level. great for contract-
∆ Neat finish, work matches specifications, plans, and contracts; done using ing my home. It
best known methods. has been great up
until this morning.
∆ They use good materials, well-joined, clean, and thorough with attention
to detail and quality. The work lasts, and requires zero subsequent mainte- I purchased my
nance. land almost a
∆ There are no obvious flaws. year ago, and
∆ You could picture the work in a million-dollar home. have cleared
it, designed the
∆ You are satisfied. septic, drilled a

370’ well, brought Running the Job

all utilities to the
site, bid everything
out, excavated, One family from Tennessee (mentioned in Chapter 1) went on vacation
poured footings while their house was in the framing stage. When they got back the roof was on, and
and foundation
etc...basically I
they sat in the car for a moment admiring the structure. Husband and wife then felt
have become a sudden sinking feeling as they realized that the framers had forgotten the second
quite intimate with floor. Their two-story was a one-story.
my 5 acres.
My framer asked Sometimes the input you make into the construction process is as simple as
me this morning reminding the subs how many stories to build. If you are not a construction person,
whether or not
I was going to
you may feel unqualified to run the job, but you’re not unqualified. You have done
spend 5 hours a detailed planning of budget, calendar, and specifications. These are the keys to a
day, every day good project.
at the site. To be
honest I was taken
back a bit. He As the owner, you are really the most qualified to say if a thing is done right
informed me that during construction. At the same time, you should avoid the temptation to be a
he worked better
and faster when
know-it-all. By respecting the opinions of qualified subs you can learn much and get
left alone. He a better house. In management, there is a term for attempting to supervise the small
asked if I could details: “
only spend an
hour or two a day
”. You will get better work out of subs if you don’t micromanage their work.
at the site while
he is framing. Your job as contractor is to facilitate and coordinate the work of others.
I agreed, but
have been angry
Make sure their materials are on hand and the preliminary steps to their task have
inside all day. In been completed. The best way to do this is to be on site. I found the work endlessly
addition to that he fascinating and stayed on site full-time during our project. Most of the owner-build-
informed me he
would be done
ers I interviewed recommended half-time, that is about four hours a day. Particularly
with phase one the first and last work hours of the day. This schedule enables you to check on the
of our contract work for the day in the morning and inspect it in the afternoon. (In our survey, the
tomorrow, and
would be expect-
average owner-builder couple spent a combined 2.5 hours a day in management time
ing payment for and a like amount in self-work time during the construction phase.)
phase one to wit.
He had told me
to expect him
Subcontractors have often told me that it is important to have one person in
to be done with charge of the project who can be decisive. If you are married, work out the decision-
phase one at the making roles of the spouses for the various phases of the project, and work within
end of the week
originally. Not a
them. You will be called on to answer questions and explain plan details constantly.
big deal except If you don’t know the answer on something, you can talk it over together and net-
trying to pull $9K work with people you trust in the evening. You can provide an answer the next day
in cash out of the
bank (Washington
or very soon.
Mutual), on one
day’s notice. I got Part of your time on site can be to inform affected trades of the upcoming
it done, but that’s
beside the point.
schedule and arrange delivery of needed materials by phone. With current bargains
available on wireless phones, you can easily carry one with you wherever you go. Take
The point to this time to program in all the sub and supplier numbers you think you will need. Use
post is that after
talking to my
your phone to check prices on materials for which you haven’t yet found a bargain
“support group” I price. Check all deliveries that come to the site for completeness, quality, and pricing.
have come to the Make sure the site is clean, and clear any obstructions out of the way of your subs.
conclusion that the
last thing I need
Should the work of subs not meet your standards, it’s up to you to point out deficien-
at this stage is cies and insist on remedies. Be prepared to let a sub go if it becomes necessary. It is
an upset framer. your project.

Cost Accounting I’ve made the

personal commit-
ment to manage
The fourth function of managers, after Plan, Organize, and Integrate is my project, but
“Measure”. One of the key measures you will track on your project, the one that not overmanage
my project. It’s
makes a difference to your wealth, is costs. You need to track every actual cost that my own control
goes into your house, and project expected costs. issues, I suppose.
I’m tired, stressed,
worried and a
Actual costs are the “as delivered” and “as performed” charges you pay for whole bunch of
materials and labor on the project. Expected costs are the prices you will pay for other things I’m
items not yet delivered or performed. Together, the two costs give you an ever-chang- too tired to name,
but I’ve done my
ing total of the cost of your house. research and
homework, so I
You can use a computer to great advantage in measuring costs. Our com- suppose I need
to step back and
puter spreadsheet reflected the total of all items by categories and showed the effect let the process
of any actual or projected change on the total construction budget. In some ways, the happen. Besides,
spreadsheet was cumbersome however, because of the sheer number of items we paid I could use the
extra sleep.
for. You can’t really view all of your costs on one computer screen.
I thank Mark for
Perhaps a better system is the one we use to track our family finances. We his book and
this website. It is
have a financial management program called Quicken™ on which we enter every a great source
normal check, credit card, or cash expense, and categorize them. For instance, we of support and
might make a supermarket purchase and when entering the charge into Quicken’s information.
register, we specify that it falls under the “grocery” category. We can have Quicken™ I suppose it’s time
report all grocery expenses for the past year with a simple command. to get something
to eat, and try to
gain back the 8
If you use a Quicken-type personal financial program to track construction lbs. of weight I lost
costs, you can create categories that make it easy to match up totals to your original last week:)
budget. For example, you could have categories for “new house — electric”, “new Thanks for letting
me share.
house — lumber”, “new house — tools”, and so forth. You can produce detailed Bruce in Union,
reports by categories or time periods at any time. WA
In reading your
It can be very valuable to track your expenses closely. You don’t want to leave post, Bruce, I can
it to your lender, who produces periodic reports, for several reasons. First, the lender relate to the issue
doesn’t have knowledge of all costs on your project. By actual count, we purchased in both aspects.
Having been in
more than 500 items separately from our bank loan, even though the lender paid the business for
most of the big bills directly in our case. The separate purchases can make a big dif- 25 years as a
ference in your totals. electrical contrac-
tor, I’ve seen it all
almost. When my
Second, your tracking will provide you control and overall project savings. wife and I were
You may find mistakes in prices and quantities on some of your invoices, and usu- wiring custom
houses, we were
ally not in your favor. You can change and adapt as individual costs go beyond their known for the
planned limit, in order to protect your overall total. When you find cost savings quality of the
on some items, you can apply them immediately to reduce projected overruns in job because we
always treated the
other areas, or spring for upgrades. None of your choices will be made in a financial house as though
vacuum. we were the
ones who were
going to live in it.
Third, cost control brings you onto a par with professional builders. They I always enjoy the
have developed some sophistication in tracking costs for the purpose of protecting personal contact
we had with the

owners. On the their profits. You, too, have profits (equity) to protect, and the effort you make track-
other hand, there ing costs will likely exceed anything a general contractor can do on any one project.
are some of us as
owners who the
contractor hates
to see our smiling
faces on the proj-
Daily Record
ect. I’ll tell you a
story about a lady Once your job begins, you will find it helpful to have a daily record of what
years ago that I’ll happens on the job. Various tradesmen, salesmen, inspectors, and service representa-
never forget. I was
installing a 400- tives will visit the job site. Deliveries will occur. Promises, decisions, arrangements
amp service with will be made. You may lose a phone number or forget an important fact. Remember
a couple of Cutler that “a short pencil is better than a long memory.”
Hammer panels.
Cutler Hammer at
the time was one Keep general time records of tradesman work. These proved useful to me in
of the superior settling disputes. Keep specific time records of your own activity on the job.
products in electri-
cal distribution.
She proceeds to Time records help you track effort and redirect it. From a management
ask me about the point of view, they will tell you if you are really saving money. By knowing your time
Bryant panels,
which were investment you can make your next iteration of a task, or process, or indeed, your
basically build- next house more efficient. My time records tell me that I was on site much more than
ers grade panels I needed to be to do my job. The 800 hours we spent doing the electric work pointed
that we refused to
use. She tells me up my painful lack of planning. I now understand that we could have done a month
that she had read of planning on that task and saved nearly 500 hours in execution. With that change,
about them in a we could have done the electric work completely in 320 hours.
home book and
that “that’s what
all the profession- Owner-builders in my first interviews reported over 1,000 hours of time
als are using”! You spent managing the job and less than 300 hours of advance planning. This is back-
can only imagine
my reaction. I still wards. Later surveys show that with an average of under 700 hours of planning, an O-
laugh about it B can spend less than 500 hours in management time during the construction phase
today. and bring in a successful project. More money is saved, and less effort is expended.
I was always up-
front on payment James C. Maxwell said that, “To measure is to know.” I would add to that “to
schedules, unlike know is to control”. Your time records help teach you how to manage your efforts and
your framer. My
payment was half accomplish more in much less time.
due after rough-in
inspection and
the remainder
after final. Easy Your Video Camera and Other Unlikely Tools
system. More than
once after we got What will be your most valuable tools in managing the construction of your
started we had
owners insisting house? For me, any project is an excuse to buy a tool, and building a house was a
on taking a small chance to buy more than a hundred tools. I started with new toolboxes and a tool
draw so that we belt, and enjoyed tremendously buying tools on sale and at contractor prices. In truth,
wouldn’t be strung
out, but we’re talk- however, traditional tools don’t help you perform your role as general contractor for
ing large 5,000+ the project.
sf houses that had
over 100 fixtures
in them. What I used the most was a broom. I bought a good “stand up” dustpan with
a long handle that allows you to pick up without stooping. My five-horsepower shop
Now that I’m on vac was also very useful for keeping the site clean.
the other side,
starting my own
O-B on 7 acres,

I thought I would need a cellular phone, but budget constraints forced me I know where
to cancel that. With current low wireless prices, though, you can put a cell phone you’re coming
to good use. I thought I would need a pickup truck to haul things. That, too fell to from. This project
is a part of me
budget constraints, and I never missed it. Most all of the suppliers provided delivery, and it’ll be hard
and I accomplished a lot with the trunk of the family car. Once in a while I slipped for someone to tell
down the highway with pipe or lumber traversing the passenger cabin and sticking me it’ll be better
if I stay away.
out the side window, hoping not to get pulled over. The house got built without my However, the only
owning a pickup truck. items that I’m sub-
bing out are the
foundation and
The major management tools that you will depend on are your written budget the drywall.
and calendar, your plans and detailed descriptions. Your daily record will become a
lifesaver as well. To this, I would add a long and a short carpenter’s level and a long Good luck on
the rest of your
and a short measuring tape for checking the straightness and squareness of the work project!
you inspect daily. A handy homemade tool is a corner of a four by eight-foot sheet of Ron in Bealeton,
plywood. Cut it as a triangle with the two factory edges measuring about two feet. VA
Cut a hand hole in the middle of the triangle and shove it into corners as a shorthand Ron, thanks for
way of determining straightness and squareness. the reply. I have
an update on my
situation. I fired
A computer can be a very powerful tool for managing your project. You can my framer on Sat-
shop, plan, estimate, track and communicate with the aid of a computer. A video urday. It took him
camera is another electronic friend to an owner-builder. Use it to document work and his “helper” 6
days to set my first
and to record what is inside the walls of the house and underground. Narrate your floor I-Joists, posts
pictures with explanations of the decisions you made when building. and sheathe the
floor. On Weds.
of last week he
The video camera came in very handy for us. During construction we placed had informed me
a conduit pipe inside the wall of the laundry room to receive wires for the eventual that he had been
electronic lawn sprinkler controller that would go in that room. After the house was working 10-12
hr. days on my
sheetrocked, we couldn’t locate the pipe until we reviewed the construction video. By project. Curious,
using the known thickness of wall studs as a scale of measure, we figured the loca- he knew I went
tion of the top of the pipe within one inch. We have also used the video for locating to work at 1:30
pm. My neighbor
underground pipe when making changes to the sprinkler system. We didn’t own a across the road
video camera — we borrowed one. But we did own a computer. informed me he
would leave about
2 pm every day.
Emotional Roller Coaster He finally finished

sheathing the
floor on Thursday
When we built our house we were surprised at the intensity of feeling the and informed me
project brought to us as first-time owner-builders. There was real anxiety and disap- that he would be
setting walls on
pointment. When my schedule was blown away by a boundary dispute with the neigh- Friday. He asked
bor, I was tremendously disappointed and angry. For the first time I can remember, I that I pick up an
cried myself to sleep that night. additional couple
of items at the lum-
beryard on Friday
There were real fears about performing adequately and building a respect- morning, which I
able house. Many times I veered into areas of uncertainty where I experienced an did. I called him
from the lumber-
unaccustomed lack of control and felt lost and inadequate. I felt alone and lonely yard at 7:30 am
many times and wished for support from anywhere. Very little was forthcoming. on Friday and he
answered, inform-
ing me that he
When the house was built, Elaine and I both felt tremendous pride and sat- was at breakfast
isfaction over the accomplishment. It was a kind of glow that stays with us continu- and that they

would be out to the job in a little bit. No ously. I could say that the project, however frustrating and painful,
big deal. My lumber guy had another yielded the most enduring satisfaction I have ever known.
question, so I phoned him back within 2
min. after hanging up. He didn’t answer.
All of this became reason to write this book. We wanted
I proceeded out to my site a 1/2 hr to help others to steer around the pain and loneliness that we felt
away, and guess what, no framer. I with so little guidance planning and building our house. As we
had other things to do, so I went about
them until I had to leave for work at met and talked with numerous others who shared the experience
12:30 pm. When I left, still no framer. we learned that we were not alone in any of these emotions.
On my way to work I tried calling him
but all I got was voicemail. About a
half-hour after I got to work I had my Owner-builder Debbie Crosby stated her feelings articu-
lumberyard call me questioning an order lately:
my framer had just called in. He stated
that he had some below grade lumber,
and that he would need a whole UNIT “This was our first owner-built house. It was scary to sign
(~200) of 2x6 20-footers. I only have paperwork to owe this much money. I was sick to my stomach.
about 40 2x6x20’s in my entire 2,900 There is a fear to be able to build what you have in your mind.
sq. ft. house. He also said we needed
the garage lumber. It was delivered It’s exciting to see your dream materialize. You anguish over
on Weds. of that week, along with my almost everything, that you made a wrong choice. I redid my
entire 1st floor package. window in the kitchen three times. It wasn’t coming out like
Needless to say, I left work and went I wanted. I tried using two windows, and stared at the gap
back out to my site. I tried calling him, between them. I tried a garden window — not right. Then I just
but once again I only got VM. When I got a big picture window. I had to eat the cost of one of them.
arrived, I could tell he had been there,
but had left since. I left him another VM I really stressed over that window.”
telling him I needed to speak to him
immediately.
Other common owner-builder emotions:
My wife in the meantime on Friday
afternoon decided to make sure he was - Worry over staying on budget, running out of money
current on his insurance and bond. Mind
you, my wife is a commercial insur-
ance agent and has written contractor - Fear of not meeting the deadline
insurance for 21 years. Lo and behold,
he had let his insurance lapse the week - Friction between spouses
before he started on my project. We
checked his insurance mid-Feb when
we locked in our contract, and he was - Self-doubt
current then, but not now.
- Aggravation
Now you may ask, if my wife has
done contractor insurance for 21 years,
- Miss the family because of so much time away
why aren’t we working with one of
her longtime customers? It’s because
we are building 150 miles from where - Disappointment over those who intend to help but
she works currently, but when we are don’t
finished, she will work from home. But
that’s all beside the point...
- Uneasiness over decisions made without adequate
We finally got ahold of our fabulous information
framer on Sat afternoon, and informed
him we were firing him. - Discomfort over many incomplete tasks and nothing
finished
I have two other framers I am meet-
ing with this week, so hopefully I will
have something locked in soon. In the Although good preparation makes every bit of this easier,
meantime I have $10K of lumber sitting you will still feel a surprising intensity of emotion when you build
at my site tarped. I’m just glad to have
the bum gone. for the first time. You are not alone.
Bruce in Union, WA

Sources Say
The Complete Guide To Contracting Your Home gives list of things to have at job site, like first aid kit, extension cords,
hose, trash can.
“Have materials delivered early so they can be exchanged or corrected before they are needed…
“Pay schedule: 45% after rough-in, 45% after finish work complete, 10% 2 weeks after finish work complete.”
“It may take ten years to learn how to lay bricks properly, but only ten minutes to check the work for quality craftsman-
ship.”
“Make sure when paying cash for work that you keep documentation of the work done for the IRS. Write a check in the
sub’s name and have him countersign it. Then cash the check. This way you have an audit trail to prove that you paid the
sub for the work done.”
The Complete Idiot’s Guide to Building Your Own Home has a chapter running the job including dealing with subs,
inspectors, suppliers, and lenders.
“. . . you’ve selected your subs. You’re satisfied . . . that they are honest, trustworthy, and experts in their fields. Now
let them work. Don’t try to supervise every blow of a hammer, the placement of every stud. They know more about their
trades than you do . . . they take pride in their work. Let them do it.”
From Be Your Own House Contractor
(See page 263)
Forums
Hi, I am an owner-builder who started building in Feb and finished in Dec. Since I did it myself, are there any special
deductions I can take for the year? Or is it still the basic deductions you’d get buying any house (points, interest, etc.)?
Marty in Indian Trail, NC
If this is a primary residence you can only deduct the interest on the first $1 million in mortgage (ha! sorry Hillary Clinton!)
and you may deduct the property taxes you actually paid for the year. If you paid points out of pocket during the escrow
period, these MAY possibly be deductible (certain criteria need to be met.) If this is a rental then there are other possible
deductions.
However, as an OB of primary residence, you should keep track of every penny spent...as this is what establishes the
“basis” for your house. The basis is used in calculating your capital gain. But even if you are building for your own use...
always save all the receipts since you NEVER know what may happen in the future. This could turn into a rental. Who
knows!
Paulita in Aptos, CA
Paulita, if I were a real builder and building houses for re-sale, I assume that I could deduct the costs of the house in the
year that I spent the money (assuming I’m using cash accounting) against ordinary income. I would ignore basis rules and
take the sale of the house as income in the year I sold the house. If I’m right, real builders can use the deduction earlier.
Any ideas?
Peter in Gilford, NH
You would have to do the research to confirm, but I believe starting with 2004, there was a new law for Itemized deduc-
tions which will allow you to deduct Sales Tax paid instead of State & Local Income tax paid... if it is higher. If you paid a
lot of Sales Taxes on Building materials, as well as other purchases, this may be an option and might save some money. I
currently plan to build, and will keep receipts for everything this year and do a comparison at year-end. Of course, it may
end up my State & Local taxes are more than sales tax... but, it is an interesting option.
Kevin in West Chester, OH
In IRS Publication 600 (new for tax year ‘04) it states:
“New for 2004, you can elect to deduct state and local general sales taxes instead of state and local income taxes as
an itemized deduction on Schedule A (Form 1040). You cannot deduct both. Generally, to figure your state and local
general sales tax deduction, you can use either your actual expenses or the Optional State Sales Tax Tables contained
in this publication. Actual expenses. Generally, you can deduct the actual state and local general sales taxes (including
compensating use taxes) you paid only if the tax rate was the same as the general sales tax rate. Do not include sales
taxes paid on items used in your trade or business.“ These taxes (in trade or business) are deducted from Schedule C.
Just my luck...NH doesn’t have sales tax. If you build for profit as a business, you would deduct sales tax under your
Schedule C and still take the state tax under Schedule A. You would get both.

The sales tax paid as an independent contractor cannot be deducted under Sched. A (Itemized deductions) and in any
case cannot be deducted twice. No double dipping!
Any business owner who sells retail products to the public “double dips”. The retailer gets to deduct the sales taxes they
pay for products they sell to the public as part of their business. In addition, any state/county/local income taxes/fees
paid would be also be deductible.
So a real builder must be able to do the same. They must be able to deduct the sales tax they pay for materials they
purchase to build the house (on their schedule C or separate corporate return) and also deduct any state/county/local
income taxes/fees on their schedule A.
The election to choose to deduct sales taxes vs. state income taxes is allowing you to choose to deduct sales tax that was
not otherwise previously deductible (such as an individual who doesn’t own a business or a business owner who pays
sales tax for items unrelated to the business).
The sales tax you paid as part of your business are always deductible if the item you purchased was deductible.
My two cents worth...

Paulita, I think you have explained this well in your post. What the IRS website states is --> Remember that the deduction
for state and local sales tax is available only if you itemize deductions on Form 1040, Schedule A. Check the box on line
5 of Schedule A to designate whether you choose to deduct state and local sales tax OR state and local income tax on
your federal taxes. You cannot deduct both.
We tried to see if we could do this for our Federal taxes last year, but had not spent enough that year on sales tax. We’ll
see what will happen for this year – we don’t have a state tax in Nevada – only sales tax. Thank you Paulita for contribut-
ing to this forum.
Another post referred to retailers paying tax. When a retailer e.g. Home Depot buys supplies from the wholesalers they
do not pay state sales tax, that sales tax is paid by the consumer and collected by HD. When a contractor buys supplies
they can give their sales tax ID number and also not pay tax, but that tax is passed on to you and I the users of the actual
product when it is used for our job.
Lori in Sparks, NV
Forums
It is a huge roller coaster and we haven’t started yet and I have never had so many dreams in my life – all about home-
building – I sometimes wake up already sick of the subject. Keep this thread going. I am learning a lot.
Kari in Colbert, WA
How do you stay sane during the building process? I felt so rich going into this. Now I feel so poor. We have run through
1/3 of our loan. There isn’t a single check I have written which I can’t justify to the bank. I’m not buying marble floors...
What do you do to avoid going crazy? Drinking myself to sleep isn’t an option...
Joe in Elkhart, IN
Sorry Joe, no drinking allowed unless you budgeted for it. After all, if you didn’t plan for it upfront, drinking now will just
bring you further out of budget requiring further drinking, spiraling into the “money pit”.
I think every O-B should rent the Money Pit movies (both the original and the remake) before the attempting this process.
Peter
P.S. Might have to start a new thread on just how much you need to budget for remedial drinking? LOL...
Joe, I feel your pain – I’m getting close to done, and we are going to pretty much hit our budget, but there was some
ebb and flow. By the time I had the structure dried-in I was burning money fast. But as I continued, I started coming under
budget, and the unders are starting to counter the big overs. I’m assuming you have a budget for each item, e.g. ICF, foot-
ings, floors, appliances, trim, etc.? Are you consistently going over on everything? You might need to initiate a corrective
steering now to be sure to finish the project if everything is coming in way off of your budget. If it won’t cause problems
for your final appraisal, you may be able to leave a couple of rooms unfinished, or downgrade the finish materials, to be
sure to complete your project. My plan was to install carpet in a couple of rooms that we had planned wood floors, until
everything started coming back into alignment. Now I’ve recovered most of my overages, and am within the margin of

my contingency, starting paint next week. In my case, my budgets were pretty good, but the volatility of steel caught me
off-guard, and I went over by 100% on my structural steel, and 100% on my rebar. Ouch! Good luck. Hang in there!
John in Erie, CO
Forums
After many, MANY, many months of planning, delays, disappointments, more delays, etc. we finally broke ground
TODAY! Since I found out the excavator was moving the equipment yesterday I have been so anxious, to the point of
wanting to throw up! Anyone else experience this? Please tell me this is going to go away!!!! Any thoughts from you
experienced O-Bs? Thanks!
Marsha in Frankfort, KY
Marsha,
This is a pretty big project that you’ve obviously invested a lot of personal time and money in...I think anxiety (or some sort
of nervousness) is something that all owner-builders face.
I would try to turn this into a positive, though. Try to distance yourself from the project a little. Try not to take personal
ownership in the way everything happens on the site.
I poured my basement walls on Friday. In the middle of the pour my ICF sub had a major form blowout that lost about 4
yards of concrete. I helped them get rid of the concrete, reform the ICF forms, and we proceeded with the pour.
Afterwards, the ICF guys (who have worked with a bunch of owner-builders) asked me why I didn’t freak out. I simply told
them it wasn’t my problem. They’re job is to give me ICF walls...any mistakes they made in the process were going to be
on their dime, not mine. I hope it goes well, Marsha.
Arnold in Colorado Springs, CO
Thanks Arnold! I’ve actually been much better since that first day! We have had our land for six years in which we have
had many picnics, bonfires, etc. and it really freaked me out to see this guy making a mess of it all! I’ve tried to remember
that this is going to be FUN!!! We have been urged by friends to buy other houses and not go through the “headache”
of building, but this is actually what we WANT to do! (If we are going to spend this much money on a house, we want it
to be something that we really love!) Turns out the guy is not going to finish the excavation this weekend, so now I’ve got
to get a hold of the footer guy and reschedule him – and I think it’s great!!! I’ve just decided I’m going to focus on really
ENJOYING this project and not getting bogged down in all the details – I’ll leave that to my husband! Thanks again for
your advice and good luck with your project!!! Marsha
Marsha in Frankfort, KY
Forums
Last year my friend finished his and his wife’s dream home on our lake. They had so many setbacks, contractors fired, hur-
ricanes, sub problems, It was a mess. It took 17 months to finish. During this time the wife and I were getting plans drawn,
setting up subs, excavating the lot and doing all the things the first 1,000 hours require. I remember thinking that I was
going to have no such problems, the subs I had lined up were top-notch; the ICF contractor visited our home and we felt
great about him as well. Everything would go smoothly, we said, our lives are blessed.
WELL, this post is to give all the planners a heads-up. ALL will not go smoothly and there will be problems. Concrete trucks
get stuck, walls are not plumb, doors not in the right place, people do not pick up after themselves (bad mommy train-
ing?) lumber gets wet even when you put someone in charge of covering it, footers fill with water, tools will get stolen and
people will lie...
So grand illusions of smooth sailing will most likely not be in your weather pattern. Only keep your chin up and look
down the road to the end results and you will make it through. Oddly enough our marriage is holding strongly!!
Even the pooper door gets blocked.....(photo at link above)

Easier to move the Jiffy-John than your whole home. Cheer up, it will get better...
James in Broadview Heights, OH
Thanks James, all is good, our Dietrich flooring is in, and the 3/4” T&G will be next.
I started this thread to get some more stories and to let the disillusioned know they were not alone. I remember a post from
Phil where his concrete trucks slid down a muddy slope. When mine got stuck, I thought about all us O-B’ers and the trials
and tribulation we go through, might make a good book (not to outsell Mark’s O-B “Bible” of course.)

AS O-B’s we all have some challenging days. I think the rewards of ultimately completing a project are very satisfying and
can be financially rewarding as well. As an O-B, you get to use your creative skills, management skills, tradework skills,
and physical strength to make all aspects of a project come together. Do a halfway decent job and you will have a home
you love to live in for one third less than your neighbor’s. Keep this in mind on your rough days.
If people don’t show: Evaluate what it takes to replace them and do so if it is the right decision for the good of your proj-
ect. If you elect to self-perform a trade where you had a flaky contractor, you get to control the schedule and do the work
today instead of manana. Find people working at job sites (especially late in the day after the motivationally-challenged
tradespeople have gone home) in the trades you need and offer money for on the weekend to deal with AWOL subs you
hired.
For low quality work, give the tradesman a chance to explain or correct it. Compare the work to industry standards. If it is
below, document, photograph, inspect, and refuse to pay for it. If the tradesperson still doesn’t get it, grab your jackham-
mer, chainsaw or crowbar and dispatch the work to the dumpster. Find a jobsite where good work is being done, and
get those tradespeople to do your work next.
You need to take responsibility for your own actions, inaction and mistakes and learn lessons from each one. If you don’t
want this responsibility, you should buy a tract house or maybe hire a GC. With that spirit in mind, don’t worry about
the little setbacks too much, just learn from them and overcome them and everything will come out fine. Don’t ignore little
problems or they will become big.
Michael in Cave Creek, AZ
Dietrich Trade-Ready – nice choice of joists. This was my first choice, although I ended up with wood trusses. Around
here, steel work is only commercial so finding subs was going to be more difficult. If the price point was right, I would
have used steel knowing this.
Your also right about the book. The truth is stranger than fiction, and O-Bs all have stories to tell. Most of them are
completely unbelievable unless you have been through the process. Your porta-john got blocked, mine got knocked over
– I had to cancel the service so they would come pick it up as pretty much no one was willing to use it after that. My
neighbor hired a GC to build his house, he doesn’t know the stories he is missing out on (among other things, like at this
point an agreement that he could have done a better job managing the project and saved money).
One of my biggest short-term setbacks was dealing in plumbing materials. We were dealing with a local supplier for all
plumbing materials (PEX manifold, PEX supplies, PEX, PEX tools, finish fixtures, tub, whirlpool, etc.) and had just turned in
a final list of materials we needed for their final bid and scheduling. The next day, their warehouse burned all the way to
the ground, nothing salvageable. Their primary focus was on dealing with commitments they already had in the ware-
house, parts already sold, etc. Since we hadn’t paid for our parts yet, we no longer had any leverage and they had no
interest in our job. Enter several new suppliers, all of them more expensive than what we had negotiated. As with anything
in project management, you have good, fast, and cheap, and unfortunately you can only get two at a time. We definitely
needed fast, I always like good, cheap fell by the wayside.
Sources Say
“Leading from the Center: Influencing and Collaborating for Results”
Keep good company: Those with the strongest networks will be in the best position to garner the resources and support
needed to successfully achieve their challenging goals. Be purposeful about your network and keep good company.
Build goodwill: Networks only matter if others are willing to participate in the projects you have. Build your reservoir of
goodwill so it’s there when you need it most. There will inevitably be challenging situations ahead and you can’t draw
upon an empty reservoir.
Engage: Work gets done and relationships are built through shared activities, interactions, and challenges.
Invest in trust: In this networked world you can’t rely on control to make things happen. Trust is the essential ingredient of
reliable engagement and action. Be trustworthy and respected so others will reciprocate.
Make connections: Leading from the center poses some unique challenges and terrific opportunities. Effectively seizing
these opportunities requires that you think and act like a connector, integrator, and catalyst. Consider and understand the
interdependencies, connect the right people to the work, and work simultaneously to drive results and build relationships.
©The New York Times

Chapter 14: Smooth Execution Saves Money
Sources Say
“The first steps,
such as digging
and Improves Quality the foundation
and pouring
footings, will have
more impact if
Time line: Three to five months out done improperly
than if a door is
hung to swing
in the wrong
Other Daily Duties direction. Hence,
your utmost care
should be taken at
With you as the contractor, there are a surprising number of things nobody the beginning of
will take care of but you. You oversee the details that, taken together, make a clearly the project when
successful project. There is a saying that “God is in the details.” Every day you every step is criti-
cal – particularly
should: through the fram-
ing stage.”
From The Com-
1. See that people are showing up. plete Guide to
Contracting Your
Make phone calls to subs who are about to begin the night before they are to Home
(See page 263)
show up. Call subs who will be coming soon in the evenings or in the early morning
before work. When you get to the site, if people are missing, call right away from the
site. Your records should include cell phone numbers for each of your team mem-
bers.

198 • Chapter 14: Smooth Execution Saves Money and Improves Quality
Forums 2. Check the work.

We built a
garage apt. a few One owner-builder who is a physician from Atlanta paid a premium of
years ago. If we
had good subs, $12,000 to upgrade his cabinetry from Georgia pine to solid cherry wood. He left the
no problem, bad office to check on the installers in the middle of installation day. He discovered that
subs 10% retain- they were installing particle board with a cherry veneer. They claimed he was getting
age they walked
away. Now we what he had ordered. He had it in writing, and stayed on the vendor with calls and
are getting ready visits until the solid cherry was furnished a few days later.
to build a house.
1. How much up
front deposit – the Check the work on your job daily and in detail. See that:
framer wants 30%
and that seems a) It is straight, square and sturdy.
high
2. How much
each draw, per- Carry a tape measure to verify dimensions. Measure the square dimensions
centage-wise? of the house by running a tape measure diagonally from corner to corner.
3. How do I The opposing measurements should be identical if the work is square. You
negotiate if he can check doorways, walls, window openings, and the outline of the house
wants a higher
deposit that I want itself this way. Use a corner of a sheet of plywood (described in Chapter
to pay? 13) to check the squareness of small corners like doorways and windows.
4. How do I word Shove the factory edges of the plywood into a corner and observe if the
a contract of what edges are all flush. Use a four to six-foot level to check the plumb of all
has to be done for doorways.
each draw?
Thanks,
Kathlyn b) Proper materials are used.
It is my policy One owner-builder found the electrician installing aluminum wire, when he
never to prepay
for work; the only
was paying for copper. Several others found that carpenters tried to install
exception I make basic moldings instead of the more elaborate upgrades they thought they
is for custom-made had ordered. There are many possible variations in quality in each building
items like cabinets component from windows to shingles. Check constantly.
bought from a
reputable supplier.
Any subcontrac- c) Proper designs and approaches are used.
tor who wants to
work for me and Never trust your subs completely. Always question their motives when
wants any kind of they make choices about the work. For example, they may say, “This is
advance payment what you need”, when it is a material or an approach that is simply cheaper
needs to bring
materials to the and less work for them.
job site. I will pay
invoice price for d) The quality of the work is as expected.
materials on site.
Then I will pay
weekly based on 3. Give clear directions.
percent complete.
The contractor
can propose a Be available to answer questions and provide direction. If you are not on site
percent complete, all the time, spend a block of time in the beginning and end of each day to provide
but I decide if it direction. At the end of the working day, review with the subs on site what has been
is reasonable. I
will not pay over done to determine if it is what you expect. If there are questions you cannot answer,
90%, if the work take them home and call your trusted advisors or your inspector for input. If pos-
has not passed sible, bring back clear direction the next morning for that sub.
inspection.
Anyone who
doesn’t like my

Chapter 14: Smooth Execution Saves Money and Improves Quality • 199
4. Anticipate needs. rules, doesn’t need

to work for me.
For most good
Anticipate needs for tomorrow, for a week out and for a month out. Make subs, this is no
sure the materials needed tomorrow will be delivered on time, and that the needed problem. Many
subs will be there. Look ahead to subs and materials needed in the next week, and of the larger firms
I work with (e.g.
touch base with the necessary parties. Look ahead to completion dates and goals for grading, HVAC,
the next month and anticipate them. Inspections may be difficult to schedule and roofing) will send
require lead time. Once you have a date set for the next inspection, keep everyone me a bill and let
me pay in 30
informed of it and on schedule. days.
Have a “Plan A” and a “Plan B”. Alex Acree observed his framing carpenters I am on my 3rd
O-B project and
floundering and somewhat at a loss to handle the work after a few days. He provided have never had
them clear direction, but anticipated their possible failure on the job. He paid them a problem. If you
only for work completed and made calls to line up possible back-ups. The framers pay before the
work is done, you
walked off the job, but the back-up framer was on the site promptly. will have prob-
lems. It is human
nature; do you
5. Keep the site clean. work on the job
where there is a
A clean site is safer and more productive for everyone. Dispose of packing paycheck waiting
at the end of the
and scrap materials. Lay down scrap wood or crushed packing boxes for footpaths in week or do you
and out of the site. Sweep or vacuum dirt and sawdust regularly from the structure. finish up that job
Keep it free of water, snow or ice. you have been
meaning to get
around to, where
6. Meet inspectors on site. you have already
collected all the
money?
Be on site to meet your inspector for scheduled inspections. Many times Michael in Cave
the inspector will waive a problem item after a suitable explanation by the owner. Creek, AZ
Flagged items are easier to resolve if you have the chance to query the inspector about We finally signed
them on the spot. the loan paper-
work and our
draw schedule
7. Receive deliveries. goes like this,
Slab Draw 20%
Framing Draw
Make sure the deliveries are complete and accurate. Check that you are being 30%
charged accurate prices for each line item. If you were shopping for a pair of pants, Trim Draw 30%
you would be very concerned if the price came out to be $500 instead of $49.95. But Final Draw 20%
delivery invoices can be off by hundreds of dollars and often go unchecked. Also It is a tough way
check materials for quality. Reject what you don’t like such as crooked lumber or to go, but it is a
chipped cabinets. great rate and
it has been no
hassles with O-B.
8. Pay bills on the spot. Since I am doing
ICF with the slab,
You can pay subcontractor bills on the spot if you have been inspecting work footers, and walls
daily, if it meets your expectations fully, and there are no questions about its suit- all being poured
at once, I have
ability for follow-on work. However, you should withhold a portion of the fee. Many to finish the slab
builders hold back ten percent as a precaution until after the house is finished and a draw with no
Certificate of Occupancy is issued. If it needs to be inspected by the city or tested by money taken out
and work into
follow-on subs (as a sheetrocker needs to verify a framer’s work, for example) you can the framing draw
make a partial payment pending inspection if you are satisfied. before I can get a

% of money for it. 9. Observe the work.

I figure 100% of
the first and 60%
of the second is Generally, people work more carefully and meticulously if they are observed
where I will be and appreciated. Every aspect of the work seems to go better if you are close at
when I get my hand.
first monies. Until
then, we have a
second on our
occupied house
to get us through.
Why You Need to Be On Site
(One thing though,
I have to pay the The on-site tasks of an owner-builder are what management types would call
$35 inspection “non-trivial”. Owner-builders in our survey who had not read The O-B Book spent
every time I ask
them out.) an average of 533 hours in on-site management — a third more than those who read
the book. Still, you need to plan to be able to handle the commitment. If you have
I looked for a loan planned fully, you may be able to get satisfaction from a 400-hour effort. This means
like Ken where I
could get money at least three hours per working day, during working time, for a six-month period.
any time as long
as I had receipts The 500 hours I estimate do not include any trade work whatsoever. You
but it did not
happen. Since we must add to your management hours the time it will take you to do the trade work,
found out about and that too is non-trivial. (Survey average: 644 hours) For example, electric work
the second today took us 800 hours. For many O-B’s site time is a way of making up for failure to plan.
things have been
a lot less hectic. It can run to much more than 500 hours if you haven’t settled everything you pos-
Marc in Defuniak sibly can in advance, before you break ground.
Springs, FL
The first reason you need to spend so much time on site is to prevent disaster.
Sources Say
“Much of a An amazing number of things can go wrong, and will. Lack of communication is a
contractor’s job is common problem on a construction site. You must explain, explain, and explain.
human relations.” One couple in Florida took a vacation during construction and patiently told the
“If you cut down framing crew before they left that they wanted the family room to be six feet longer
trees yourself: Cut than the plans specified. When they returned they found the family room had been
them four feet from built six feet shorter than the plans specified.
the ground. The
bulldozer needs
a good piece of Some trades will not show up consistently or when promised. You have to
the tree to pull the keep after them to get the work done. In some cases, you will have to hunt them
roots out of the
soil.” down to get them to show up. You learn that even a written contract guarantees
nothing. Conscientious supervision gives much more assurance. You need to keep
“Trees to be saved after the subs, remove barriers, settle conflicts and prevent disasters through your
should be marked
with red tape supervision.
or ribbon. Also,
remind your exca- The second reason to spend time on site is to get a better house. Several O-B’s
vator to be careful
about knocking told me the more time they spent, the better they did. Like planning time, the more
the bark off of time you spend, the more money you save, the better the quality, and the more fea-
trees to be saved. tures you get.
This could kill
the tree or invite
wood-hungry You save money because of opportunities that come to your attention while
pests.” on site. As an eager O-B, I always offered to help the subs and to help the vendors
From The Com-
plete Guide To with deliveries. The concrete sub took me up on my offer, and allowed me to tie
Contracting Your reinforcing steel before the footings were poured. I benefitted in several ways from
Home the experience — I made sure the steel was tied more than code required, I reduced
(See page 263)
my footings bill by $400 in exchange for my efforts, and I kept track of delivered

concrete. When the amount of concrete for footings and foundations turned out to Sources Say
be much less than originally thought, the sub agreed to further reduce my invoice by “Make sure to
$450. check periodically
to be sure that all
the carpenters’
Quality improves in many ways because of your supervision. You make cer- walls are square.
tain that implementation of the house corresponds to its use. For example, since you It is easier to get
this wrong than
know how each room will be accessed you can ensure that light switches are placed you think. Stairs
on the correct side of doorways, and not blocked by open doors. You see that elec- and fireplaces
trical outlets and phone jacks are placed where they will be convenient to your use. are another
source of potential
You catch doorways that may interfere with planned stairs or windows that would problems. Check
interfere with future walls. them carefully for
squareness.”
From The Com-
In spite of your efforts at planning, your perspective on site is better than the plete Guide to
abstract visualizing you did during the planning stage. We caught a planned window Contracting Your
at an early stage and had it moved to a different wall to capture a beautiful mountain Home
(See page 263)
view — rather than a view into the neighbor’s upstairs bedroom.
Sources Say
You will get more extras, greater quality, and improved comfort out of your The Well-Built
House
house by your thoughtful time spent on site. Many opportunities present themselves provides sugges-
to add extras, conveniences and improvements, sometimes at no cost, if you are on tions on how to
site to seize them. You need to participate in the process while it is happening to care for lumber on
the site.
make a variety of small changes. Some of the opportunities we grabbed were: (See page 263)
•Stuffing insulation behind shower units and between rooms Forums

•Placing water lines under footings, rather than through walls My wife and I
may be moving
•Installing nailing blocks inside walls where needed along a lot faster
•Putting sleeves under walks and drives for future sprinkler pipes than I thought we
•Doubling sheetrock in rooms where quiet is important would. Received
an offer today,
•Moving access to crawl space to free up a pantry space one day after
•Installing electric outlets in floors where furniture would be placed away from Thanksgiving.
walls Buyer wants to
close December
•Using balusters instead of half-wall on bridge over family room to improve view 20. I am now
•Placing heating vent under tub and shower very nervous and
•Moving rocks from around property to foundation cavity to improve drainage having a lot of
anxiety. I thought
and facilitate landscaping I would have a
•Stuffing insulation into outside framing corners before covered over whole lot more
•Putting pesticide granules on sill plate behind walls time to study the
issue. We sat
•Pouring drives and walks early to keep mud out of structure down tonight and
•Sheetrocking portion of garage early to allow doors to be installed and house discussed seriously
to be secured making an offer
•Widening halls where door frames didn’t accommodate molding on the property. I
guess the first thing
•Creating a camping equipment shelf instead of a high uninterrupted wall in to do is lock in the
garage property and go
•Turning garage with high ceiling into sports court from there.
Tim in Dunlap, TN
•Creating electrical path from crawl space to attic for future wiring
•Adding heating and cooling vents in garage and crawl space Tim, take a deep
•Making sure fill dirt was compacted fully in areas where concrete was to be breath. Assess
your skills and
poured. strengths in con-
struction. My hus-

band and I were Consensus Breeds Creativity

in your situation
not so very long
ago. Our property How will you manage your subs?
sold much more
quickly than we
had anticipated.
For some, particularly those O-B’s with a construction background, the
We ended up temptation is to tell them what to do. Some general contractors are this way. They
pushing ourselves, “micromanage” people, telling them what to do in detail and the way to do it. For
but it was worth
it in the end. We
others, it seems safest to go with whatever the sub wants and does — a “laissez-faire”
did make some attitude.
mistakes, but we
learned valuable
lessons from them.
Remember your responsibilities as manager: Plan, Organize, Integrate, Mea-
Such as, always sure, and Motivate. The “integrate” is the coordinating of all the members of the
get a copy of the team, with their disparate needs and wants. Left to their own devices, the subs you
cover page for the
insurance for any
hire may get into each other’s way, damage each other’s work, and become hostile and
subcontractors you alienated.
hire. Always get
a list of references
for previous jobs.
Owner-builder Debbie Crosby describes a situation that arose on her proj-
Check out the job- ect:
site daily to make
sure progress is
being made. Are
“The plumber did not work well with others, and if something was in his way
the subs cleaning he would saw right through it. We might have seen these things if we visited the site
up the site daily? at midday. He sawed through some of the framing and a gas line also. I told him
We found out that
our problems were
the master tub was not level, and he busted a big hole in the drywall to level the
self-inflicted by not tub, and I said he would be responsible for repairing it, and he refused. I figured
keeping a close he made the hole, he should fix it — just one of the things you learn in kindergarten.
eye on the work
we farmed out.
I said I would retain part of his fee, he threatened a lawsuit, and I said, ‘see you in
court.’ He came back, apologized, and fixed the hole.”
You have an
ocean of friends
out there willing to
The best way to manage subs is to show them you respect their abilities and
pass along advice need their contribution. Some take responsibility well and can be given a lot of free-
and strategy to dom. Some need close attention. Where possible, I apply consultative and consensus
complete your
project.
styles of management.
Teresa in Martins-
ville, VA A consultative decision-making process is one in which the members of the
Sources Say team have been asked to provide their information and suggestions, but one member
The Well-Built — you — reserves the right to make the final decision. A consensus decision-making
House, though process is one in which the resolution is achieved only when all members of the
written by a
general contractor, team agree that it is the best possible decision given the available information. Every
acknowledges member has the authority to veto the decision until, in fact, each member has found
the owner-builder, it possible to agree on a solution.
mostly saying
he should be
prepared to be on After a 15-year career as a management consultant and 10 years as a manager,
site a lot, and that I believe you get the best cooperation from a team by a consensus approach where
he should be pre-
pared to mediate everyone, including yourself, has an equal say, and decisions are unanimous. I named
conflicts between my company after the concept. However, in a construction situation, the members of
subs. the team change rapidly, and you are the only common denominator over the course
(See page 263)
of the project, which suggests that you should reserve the right to decide.

One day I stood in the dirt in front of our partially finished structure and Sources Say
joined in a debate between my concrete man, who is a respected general contractor, “Provide a drive
my construction advisor, also a general, and the area’s largest interior door supplier. I area of #57
crushed run to
had to make a decision about hollow-core or solid-core doors for the house. All three avoid muddy
of them told me they had hollow-core doors in their houses. I wanted solid-core, areas.”
but it would cost $2,000 more. I relented and accepted the hollow-core doors, out of “Get a roll of poly
sheet to cover
respect for the three men. It turned out to be a poor decision, because my house is an materials.”
open design, and much more sound travels inside than in their houses. “Call local police
dept. and have
you site put on
Better to have used a consultative approach, thank them for their ideas and surveillance.”
say that I would get back to the vendor with a decision. The doors didn’t pan out per- From The Com-
fectly, but each of my helpers got the message that I respected their ideas, and many plete Guide to
Contracting Your
more ideas came from them after that day. Home
(See page 263)
Many of the writers who have tackled the subject of owner-building in the
Journal
past have minimized the need to be on site. Most of these are contractor-authors who Jason has been
have a natural resistance to being overseen. Most people want unlimited freedom in spending many
their behavior. You want a smooth project, a quality home, and the greatest possible long hours on the
property, super-
savings. These things don’t happen on their own. You need to manage your subs vising, learning,
consultatively to provide a good working environment wherein you will achieve all and answering
of your goals. questions. We
have quickly
learned that being
on-site is impera-
Clean Job Saves Five Percent tive, otherwise
subs don’t know
who to ask when
One of the unglamorous but valuable functions you can perform is to ensure they have ques-
a clean and organized job site. General contractor Matthew Rittmanic, an unusually tions, so they just
make executive
perceptive builder I interviewed, provides his reasoning for the claim that a clean job decisions. Baaad.
saves five percent of the cost of construction: It’s working out
well too because
Jason can be on
“When it’s clean, the sub has a better feel for the job, and gets in and out site, and if he
faster. It raises his standard of meticulousness, elevates the spirits of the team, fosters needs something
an atmosphere of cooperation and reduces rework. Missing supplies that might researched, he
can call me and I
cause delays in upcoming work are more readily apparent. The inspector likes it can look it up on
better and is more helpful. It streamlines the final bidding process for bids that get the Internet right
finalized during the course of the project like insulation, drywall, cabinets, floor away.
Cara in Orlando,
coverings, finish carpentry, and painting. There is a reduction of waste. Parts that FL
arrive early and are needed later like finish covers of all types and door and cabi-
Sources Say
net hardware are protected. Ultimately useful remnant specimens of shingles, tile, The Complete
carpet, hardwood, balusters, paints, and wallpaper are not damaged or lost.” Idiot’s Guide to
Building Your
Own Home
Construction experts say that 70% of the dust that will ever get into your describes typical
house is there when construction is finished. You can virtually eliminate that dust. inspection points
for a single-family
residence
We used scrap material and broken-down packing boxes laid down as walk- (See page 263)
ing paths to keep mud from being tracked into the structure at early stages. I placed
fresh bales of straw as steps into the house which helped brush work boots clean. At
an early point we had our sidewalks and drives poured, and kept them swept. We
used a shop vac to clean up sawdust and plaster dust. Before we painted and before

Forums the carpet was laid we even wet-mopped the floors. The result was a pleasant work
Do you have to environment and the peace of mind that our house was deep-cleaned before occu-
be present during pancy, not to mention the savings.
inspections?
Jacklyn in Hills-
dale, MI
No, you don´t

The Inspector Is Your Friend
have to be present
for inspections, but My advice is not to fight with your building inspector. Consider him a
I would suggest member of your team and check with him far in advance of the need. The building
that you always
are. There are a inspector’s job has historically been to protect future owners from unwise, unsafe
lot of questions building practices. You are the future owner, hence the inspector should be on your
or issues that can side. Likewise, you are on the inspector’s side because you want your house to be of
come up that can
cause you to fail the highest quality.
an inspection if
you are not there Nevertheless, conflicts can and do arise. O-B Jay Sevison described one situ-
to explain to the
inspector what is ation he had with his inspector:
going on. I only
have my final “He failed a wall on a nailing inspection three times. He failed it because
inspection to go
and never failed you are supposed to have screws and nails and there were only screws in the
a single inspec- sheetrock. I said screws were better, but he didn’t let it pass, even though I was the
tion throughout owner and contractor. His supervisor said it was a question of shear strength when
my whole build. I
was always there I called him. I replied you don’t need it on this inside wall. Persistence paid off for
and walked the me — the policy was changed, and I wound up with a different inspector.”
inspector through
everything. I could
see that I might I have heard inspectors denigrated many times by contractors and occasion-
have failed several ally by owner-builders. As in any trade, there are better and worse practitioners. And
times if I had not there may be personality conflicts. The inspector can help you and can make obser-
have been there
to answer the vations and suggestions you will get from no one else. It pays to cultivate the inspec-
inspector’s ques- tor even before the start of your project. Make it a point to be present whenever he
tions. performs an inspection.
Alvin in FL
It’s good to be When you meet with the inspector before groundbreaking, ask what he will
there for another be looking for, what inspections your city or county requires, and how to schedule
reason – It’s a
little-known secret, them. We had inspections of:
but 99% of the
time, the build- 1. Temporary electric
ing inspector IS
2. Footings
YOUR FRIEND.
It’s another set of 3. Underground plumbing
eyes, making sure 4. Shear walls
things are done 5. Framing and electrical, plumbing, HVAC rough-ins (“four-way” inspection)
right. 6. Insulation
As mentioned
7. Final electrical, plumbing, HVAC
above, being
there can answer One municipality described in Jim Hasenau’s book, Build Your Own Home:
questions for
him and make
A Guide for Subcontracting The Easy Way, required more than 30 inspections. When
things pass, but you meet with your inspector, check off the inspections from the “master list” on
also, you can get page 206 that you will be required to undergo.
feedback from the
inspector. Things
might be legal

You Can Get Independent Inspections and meet code,

but look sloppy, or
could have been
There is a class of inspectors known as independent construction inspectors done better. You
who can be of great help to you. These are paid professionals who represent your can then go back
to your sub (whom
interests in inspecting a house during the course of construction. Unlike city inspec- you’ve not paid in
tors, these specialists can be sued — they are liable for their opinions. full yet, hopefully)
and say “I don’t
like that this looks
For many owner-builders, the independent inspector may be the key to a like x; to be done
successful owner-built home. Consider using one if you are not knowledgeable about properly it really
all phases of construction. Their advice may be the key to admitting you to the fra- should be y” and
99% of the time,
ternity of construction privilege and greatly increased net worth. they will come fix
it to get that last
The independent inspectors I interviewed say they come out to inspect a 10%. Managed
right, it’s like
house under construction an average of ten times for an overall average fee of under having a paid
$1,300. Some come out as many as 20 times on a typical custom home. Most of them inspector review-
are former or retired contractors with a lifetime of experience in construction. They ing work.
know the business, they know the habits and culture of the industry, and they inspect Of course, many
not for city code, but for quality in construction techniques and material. building inspectors
don’t care...But if
managed right,
One independent inspector I interviewed, Beryl Ford, from Tulsa, Okla- the inspector can
homa, showed the tremendous detail that can be studied in an independent inspec- be excited about
tion. Ford is a “forensic inspector” who is often hired by insurance companies to your project, and
his work will be
investigate the causes and origins of structural failure in houses. He describes his better, too. He’s
approach to evaluating a composition shingle roof: used to dealing
with GC’s and
subs all day who
“You have to nail it right, nails in the right place, the right fasteners, in the right are trying to skate
pattern and quantity, or the warranty won’t be valid. Right pressure on nail gun, by on the cheap-
right angle and depth. Below the seal strip. If you have a material that deteriorates, est cra$ that they
can get away
they will not honor that warranty unless you meet the standards. If you don’t have with, as long as
the right deck to receive the shingles, if it’s not nailed properly, it will hump up. the finished prod-
Proper ventilation in attic space. One and a half feet of ventilation space for every uct ‘looks’ OK.
Here he’s working
100 square feet of space in the attic. Moisture migrates from the living space via on a project with
ducting over Jacuzzis, over cooking area, over laundry areas; it migrates to the someone who
attic, and if doesn’t discharge right it will condense and collect on the back sides of can be genuinely
interested in good
the shingles. On a hot day, the moisture is drawn through the shingles and deterio- work, and in his
rates the belting. In the winter, the moisture on the back will freeze and expand and opinion. YMMV.
destroy belting fibers. Environmental creep will eventually destroy it prematurely.
My building
You want 20 years of useful life on a 20-year warranty. Valleys should have a liner: inspector was
roll roofing with composition shingles, or metal with cedar shakes, clay tile, and great, and gener-
masonry types. If you use metal with composition shingles, due to differences in the ally never had
any problems. In
coefficient of expansion, it will slide. You’ll see wrinkles, humps, and hollows.” fact, he gave me
my CO without
The independent inspector can be a key to evaluating the performance of my kitchen sink
being installed
your subs and verifying that you have received what you are paying for. There are so (it was sitting on
many potential pitfalls in construction quality and technology, that I find the assis- the floor) because
tance of an independent inspector a relief and a bargain. They can answer your ques- he knew as an
O-B, I would finish
tions, make suggestions; even point out construction savings you have overlooked. my sink, and he
Their fee pays for itself quickly in promoting a smooth project, ensuring quality, and was happy with
in reduced replacement and operating costs. the quality of the

Inspections Checklist
Inspection Required ? Date Notes
Building
Footing open
Rods in footing
Grade
Ready for backfill
Floor joist
Before sub flooring is applied
Truss on ground
Rough framing
Sheathing
Lath
Final grade
Final
Electrical
Rough
Finish
Heating
Rough heat
Insulation
Final
Plumbing
Septic tank & field
Sewer
Inside drain
Shower pan
Rough plumbing
Water test
Well water test (in case of well)
Final
Concrete
Forms
Compaction
Rods or wire
Basement floor
Backfill
Forms outside (walks and drive)
Final
Other
Other
Notes

project. He failed Staying on Schedule

an HVAC termina-
tion, and I was
glad he did, I had It’s actually possible to build a house in one day. It has been done by Home
missed it. And he Builders Associations several times as a public relations event. They pour the con-
was hard on my
framers (what little
crete the week before and blitz the project on a Saturday with dozens of craftsmen.
framing I had) but Some general contractors routinely finish projects in under four months. But you
that was good, might not believe that when you are in the middle of your project. Schedule overruns
because after
he beat up my
are common for generals and for O-B’s. Occasionally a house project goes two years
framers for missing or more, despite the best intentions of the owner-builder.
some nails, they
spend a day
double/triple
If you have done detailed planning as suggested, you will not be far off, but
nailing, bracing, you may need a little encouragement during the construction phase. You should
pressure blocking. know your schedule by heart and what’s coming up. Know what week of the schedule
They went way
beyond what was
you are on by number. (“This is week seven. Where are the roofers?”) It’s not too
required, thanks to complicated. If you are building in six months, you are dealing with 26 weeks.
a good lashing by
the inspector.
John in Erie, CO
We adopted a tradition when we built our house of wearing different ball
caps every month of the schedule. We put on fresh ball caps on the first day of every
This may be a month and discarded them ceremoniously on the last day of the month. The next day
dumb question,
but which compo-
we started with new caps. The ball caps were easy to get because most construction
nents need to be materials vendors have logo caps they will give to their customers.
inspected? I don’t
see this docu-
mented anywhere.
Owner-builders report 30 “dead” work days on average where no subs set
Foundation, foot on their sites. Another 34 days are reported where only one sub was on site for
Framing, Electrical, at least part of the day. There is room for lots of improvement in staying on schedule.
Plumbing? etc.?
Ray
Follow the “call, call, call” procedure described in Chapters 10 and 13, and remember
the rules of thumb: replace a sub who fails to show three agreed times, or who doesn’t
When you pull a show within three days of an agreed time without other arrangements made.
permit from your
code department,
they will identify Staying on schedule is one of those things that takes your active manage-
what inspections ment. “It’s easy if you work it hard, but it’s hard if you work it easy.”
you need.
Kenneth in Lees
Summit, MO
I was hoping I
If You Do Self-Work — Control It
wouldn’t have to
wait that long. Is
there a standard Benefits and Trade-Offs
set of inspections
required for a new Occasionally I see a whimsical sign on the wall in a print shop or service
construction?
Ray provider’s office reading:
The exact inspec- “Do you want it good, fast, or cheap? Choose two.”
tions required
will vary based
on your local You want your house “good”, and as an owner-builder you likely are moti-
codes/inspectors vated by saving money (“cheap”). To get it built “fast” usually costs more. This is the
and your specific
house – Some problem with self-work on your house. For most of us who are inexperienced at the
houses will require trades and are juggling a house project with full-time employment, extensive self-
different inspec- work is prohibitive.
tions based on the
types of materials

The average owner-builder in our survey did four to five of the trades (4.8) or methods you
on his or her own project. The savings were very impressive, an average of $50,000 or are using. A safe
rule of thumb is to
62% off the quoted price for each trade. The O-B’s estimated 644 hours spent on 4.8 not cover anything
trades, which equals 134 hours per trade performed. until the inspector
has seen it. Here
is a rough list,
Elaine and I didn’t work nearly that fast. We are fairly dedicated at measur- not all of these
ing work hours, and we find that people often underestimate time spent. Our fast- are required in
est trade was ceramic tile work, which we accomplished in about 100 hours. This all places, and
keep in mind that
includes taking a class (twice), reading a couple of guides to tiling, shopping for tools in some locali-
and materials, doing the work, and clean-up. Our slowest trade was electric, which ties, inspection
took us 800 hours of work, as mentioned earlier. protocols might be
different.
Painting is an often underestimated trade which took us 650 hours of work, If I recall correctly,
the bulk of which was spent after we occupied the house. Painting is almost all prep I had the follow-
ing inspections.
work, and we sanded and patched and caulked until our fingertips literally bled. The (I’m also listing
woodwork in a custom colonial house is very extensive, and the gorgeous high gloss a few that didn’t
trim paints available today show off even tiny flaws. apply to me, but
are common in
my area, to give
Our fourth trade was landscaping, a 350-hour effort, performed after we you an idea)
occupied the house. O-B’s we interviewed had performed 25 different trades. The Many inspections
are sometimes
most popular were: performed at the
same time as
1. Painting other inspections,
2. Finish carpentry for example, the
building setback
3. Tile and Flooring
and footing
4. Electric inspections are
5. Plumbing performed at the
same time, and
occur on the same
For us, the trade work was a matter of economic necessity. We couldn’t fit the day as the wildfire
budget under the borrowing limit the bank imposed on us, and we had to cut back. hazard inspection,
In the relaxed environment before groundbreaking, self-work seemed like a nice way but the wildfire
hazard inspec-
to save money. It did extend the time of our house completion, by perhaps two frus- tion is a different
trating and anxious months. But it cannot be said that construction interest ate up inspector...
our savings because we saved about $6,500 average on each trade we did and spent -Open hole soil
inspection (post
only $2,500 of interest on the two months of delays. excavation),
Wildfire hazard,
In business, a decision like the one to do self-work is called a “make or buy” building setback/
location, footing
decision. A manufacturer can sometimes do better by allowing outside suppliers to width/reinforce-
provide some components rather than make them in-house. Factors like cost and ment (pre-pour)
capacity have to be weighed. Look at savings versus interest costs when you decide, -ICF or foundation
wall inspection,
and be realistic about the time it takes. I would urge you in any case to strive for pre-pour (This had
project completion in six months. to be done by
my engineer at
my expense, the
Rather than let self-work gobble up the calendar, make your self-work highly county inspectors
efficient. Recognize that it will take you from two to ten times as long as an active won’t inspect ICF
tradesman to do any trade. Utilize the Greenewalt Principle which states that “one over 8’ high).
-In-ground plumb-
month spent in planning will save from three to four in execution”. Plan your work ing inspection
thoroughly and manage your performance closely. -Electrical service
in-ground inspec-
tion, electrical ser-

vice temp power Risks, Dangers and Difficulties

inspection
-Radon Mitigation
inspection, footing In our city recently, an owner-builder died tragically while working alone
drain inspection late at night at the construction site. This man had kissed his wife good night and
(They didn’t care
to inspect the radi-
returned to his site at a late hour to put in a few more hours of work. On site were
ant piping in my typical stacks of sheetrock leaned against walls where they would be hung in a few
jurisdiction). days. The man was doing some work on hands and knees when a stack of sheetrock
Main level ICF
wall inspection
fell over on him, crushing him under its tremendous weight. His wife had gone to
(pre-pour) sleep at home, and didn’t notice his prolonged absence until dawn. His body was
Framing 4- discovered in the early morning.
way inspection
(Framing, HVAC,
Plumbing Rough, It saddens me very much that a courageous owner-builder would die trying
Electrical Rough) to build his house. It is a lonely occupation, and sometimes working alone is very
Weatherboard-
ing/Stucco Inspec-
risky. Fatigue can be a big factor, along with inexperience and the improper use of
tion, mid-roof tools. Many injuries and sometimes fatalities result.
inspection (getting
firedeck on roof
inspected before
We were surprised at our limitations when we began to do self-work. I began
covering with to set junction boxes for electrical outlets about one month into the project. I went
roofing) on hands and knees and used a hammer to pound in the boxes after sighting their
Insulation Inspec-
tion (spray foam
heights with a “story stick”. As I nailed in the first box, my knee began to ache with
walls and attic, throbbing pain. I had had knee surgery three months before and had thought I was
sealed attic. Oth- fine. I hurried out to buy knee pads, but continued to experience pain with each
erwise just walls
here, then attic is
kneeling task.
inspected at build-
ing final. Doing electrical work also involved climbing a tall scaffold to make connec-
Sheetrock/drywall
inspection Electri-
tions in vaulted ceilings over 20 feet from the floor. It was painful to climb the scaf-
cal Trim inspection fold. When I got up the first time, I discovered I had an almost paralyzing fear of the
Building Final height.
(Building overall,
fire doors, health/
safety, plumbing/ We all have some limitations in doing physical work, be it inexperience or
HVAC trim, roof, inefficiency. Allow for your limitations and for the unexpected, like bad weather,
etc. inspected
here).
illness, or injury when making your plans. You may find the work surprisingly com-
plex. Most household tasks involve a very few steps to completion. Construction
There are others. tasks can involve dozens of steps, posing a challenge to even the brightest among us.
Some jurisdictions
require mid-stucco
inspections, deck The world’s greatest chess players are able to envision as many as 30 moves
inspections (done ahead of the present move. Most normal people have trouble seeing beyond six or
at building final
here).
seven steps ahead. The result is frustration for a first-timer. I counted 30 steps to
John in Erie, CO complete a minor electrical task, installing a single duplex electrical outlet in the roof
soffit over the deck:
Thank you for the
detailed write-up.
It’s more involved Get tool belt, find an unused duplex outlet and cover, get ladder, look for
than I thought it safety glasses, clean safety glasses, get boom box, plug into next outlet, flip pos-
would be.
Ray
sible breakers until music stops on radio, mount ladder, test if power’s on, strip
sheath of Romex, strip ends of black and white wires, loop ends to fit around
Readers Say screws, place black wire under bronze screw and tighten, place white wire under
“When you start silver screw and tighten, place bare copper wire under green screw and tighten,
to do labor, every-
thing else stops.” push back into box, secure outlet with mounting screws, replace and attempt to
Lucy & Ivan B. screw in face plate, climb down, search for longer plate screws, remount ladder,
Provo, UT

screw in face plate, dismount ladder, reactivate power, mount ladder with boom Sources Say
box, plug in to see if music plays, put away boom box, tools, and ladder. “Resist the
temptation, even
on a big lot, to
This task took me about an hour. It can be unsatisfying and frustrating to bury the stumps
deal with the cumbersome steps in a complex task for members of our “instant grati- off in a corner
fication” generation. You must learn to be satisfied with a single step as an achieve- somewhere. This
extends the scar-
ment instead of an outcome as an achievement. ring on the land-
scape and usually
Another phenomenon that surprised me in doing unfamiliar self-work is makes later work
both necessary
called “the learning curve”. Initial attempts at tasks invariably took much longer and difficult. Truck-
than subsequent repetitions. For instance, installing the first recessed can light in the ing stumps away
family room ceiling took me two hours. The second took one hour, the third one- is preferable.”
half hour, the fourth took 17 minutes. All the rest took less than 15 minutes each. “It’s perfectly easy
When I taped over the first window unit before spray painting, it took two hours, the to do a quick-and-
second, 45 minutes, and eventually less than five minutes each. When sanding walls dirty backfill job
and have every-
with a pole sander, the first wall took 30 minutes, then 20, and on down. Each repeti- thing come out
tion was better than the last. looking good. The
owner, thinking
nothing is wrong,
Consider the learning curve when planning your work or if you get discour- is happy. The
aged. Your work will improve in quality and speed as you persist. builder, money in
hand and hoping
nothing goes
wrong, is happy.
Rules of Self-Work The architect most
likely wasn’t there
during backfill-
At first, unfamiliar work is a novelty, then it’s boring, and then, if you stay ing and doesn’t
with it, it becomes like a drug. You wonder how you can live without it. To para- know anything
was amiss. Two or
phrase Karl Marx, “Self-work is the opiate of the owner-builder”. three years later,
or maybe not
1. Be a good learner. Gather materials and organize your study of the task. until a particularly
Pay an expert for advice if appropriate. severe winter, the
wall may crack,
piers lift and tilt,
2. Plan the task in detail before you start. and the brick
steps slide away
3. Allow enough time overall. If you don’t have enough time, let someone else from the door.”
do it. From The Well-
Built House
(See page 263)
4. Don’t worry how long each step takes.
Sources Say
5. Redo something if you’re not satisfied. Your New House
lists key inspec-
tion points, six
6. Do one thing at a time. sources for finding
an independent
7. Use good materials. inspectors, and
questions to ask
8. Assemble all needed materials first. independent
inspectors.
(See page 263)
9. Use good tools.
10. Assemble all needed tools first.

Sources Say 11. Keep all tools in good condition, sharp, oiled, and operating well to pro-
“You might get mote quality and safety.
your dream home
and a year’s
income in equity 12. Do the important thing, the hard thing; don’t just stay busy.
just by devoting
an hour or two 13. Start early.
a day and some
weekends to 14. Keep at it until you’re done.
building your new
home, even if you
never pick up a 15. Pause to rethink your approach.
hammer.”
From Build Your 16. Keep the area clean.
Dream Home for
Less
(See page 263) 17. Work a full day and don’t leave your task.
Sources Say
“The best inspec- Accomplishments and Satisfactions
tors are retired
contractors or
licensed engineers
One of the satisfactions of doing self-work is that you constantly invent
with residential things when you build. I devised little paper circles I cut to trace a hole for a can light
construction above the front porch. I used a strap tie to hold up a heavy fluorescent can while I
experience. Such
individuals would
secured it on a high ceiling. I put a screw in the framing and hung my drill by a strap
be most likely to while my hands were busy with other tools working on a high ladder. A friend and
spot problems I struggled to make a stubborn electrical supply cable reach to the wall panel. We
with new construc-
tion. Many home
finally turned the rear panel mechanism upside down, and it reached. You get mean-
inspectors special- ing from solving constant problems and from constant striving.
ize in evaluating
older or resale
homes; their
You have to laugh at yourself and marvel that you ever finished any of the
cursory, “cosmetic” projects. Our electrical consultant checked our work after we finished wiring the
inspections would master bath. He studied the wiring quietly for some moments and said, “I was look-
not be appropri-
ate for a new
ing at this wiring, Mrs. Smith, and what you’ve got here is that two of these vanity
home construction lights will be on at all times regardless of the switch. And the fan light in the johnny
project.” room will only operate when the switch is thrown for the vanity lights in the main
From Your New
House
bathroom.”
(See page 263)
When I tour people through our house I enjoy pointing at the ceiling fan
The inspections
high above the family room and saying that Elaine installed that fan. We had a tall
checklist shown in
this chapter is also scaffold set up in the room and we both climbed up to put the fan in place. I stood up
available as a to screw in the mounting bracket and my knees began to shake from fear of heights.
template in our Elaine volunteered to take over, but at the very peak of the ceiling height, she too got
Free Download unsteady. So I sat down and hugged her legs and she worked with one hand while
Gallery firmly gripping my hair with the other. From such things are lasting satisfactions
made.

Sub Recognition Sources Say

Habitat for Human-
ity: How to Build
The last of your P.O.I.M.M. responsibilities as a manager is to “Motivate”. a House offers 14
You motivate your team from the very earliest point by respecting their opinions in tips called “Work-
ing Safely on a
interviews and in the bidding process. Throughout the job, it is your responsibility to Construction Site”
provide a work environment that motivates the team. and offers illus-
trated overviews
and tool tips for
Studies consistently show that respect and job challenge rank over wages as DIY of major house
trades.
motivators. You show respect for the subs by seeking their opinions and giving them (See page 263)
the deserved freedom to operate. Respect their needs for an orderly schedule and
clean work environment. Run a job where the subs can get in and out quickly. Little Sources Say
things like helping to unload material will facilitate this. The Complete
Idiot’s Guide to
Building Your Own
Inspect early and pay fast, which is a great sign of respect. If you ask them to Home
offers fifteen rules
do extras, be free with additional payment. Many things that you will want done are for job site safety
not clear on the plans or in bids. Pay for these promptly. One O-B who saved nearly and security and
40% on his project kept a $2,000 – $3,000 fund available in 50 and 100-dollar bills. another list of 30
rules for self-work
When the schedule slipped, he asked subsequent subs to put in extra hours or week- safety.
ends and offered them cash for the extra effort. He got amazing productivity. (See page 263)
Sources Say
Your subs may want to erect their signs at your site or use you as a referral “Don’t try to do
to get future business. Go to extra lengths to facilitate this for responsible subs. I too much of the
provided a word-processed letter of recommendation on my letterhead to several actual physical
work yourself. Your
without being asked. time and skills are
often better used
Some O-B’s buy lunch once a week, or have daily refreshments on site for managing the
job.”
the subs. Think of what you appreciate in a working environment and do likewise From The Com-
for your team. Two cautions: 1) Don’t allow alcoholic beverages on your site. Alcohol plete Guide to
and construction don’t mix. 2) Don’t get too “chummy” with the subs. Maintain an Contracting Your
Home
appropriate relationship of mutual respect. (See page 263)
Forums
You folks call
yourselves “owner-
builders”. That’s
fine with me, but
most of you don’t
build anything.
You pay other
people to build
it. You are really
“owner-GC”. That
probably makes
you more sane
than me, but it
leaves me with
a nomenclature
problem. It is not
just you guys.
Everybody calls
“owner-GC” by
the name “owner-
builder”.

What is the word for people who buy some land and want to build a house without paying anyone to do it for them? In
other words, what’s the official term for “owner/architect/GC/subcontractor/day laborer”? Surely I’m not the only one.
There must be some other idiots out there like me who own both some land and a hammer. What do they call them-
selves? Where can I find their forum?
I Googled owner-idiot, but didn’t find anything useful there.

Jeff in San Diego, CA
I think owner-builder is still the right term... I did a lot of work (see my other posts) myself, and it has tradeoffs. I was
owner/designer/gc/surveyor/foundation guy/hardwood guy/low-voltage wiring guy/tile guy/radiant heat guy/cellar
guy/deck guy/painter/garage door installer and a few other things. I hired excavation/blasting, framing, stucco, flatwork,
drywall, plumbing, electrical, vent. Doing a lot yourself is a BAD idea if you are borrowing funds, unless you are hiring
some people to work alongside you. It will burn you out, and you will very likely spend more in interest than you would
had you hired the work out. If you have a hoard of cash and can take time off from a real job, I can’t imagine anything
more rewarding.
Nevertheless, I really enjoyed doing a lot of the work myself. There is another thread (titled ‘Are there any REAL owner-
builders out there’) on this site that has a bunch of good insight on the advantages and pitfalls of doing it all yourself.
As far as nomenclature, I think it’s about as good as it can get. Kinda like ‘DIY’ can mean anything from you installed
some shelving you bought at Home Depot to you stacked and poured your entire ICF envelope.
Most of the hard-core owner/real builders I know (2) don’t even mess with the Internet. They know what they want, how
they are going to do it, and pretty much ignore the rest of the world. They are also building way off the beaten path,
which is probably a good reason to DIY most stuff, since labor costs skyrocket as you get away from populated areas.
Hope this helps a little, at least with the pointer to the other thread. Even real ‘Builders’ don’t build, they hire it all out too.
The folks who really can do it all are pretty rare, by either lack of skill, or the outright specialized nature of the tools and
experience needed to work with a lot of today’s building materials (not that they are all that exotic, but stucco, LV wiring,
roofing, insulation, HVAC, even electrical and plumbing to a lesser degree have all evolved a lot.)
John in Erie, CO
Maybe you should look out for forums entitled 1.) learning to pick your fights, or in your case, 2) ”I just enjoy the fight”. In
an ideal world most would love to say “I built this home”. But, in reality most of us don’t have that cushion of time, I once
was a finish carpenter (many years ago), and even the company that I worked for subbed most of the work out. But good
luck with your quest. I know I can do 80% on my house, but time is money ...that I don’t have.
Drue in Henderson, NV
Hi Drue, seems I inadvertently touched a nerve with you.
If I didn’t have a growing family, I would just get a smaller house and have no mortgage, but such is not to be. I also will
be lucky enough to have a flexible work from home job, so I can do a lot of work on my house instead of commuting. I
also plan on building my own house (see “My Construction Website”), though I imagine I will sub out some jobs, like
excavation, concrete, some electrical, and plumbing. Most projects that fall into this category will probably take too long,
require expensive one-use tools (for me), or be too expensive or dangerous to mess up for me to do myself. I will probably
do everything else myself, perhaps with a college kid general laborer to help me.
Dustin in Cedar City, UT
If I own the place and I am doing everything a builder would normally do...I’m an owner-builder. Builders don’t hammer
many nails either.
Zack
Hey Jeff, I do understand where you are coming from, I was a carpenter and joiner in England for 5 years for small
building firm that dealt with projects rather like the ones on these forums, as well as Banks and restaurants. I worked and
assisted all the trades because it was a small family contractor business. I love tools and labor work, but sometimes we
have no choice but to manage the project, and in my case that is very difficult to sit back and watch, knowing that with-
out my present job (not in any shape or form building), this project would not be possible.
Drue in Henderson, NV
I could do everything, but it would take three years of nights and weekends. I choose instead to do things that can be
done without slowing the progress. It’s great if you have the time but between designing the house, spec’ing windows,
appliances, cabinets, plumbing fixtures, HVAC, brick, trim, roofing, flooring, woodwork, doors, hardware, insulation,
paint, stain, caulk. Come back when you’ve done it and we’ll talk about it who’s a real “owner-builder”
Zack

Chapter 15: Mistakes You Can Avoid and
Forums
Well, my husband
Successes You Can Achieve

and I just had our
hole dug 3 days
ago. The foot-
ings guy, Doug,
was all ready to
Time line: Six months out get to work on
our project this
morning, when he
noticed that we
Mistakes might not be far
enough back on
D
the lot. He said
uring the course of our construction, I kept a notebook of mistakes we it had to be 40
made. Some of them were items that came out okay, but not as I’d hoped. feet back and we
For instance, the stairs in the garage step down straight out of the mudroom. were only 30 feet
back. We told
This was as originally planned, but it cuts a foot or two out of the basketball playing him that we had
surface in the garage. I wasn’t thinking too clearly the day they poured those, or I been informed
would have had them form a landing and turn to parallel the garage wall. that the setback
minimum on the
property was 30
After being in the house, we saw that the smoke alarms went off occasionally feet, and so that
from excess kitchen smoke. I decided that next time I would put a 200 cubic foot per is where we put
the house because
minute fan in the wall or ceiling to supplement the downdraft range. Then one day we wanted as
I mentioned it to an appliance repairman. He showed me that there was a removable much space in the
collar in the neck of the downdraft fan. We removed it, and have never had a smoke backyard as we
could get. Doug
problem since. Lots of little things work out eventually. said he knew
it was 40 feet

216 • Chapter 15: Mistakes You Can Avoid and Successes You Can Achieve
because the house Most of the mistakes were items that didn’t go smoothly — where the process
on the same side could be improved next time. My biggest were:
of the street as us
just 3 lots up had
the same problem, -relying on donated labor or the return of favors from volunteer helpers;
they had to have -waiting too long for subs who didn’t show;
some of the dig- -not hiring an electrical consultant soon enough;
ging redone. He
told us that there -allowing the consultant to do some actual work;
was an additional -paying some subs on a time and material basis without an advance esti-
10-foot easement mate;
for a sidewalk (first
time I have ever -allowing the plumber to supply some heavily marked up materials;
been told that a -Not having back-up subs where we thought we had a friend to work;
sidewalk will be -hiring some “no-goods” as subs because I got in a hurry when the first
going in). Needless
to say, he hurried choice (friend or volunteer) didn’t show;
on to another -not having a written agreement to protect me from the no-goods;
job, and we were -giving some subs too much payment before they were finished.
left sitting around
wondering what
we were going The owner-builders I interviewed cited five principal mistakes repeatedly:
to do to fix this
mess. The city says
that it’s common 1. Self-work problems.
knowledge that “My worst thing was painting the house. In the summer heat it was horrible
there are setbacks, and I will never do it again!” “Tried to do too much work myself. Next time I hire
and then there are
easements! I guess more subcontractors, and focus on what I do best, which is organization, screen-
it is not common ing subcontractors, shopping, and inspection.” “Took on too many things in the last
knowledge to all of stages of construction resulting in a traffic jam of delay and doing the most visible
us suckers out there
considering that elements of the house with rapidly declining funds.” “Rotozipping extra plastic from
the neighbors just window bucks, nearly lost my finger.”
up the street had
the same problem. 2. Insufficient planning.
I’m very frustrated
and upset. We “Concrete perimeter basement walls were too short and had to cut all interior
had our footings walls down.” “I should have started looking for someone to pour our driveway and
and foundation guy steps earlier than the last 7 weeks before we closed. In the middle of summer it’s
out today to get
things going and incredibly hard to get someone to even give you a bid for it. By waiting so long
done for us by the to get it done, it put our porch railing guys off and they ended up charging me an
end of the week additional $200 dollars to get the rail in only 2 days before our closing date.”
(we offered him
an additional cash
incentive for the 3. Not picking subs carefully.
work to be done “Didn’t wait for quality framers we had contracted with.” “I didn’t have a refer-
this week) because
our excavator will ence for the stucco guys I used, and just pulled them out of the phone book. They
be leaving town for took a long time and they left their equipment all over our lot for two weeks after
2 weeks following they finished.” “I had one subcontractor I didn’t check out completely as I was in
this Friday and
we wanted him to a hurry. This one caused me problems, and took me more time to fix than it would
finish with the fill have taken to check him out.”
dirt and everything
else before he left.
Believe me, I will
4. Not putting more things in writing.
never be stupid “I was too trusting. We paid people based on their draw, and when the
enough to make money ran out before the work, they wouldn’t finish. Next time, we will hold a
this mistake again.
LIVE AND LEARN.
higher retainage.” “Hiring people by the hour and paying them before comple-
Karlie in Ogden, tion.”
UT

Chapter 15: Mistakes You Can Avoid and Successes You Can Achieve • 217
Disasters Karlie, Don’t take

anyone’s word
for it. Run, don’t
Sometimes the mistakes lead to disasters. In my case, the mistake of hiring walk down to
dishonest carpenters led to a small disaster. I compounded the mistake by making city hall or the
township building
progress payments instead of one payment at completion. I then compounded that or whatever you
mistake by not having them sign a release of lien for the payments. The result was a have there and
lien on the house and a lawsuit — considerable aggravation. ask to see the
zoning require-
ments regarding
One owner-builder I interviewed made the same mistake of paying his fram- setbacks. Almost
ers weekly. He compounded the mistake by paying fully, not partially, on work done. all setbacks are
from the property
After receiving two payments, the framer didn’t show up for two weeks. When the line and do not
O-B hunted him down, the framer said “Go ahead and fire me”. He had nothing to include ease-
lose. ments. Good luck.
Tom in Strouds-
burg, PA
Another O-B made progress payments to his bricklayer. The bricklayer then
failed to show up for four weeks, or stopped in to do a little bit of work and left. When Karlie, sorry to
hear about your
challenged he asked for a payment three times as large, which the owner refused to troubles, but hope
pay. It turned out the bricklayers went out and spent the money each time getting you appreciate
drunk. The owner fired them but had no back-up plan, and it was very difficult to how remarkably
lucky you were. If
find a new bricklayer. you did make a
mistake in your set-
One O-B remembered to schedule all his inspections except the insula- back, you could
have poured a lot
tion inspection all municipalities make just before sheetrock goes on the walls. The of concrete before
inspector put him through the unwanted experience of tearing out sheetrock in sev- someone figured
eral locations around the house to expose the insulation for inspection. it out.
There was a
Sometimes the disasters are big ones. One O-B, who was in the Bobcat™ story in our local
equipment business, bought land in Florida that had been a dump and was very set- paper of a house
that was built to
tled. He used his equipment to level the land himself, and never got a survey to see if completion before
it was sitting at the right elevation. It was four feet below road level. Subsequent rain a similar problem
filled the lot up and went into the house. After experimenting with retaining walls was discovered.
The owners filed
they gave up and tore the place down. an appeal, but
lost. They weren’t
Several lenders told me about projects that got started and dragged on for O-B’s; they
contracted the job
years. One lender told me about two O-B houses he knew of that took over ten years out. The builder
to complete. Lenders also tell stories about people who start the house planning to has filed for bank-
save money by self-work, and get injured on the job. One of these got a hernia, one ruptcy, so he can’t
be held liable for
broke his back. The houses wound up costing much more than planned. the mistake. The
owners are left
In the “top this” category is a story from California about a couple that also with a choice of
pouring a new
failed to get a survey before breaking ground. They got the entire house finished foundation and
before they discovered it was on the wrong lot. I think that would ruin your whole moving the house
day. or selling the lot
for a huge loss.
Either way, it must
be financially and
Successes emotionally devas-
tating for them.
Remember Vince Miner, the college tennis coach mentioned in Chapter 1 You probably owe
who saved 52% on his construction costs? Doug a really nice

gift, or generous
bonus, for saving Vince Miner built a custom house some years ago for $145,500 that had eight
you from a similar bedrooms and four baths, amounting to 4,000 square feet. ($36.50/foot) He framed
fate.
it as a helper, helped pour all the flatwork, insulated it, and made sure everything
Doesn’t your was ready for each sub as they came along. The house appraised at $375,000 imme-
county require a diately, or about $94/foot when finished. (Allowing for land, a 52% savings.) He did
site plan? I had
to file a plan with the things he wanted — wide hallways and stairways, high ceilings, and lots of extra
the county that insulation. He has two feet of blown-in insulation over the ceiling. He didn’t bother
detailed every to install air conditioning; in that house, ceiling fans are adequate. His heating bills
setback for my
house. are negligible.
Hope you get He was required by the neighborhood CC&R committee (“Covenants, Con-
things straightened
out!! ditions, and Restrictions”) to put cedar shake shingles on the house, and he called
Jon in Ellicott City, around and found a supplier in Montana who trucked down a load of “short” shakes
MD at a discount that were more than adequate. These saved him $1,700. Many people
Jon, my husband were out of work at the time, and he got deals on subs. The roofer was in between
and I were VERY jobs and put the roof on for $42 a square. The tile sub was a student from the col-
grateful that lege where Vince taught. Vince never had anybody show up late on the schedule.
the foundation
contractor noticed The result was that he built the house in four months. One luxury was a professional
the problem, and estimator from a lumberyard who did his budgeting and scheduling, and found him
yes, we did have some deals, for a $5,000 fee. I have toured Miner’s house and was very impressed with
to give the city a
copy of our plot the workmanship. His savings are off the charts for a civilian owner-builder.
layout which did
include all of the Another house with even greater savings that I toured was that of a trades-
setbacks as we
had put them. man, a sheetrocker who owner-built a high-end custom house. His house is valued
That is why my in the $145 per finished foot range, but he built it for $86 a foot. He traded for all
husband is now the services he could and further reduced the out of pocket cost to $43 a foot. It took
trying to get a
hold of the build- some time to fulfill all the trades, but he occupied his home at a 70% cash savings.
ing inspector and
ask him that if our Another tradesman I know built a 3,800 square foot custom home for
plans were wrong
in the first place, $147,000 in construction costs ($39 a foot). He traded extensively to achieve this. I
then why did he have toured the two-year-old home of owner-builder Jay Sevison, the software man-
approve them!? ager mentioned earlier. It is an absolutely posh custom home built on an amazing $51
Of course, even
though the city per square foot budget.
told us we would
be getting a call I asked one naysaying lender who refuses to do owner-builder loans how his
from the inspector
today, he hasn’t past O-B loans came out. He said they typically went over budget but admitted their
called at all, and projects were done at a savings. I asked him to describe a successful project and he
when my husband described a woman owner-builder who came in right on her $257,000 construction
tried getting a
hold of the inspec- budget, ran a smooth project, and finished in eight months. Her secret to success?
tor himself, he was She had three written bids for each trade when she applied for the construction loan.
conveniently out of She didn’t work and ran the job full-time.
the office for the
whole day and
unreachable on One lender told me about a couple where the husband was an engineer and
his cell phone! the wife ran the job full-time. It went so smoothly they did another, and earned
We don’t want handsome profits. The woman got a license as a general contractor and now builds
to “fight” with the for a living.
inspector because
I’m sure if he
became upset

Several lenders described to me projects that saved 35% off estimated costs. with us enough
One lender in Alaska told me of a couple who saved 50%. A lender in Florida told he could make it
me that every owner-builder he has financed has moved in with a minimum of 20% very hard for us to
pass our inspec-
equity. tions or even to
schedule them
Success in residential construction is to come in on budget, on schedule and in the first place,
but if some of this
on specifications. For owner-builders, I would add: at a savings. As we go to press is his fault, then
with this edition, O-B’s in our survey report an average equity on completing a new something has to
house of $179,365. Interestingly, as O-B’s they bought land to build on, and land be done about it.
If we find out that
appreciation alone added about $20,000 to their savings on average. Factoring out we are not wholly
land, they saved an average of 36% on construction. To me, this disposes of the myth responsible for
that owner-builders can’t save money over using a general contractor. this, then we are
thinking of asking
the city to recoup
We did some things right on our house that we consider successes. One was some of the costs
the use of a spreadsheet budget. We got a lot of mileage out of the computer and fax to have our hole
dug again. Fat
capabilities that saved us money. We had a very clean job site and beautiful finished chance getting
product. We found some stellar subs and used very good material. We were able to the city to comply
upgrade many of the components to the very best available. We ran over our budget with something
like that though!
but got a satisfyingly overbuilt house. We saved 45% over contractor-estimated cost, I guess we’ll just
and with appreciation on our paid-for land, we had an overall equity of nearly 60% have to see how
in the property on completion. things go.
Karlie in Ogden,
UT
How to Score Yourself Tom, we looked

at the plat for
our land that we
were given when
Budget we had it under
contract. The way
they have our
The most important measure of your success as an owner-builder is how lot marked, and
much money you saved building your house according to specifications. You can everyone else’s
score yourself if you know what your construction costs are estimated to be by gen- for that matter,
clearly shows our
eral contractors in advance. Or you can take the appraised value of the house (minus property line right
land) immediately after you complete construction to compare it. Use the college up against the
system, and give yourself a letter grade: “D” if you beat the GC estimate by ten per- street we are off
(or in other words,
cent (a 1.0 grade point average), “C” if you beat the estimate by 20%, “B” if by 30%, it starts where the
and you get a 4.0 average, an “A”, if you beat the estimate by 40%. curb and gutter
are). There are no
other indications
In my case, the house was estimated at $106 a finished foot, which we cal- of an easement
culate at $115 to reflect landscaping, construction interest, window coverings, and or otherwise.
other items which builders usually do not include in their estimates. We built the Believe me, we
have studied and
house for about $63 a finished square foot, a savings of $52. studied that thing
over the past 24
hours. We are
Estimate: $115/ft. As-built: $63/ft. in the process
of trying to get
ahold of someone
Savings: $52/ft. Percent: 45% (preferably the
building inspector
who approved our
Grade: “A” plans) who will
talk with us about
the details of our

lot so we can Schedule

move forward as
soon as possible.
Karlie in Ogden, In order to compare apples to apples, let’s look at what it takes to build the
UT average American single-family home. The average home last year came in at 2,400
Karlie, The plat
finished square feet, according to the U.S. Census Bureau. The average time to com-
map won’t tell you plete for general contractor projects was six months, according to the National Asso-
setback require- ciation of Home Builders.
ments. The set-
back requirements
are usually part Let’s combine those two statistics (as we did in Chapter 10) and make one
of your zoning of our own. 2,400 square feet divided by 6 months to build equals 400 square feet
ordinances or stat-
utes. Mostly you
per month. (“F.P.M.”) This is the rate of production of the average general contrac-
need to read the tor. This is a fairly poky pace of building. Some builders in the NAHB study came
language of these out building homes at 878 feet per month by my calculation. But let’s use averages to
to find out what’s
going on. A lot
score owner-builders.
of places include
typical setback The average contractor-built home came in at 400 feet per month of build-
requirements with
the building permit
ing. To score myself, I calculate that my 3,500 finished square feet were built in eight
application. For months for a production rate of 438 feet per month:
example, if they
say they want a
50’ setback in the
front this means
they want 50’
Finished square feet: 3,500 square feet
from your property
line not 50’ plus
10’ or 20’ for
Months to complete: 8 months
easements. The
easements are
usually for utilities
“Feet per month”: 438 f.p.m.
and if the house is
set back 50’ there
is no interference National builder average: 400 f.p.m.
with their abil-
ity to install and
maintain these Percent over average: 10%
systems. Sounds
more to me like
the foundation Grade (“1.0”) “D”
guy wanted the
weekend off. My own score was an “A” for budget, and a “D” for schedule. Score yourself
Tom in Strouds-
burg, PA when your project is over. Let us know how you do. Visit us at OwnerBuilderBook.com
and start a journal or “blog” of your experiences.
Tom, when I
called the build-
ing inspector on
Monday to get If You are Married
some sort of guid-
ance as to what
was going on, he No report card tells the whole story of success. How your project affected
told me that the your personal life is not measured by grades on schedule and budget. There are
setback is from many stories about marriages and families suffering during home building projects.
our “property line”
which he said A common saying is: “A marriage that survives building a house will survive any-
is ten feet back thing.” One architect told me he contracts separately with both husband and wife in
from the curb case they divorce.
and gutter and
not from the curb
and gutter which


we thought all along was the property line. Even though the Owner-builders I interviewed
only thing written on our documented and approved permits acknowledged the stress, but often said that
was a setback limit of thirty feet in the front and the setbacks the project was ultimately a bonding experi-
for the sides and back, he told us that was only the setback
minimum, and that there was an easement of an additional ten ence. Some mentioned added closeness with
feet in front which he claimed was just common knowledge children who were involved in various ways in
(again, there was no mention of any additional setbacks or the undertaking. Elaine says that our project
“easements” on the approved permit except for the initial
thirty feet). We even turned in a plot layout as they specified brought us closer together and was very enjoy-
with all the setbacks on all four sides of the house as we had able. I think she has a short memory, but I am
prepared and drawn up. Why then did he approve the plans? grateful for her attitude.
All along we’ve been told by the developer and the city office,
thirty feet, thirty feet, thirty feet!!! Why would the inspector
then assume that we would just figure things out on our own? One O-B told me that he got so upset
I’ve never done this before, maybe I’m being stupid, and if at his wife when they were hashing out details
I’m wrong I’ll admit it, but some things just don’t seem to add
up! This happened to the house 3 lots up from us also and I that he left the car and walked all the way
believe they are using a builder who does this sort of thing all home from the job site (three miles) on several
the time. I can’t figure out how someone who builds houses for occasions. I have heard similar stories from
a living and is used to the ins and outs of building could make
the same mistake as someone like me who’s doing it all for the others who have built homes, with or without
first time! a contractor.
Karlie in Ogden, UT
Property line is property line. They are not allowed to interpret I remember yelling about something
the law as they see fit. It has to be written in the law. If you one day on the job site, and when the dust set-
don’t want to pay twice for work you probably have done tled looking around red-faced to notice that
right to begin with asking to see it in writing. Another option
is to call your lawyer, but I would do the footwork first and go we were in the middle of a busy neighborhood
from there. If you go to their office try getting the info from an in a house without doors or windows.
office clerk instead of the inspector himself. He is not likely to
be helpful if he is trying to defend himself. If they are unco-
operative, keep going up the food chain until you get to an The antidote to serious marital fric-
elected official. Again, good luck. tion in building a house is planning. As expe-
Tom in Stroudsburg, PA rienced owner-builder Jim Stark of Nebraska
The person I would call is your surveyor. My surveyor did the City, Nebraska (mentioned in Chapter 5) says:
plot plan, as required to pull my building permit. My surveyor “Building a house will stress any marital rela-
laid out the corners of the house, offsets, and excavation tionship. Making choices is a strain. We put
depths.
together a notebook of what it will look like
Your building code should not have been issued with a mis- before we even start. We get most of the argu-
take in the plans, and an inappropriate setback is an obvious ing out of the way. We take pictures as we plan
mistake (they would have caught that locally, but you aren’t
building here). However your surveyor should have known and turn it into an album. We use the album
better, and this is where the mistake first occurred. to develop specs.”
We had to put our house back 10’ further than we were
expecting, but we learned this when we got the plot plan Georgia Architect Robert Byington
back so it really wasn’t a surprise other than we cut down a adds: “If the marriage is not stable, don’t start.
tree we would have otherwise liked to keep and had to cut If you can decide on a plan, and become almost
down another that we wanted to keep. This is a common first-
time O-B mistake. concrete with that plan, you will succeed. Pre-
Kenneth in Lees Summit, MO planning is paramount. The average person
does not understand the effect of moving a
Karlie, if your local gov’t. is anything like ours, they won’t
assume any responsibility for having approved your plan. That wall three feet. Planning lessens the number
approval is simply permission to proceed with the project, not and complexity of the problems.”
an assurance that you’ve satisfied every aspect of the code.
Generally, they’ll help you out if they can, but the responsibil-
ity of knowing and satisfying the code is the builder’s, not the
inspector’s. At least, that’s the way it works around here. Hope-
fully, you’ll get this ironed out soon and get progress rolling
again. Good luck!!!
Jon in Ellicott City, MD

Sources Say
The Complete Guide to Contracting Your Home lists nine reasons construction projects fail, like underestimating costs.
Better Houses, Better Living illustrates hundreds of typical ‘user-unfriendly’ design mistakes and explains how to eliminate
them.
“If you have average organizational skills, you can be your own general contractor. If you have trade skills, you can
extend your equity by a considerable amount.”
From Build Your Dream Home for Less
(See page 263)
Journal
OK guys, I know this is gonna sound soooo lame, but I cried today when I went out to the property.
To see our dream – our hundreds of hours of planning, our attention to detail on every aspect of the house – become con-
crete (and wood, and glass...) is unbelievable. For those of you just starting out – hang in there! There is no feeling like the
one I had today, walking through the house, replete with wall and soffit framing now, and imagining. Remembering when
we thought of this closet or that window. Yes people, clearly I am emotionally attached now. And the coolest thing is that
I know there will be so many more of these “wow” moments each time some critical new aspect of the house comes into
being. When the drywall goes up. As the lighting is installed. When the kitchen is no longer a skeleton, but a gleaming
announcement that you have arrived in the heart of our home. And, finally, when we move in and it becomes our home.
Wow.
Enough cheese. The guys are gagging, or may have already quit reading, and even the women are thinking “ummm, is
she OKAY?!” On to the stuff you are interested in...
Cara in Orlando, FL
Journal
ICF is going along nicely as usual.
I found my first two Oops’s.

1. The roof is drawn incorrectly on the plans...there’s really nothing I can do about this one. It’s my fault...it’s just nobody
caught it in time. My SIP panels are already formed, but if you look at the pictures (see link above), I raised the ICF wall in
two places to try to compensate.
2. I forgot to increase the garage door height to 9’. (Subsequent edit:) Realized while out on site that I had increased it
from 7’ to 8’. I’m drinking tonight to try to decrease the evil thoughts that keep making me think I’m screwing everything
up.
Arnold in Colorado Springs, CO
Jon, it’s true, the city isn’t assuming responsibility over anything, and we decided that instead of fight with them over this
and delay the project another couple of weeks, that we could just do our best and move on. Our excavator came out
yesterday and dug the extra 10 feet out on the backside of the house. He charged us an extra $350 for the rework
which with the initial cost of the dig at $500 only brought us to a total of $850. With the charge for the rework added,
our excavator was still less expensive for the digging of the hole than the minimum $1,000 on all of our other bids. Our
footings guy showed up early this morning and by this afternoon they were pouring the cement even though at that point
the rain was starting to come down heavily. I’m just glad to see that we are moving forward again. I hope that at least for
a few weeks (?) we won’t have any major problems!
Karlie in Ogden, UT
Forums
Is it me, or are my wife and I just going through a difficult time? I love our new (uncompleted) home. But at the same time I
am totally sick of it. It is like a millstone around my neck. And my wife and I bicker more than we ever have. We will finish
it. But this is a heck of a load to take on. Let’s see...I now have blurred vision, high blood pressure, bronchitis and am
short-tempered with the people I am building this house for. I would love to hear your comments as to how this affected
your marriage/sex life/job/health/attitude.
Joe in Elkhart, IN
What’s the good of a home if you can’t enjoy building it for the people you love? When you decided to tackle the job
yourself, you knew it wasn’t going to be easy yet you took the task. IMO, there’s no appreciation in the things you do if
you don’t lose sleep or have headaches over what you’re building. It’s normal for people to go through what you’re going
through. No one is immune from the frustration of building a home yourself. However, you should never place a home
ABOVE your marriage no matter how frustrating the process is.

If anything you should take care of first, take care of your marriage. You home doesn’t breathe or have feeling, but your
wife and kids do. My 2 cents. Jim
Txhim in WI
Thanks for the tip. I’m trying to hand this over to God. I can deal with it, but sometimes it frustrates me that I am there on a
Sunday night, sweeping up, while she is at home reading to her daughter. I guess I didn’t expect $75K in equity to come
easily. But it is a big headache. It keeps me up at night worrying about people breaking in and stealing all my tools, etc.
Or the wasted five yards of concrete. Or not hitting lumber at it’s lowest. Or subs lying to me. Or selling the house we are
in now. Or worse yet, money. I’m over budget on framing due to ICF, but under on plumbing, heating, and electric. I went
overboard with the master bath. Glass block/marble shower and deluxe soaker slipper tub. In-ceiling speakers. Concrete
kitchen countertop. Faucets. We will be over budget. I am hoping a bit less than 10%.
Joe in Elkhart, IN
Joe, sometimes it’s better to take 2 steps back than 2 steps forward. I’ve heard too many marriages being destroyed in the
process of building a new house, because they placed everything above their marriage. This, I will NEVER do to my own.
You sound like a spiritual man with a loving family and that’s a good thing. The greatest reward awaiting you is NOT so
much your NEW HOME being completed, but the LOVE of your family that is still there when the house is completed.
And to enjoy it with them is the GREATEST REWARD. Good luck on the house. Jim
Txhim in WI
Hi Joe, remember: you and your wife are a TEAM! Right? Maybe the fact that she IS at home reading to the kid(s) is
allowing you to be at the site doing some work. At least that’s how it is for my husband and me. Sometimes I get frus-
trated with him because I never get to contribute in actual hands-on as much as he, because I’m the one home with the
kids 95% of the time in order to allow him to be doing the physical work on the project(s). Just a thought.
Remember to appreciate each other. It gets hard sometimes when you feel you’re working so hard to do something for
those you love and it’s a struggle. Hopefully you can find an evening when you won’t have to be at the site so you can
spend time with wife/family and all show appreciation for each other! “This too, shall pass.” As my mama always says.
Good Luck!
Michelle in KS
Early in the decision process about building a house, I was given some advice that really did not sink in until we really got
busy. That advice was “REMEMBER, THE HOUSE IS NOT YOUR RELATIONSHIP”.
We still have our good days and not so good ones but the important thought is the relationship is more important than
the house. We are planning a vacation for the whole family at the end of construction, sort of as a reward for surviving it
together.
Ralph in Wellington, CO
We are in the early building stages after a year of planning, and I do wake up in the middle of the night at times with
worry. I hope I will get into the swing of things as we move along. I used to complain that I was doing all the work and
making all the decisions while my husband worked and played golf off in la-la land somewhere. Now I realize that this
project is better as a one-man job. I can’t wait around for him to investigate with me, or approve of the decisions I have
to make on the spot every day. Thankfully, he is pretty much keeping out of my way. I have told him that if he has any
aspects that he must have, just let me know way ahead of time, and I’ll work that into the plan.
Building the house is fun. My stress is not having enough hours in the day to do all I want to. There always will be a
‘better deal’ around the corner, but you have to just do the best you can as you go along, and NOT LOOK BACK!! :-)
Betsy in Midlothian, VA
Thank you for starting this thread. I am also at the early stages of stress planning/bids/selling current home)! Everyone’s
advice is helpful and I have to keep reminding myself to calm down and take a look at my family. Please keep this thread
going. All of you are indirectly encouraging and keeping me focused on what is important. Thanks, Jessica
Jessica in Midlothian, TX
I’m glad I started this one. I was feeling pretty low. Wife and I went out to a Builder’s Showcase of houses last weekend.
Looked at a lot of houses between $250-300K. None of them, not ONE was as nice and neat as what we are building.
That was a psychological turning point for me. We didn’t see any tile, claw foot slipper tub, glass block walk in shower,
concrete countertops, ICF construction, private deck, walk-out basement, basement steps from garage, central vacuum
system, whole house audio, network wiring or any of the other amenities we have built in. Are we going over budget?
You bet. By about 8 or 9%. But we even looked at $450K houses and we still didn’t see any of that stuff, just a bigger
house. Has this been a huge hassle? YOU BET. If this doesn’t kill me then I think it’s worth it. I would probably do a few
things differently, but so far seems worth it. Drywall is going up today, along with backfill and septic.
Joe in Elkhart, IN

OK, first of all you need to look at your project as a series of small steps to complete, ultimately arriving at the final one.
Take a look at your schedule and contractors – see what is coming up in the near future. Prioritize. Fix any gaps in your
schedule. Don’t worry about 3 months from now or whether or not someone isn’t going to show up next week. There
is only so much control and certainty you can have in building a home. Everyone runs into glitches along the way but
anything can be fixed, corrected or handled to get you back on track.
John in Clarkston, MI
Just after the basement and 1st floor framing was complete, the storage shed of my lumber company burned to the ground
with a million dollars worth of lumber along with it. They think from a ‘hot’ plywood delivery. They are tap dancing like
crazy to replace the lumber and fill orders. I am driving my pick-up to other lumberyards and getting material they don’t
have. So far, only a couple days lost on material, and the subs are finding ways to work around the situation. No one
has left the job!
This is a business that comes with many headaches. I’m a control freak, so many lessons are being learned, and I’ll be a
better person when it’s done. This is an adventure, and I’m meeting lots of characters along the way.
We will be moving into our house this weekend. After 7 months of hard work, lost sleep, money crunches, etc. This last
month has been the most stressful. We had a couple of big curve balls thrown at us right at the end and it proved to be
very stressful.
We have a 2 year old, we both have full-time jobs, and we too have had the “discussions” over who is doing what and
the other one feels like they are doing more. My husband did most of the hands-on things while I kept our current house
going (groceries, bills, shopping, cooking, cleaning, etc.) and made most of the phone calls. It is important to take time
to thank each other for their work – sometimes that is all that your spouse will need – that small gesture when they have
had a terrible day! And if there is a fight, you may have to be the first to apologize – there is a lot of give and take when
building a house. Compromise, compromise, compromise!!!
Towards the end I would make my to do list in the morning, go over it with my husband, and then tell myself “We are
going to get through this day and then we will worry about tomorrow or next week later”. Take one thing at a time, plan,
and TRY to stay organized. The end will be here before you know it!
Heather in Baton Rouge, LA
Thanks for starting this thread. I have heard many warnings about this area and it has worried me a bit. We are in the
planning phase and I will try my hardest to work out as much detail/planning in advance to save from headache later.
But I am planning on stressful days ahead and will leave that up to God because you can only do so much, right? I want
to daily give my building project over to God and just hope/pray for the best. I know attitude is a big factor for us, my
husband is a pessimist and I am the optimist. This should be fun, lol. Count it all joy right? Many people have told me if
your marriage can survive building house together you can survive anything. Glad to hear things are getting less stressful
and more rewarding.
Mrs. Owner-Builder in Nw, WA
Anyone who is going to take on a project this large needs to be prepared to spend lots of time and energy. Turning it
over to any entity and hoping for the best is bound to cause problems. Ask for strength...pray for guidance, but, certainly,
don’t count on any outside source to take care of things. Learn what you can ahead of time, and be prepared to drop
back and punt; you will find you need to be flexible. As every sub so far has told me, “building a house is NOT an exact
science.” Some aspects look very different on the plans than they do in reality, and things will require alteration every step
of the way. It IS an adventure...and certainly will have it’s rewards. Getting stressed out will not help. There are very few
things that may happen that can’t be fixed, as long as you are on top of things. Good luck.
Marriages can survive building a house, but only if you are prepared to make some serious discussions and compromise
a part of the process. I have been doing this kind of stuff for others (designing or building for 20+ years) and have had
only three couples split because of the process. What I unexpectedly found was that the design process is sometimes
worse than the construction process. The reason is the design is a very emotional, wants, dreams and reality check issues.
Construction is just working a plan and scheduling details. Too often the reality of designing a home involves things that
you will never encounter buying a used home or a new pre-built (or tract) home.
Dale in Tucson, AZ
The “Ten Commandments” shown in this chapter have been expanded into a series of DVDs.
(See page 268)

Sources Say
MEN DO ASK DIRECTIONS
Home Improvement Survey Shows Differences Between Sexes
Money Pit News Bureau – While homeowners turn to home improvement television more for entertainment than educa-
tion, they tune into home improvement radio for project advice, tips and product information.
Tom Kraeutler and Debby Robinson know this better than anyone. The expert team hosts The Money Pit, a nationally
syndicated home improvement radio show that fields hundreds of calls on home improvement hang-ups each week.
Robinson and Kraeutler recently teamed up with Fred Miller, President of Consumer Specialists, and Managing Director of
the Home Improvement Research Institute (HIRI), to determine the most common problems and projects home improvement
minded consumers wanted to tackle.
By analyzing detailed records of almost 2,000 listener calls and emails to the program over the last two years, Miller’s
team was able to determine the most common problems and projects consumers were concerned about. Among the find-
ings:
Men were one and a half times more likely than women to ask how to do a project, perhaps proving that men will ask
for directions. Women, on the other hand, were four times more likely than men to call and ask how to fix a project gone
wrong.
Women were twice as likely as men to use email to ask a home improvement question.
Men were more likely than women to contact the show to get help with a home improvement problem.
Women were over twice as likely to ask a safety question then were men.
Almost 80% of consumers with home improvement questions want to know how to do a project, solve a problem, find a
product or clean something.
The top 10 projects consumers have questions about were: Floor Coverings, Plumbing, Windows/Siding, Kitchen/Bath,
Walls/Ceilings, Heating/Air Conditioning, Roofing, Bugs, Pests & Rodents, Indoor Air Quality/Mold; and finally Base-
ments/Crawlspaces.
“We were able to determine who calls, what problems they want to talk about and what projects they want to do,”
explains Miller. “For example, we determined that almost 80 percent of the show’s audience wants to know how to fix a
problem, do a project, find a product or clean something. We also learned how consumer questions can vary by gender
and by geography. And by comparing emails to calls; we even know how they prefer to ask those questions,” he said.
Kraeutler says that callers to the program are looking for easy to understand answers for home repair projects and 14
percent of those reaching out to the show did so purely to get a product recommendation from the expert team. “They
are often confused by advertising claims and turn to us for independent guidance on the right products, economical ways
to complete their projects, new ideas – and even to prevent them from getting in over their heads,” he says. Surprisingly,
more men (63 percent) than women (37 percent) contact the show to ask questions and they do so in disproportionate
numbers to the actual audience makeup. “We know that 46 percent of our audience is women yet they only account for
37 percent of those who contact the show. It may be that while women are playing an increasingly major role in home
improvement, they still may be somewhat more reluctant than men to reach out for help,” says Kraeutler.
Women Seek Help Fixing Problem Projects

When it comes to who’s calling for advice on “how to do a project,” the study showed that men are one-and-a-half times
more likely to pick up the phone to ask for help. However, when it comes to calling to ask how to “fix a project gone
wrong,” women are four times more likely to ask that question. “It sounds like men will ask for directions but that doesn’t
necessarily mean they’ll get it right,” says Robinson And, the team learned that while men don’t seem to mind calling to
ask a question, women are twice as likely as men to email their question.
The data shows key topics on women’s home improvement list are plumbing, kitchens/bath, roofing, bugs, pests/rodents,
indoor air quality/mold, basements and crawlspaces, and painting and wallpapering. Men prefer to talk about floor
coverings, windows/siding, foundations, insulation/ventilation; and decks. “In our industry more than half of all home
improvement dollars are spent by women,” says Robinson. “While it might not surprise you to learn that women show
more interest than men do in kitchen/bath or painting/wallpapering topics, even we were surprised by how many more
roofing questions came from women than men.”
Where listeners live also has a huge impact on their concerns. Consumers in the South were far more interested in doing
projects themselves than those in the Northeast. Floor coverings were a big concern for those in the Midwest, heating and
air conditioning was a unusually high level concern for those in the South and West, and Northeastern consumers, who
must batten the hatches for winter, were very concerned about issues like indoor air quality and mold. ”This has been a
fascinating project for us,” says Kraeutler. “It’s just like tearing open the walls of a house. Once you get inside, you never
know what you might find.”
©The Money Pit® – The Money Pit is a nationally syndicated live call-in home improvement radio show, hosted by vet-
eran broadcasters Tom Kraeutler and Debby Robinson. For more information go to moneypit.com.

Chapter 16: If You Decide to Use a Contractor
Sources Say
Your New House
gives 13 questions
to ask a general
contractor before
There Are a Lot of Reasons to Use a General using him.
(See page 263)
A
n experienced construction lender whom I admire puts his loan applicants Journal
through hoops to make sure they are prepared to begin building. He insists Signed contract and
agreed the construc-
on thorough preparation and a commitment to the time-gobbling process tion starts on May
of on-site supervision. If the candidate can’t make the commitment, he steers them 15, and ends by
to the use of a general contractor. 65% of his O-B candidates wind up going with Nov. 15. Any day
later than promised,
a general. contractor will be
charged at $300 per
Perhaps you are in the category of the 65% who intend to owner-build day.
Hugh in Irvine, CA
but acknowledge that they can’t make the commitment to succeed. It involves too
much time or disruption. You may be under a tax or land contract deadline that Sources Say
impels you to move more quickly than you can prepare properly. “The Complete Idiot’s
Guide to Building
Your Own Home”
It helps to be honest with yourself. You know the facts. You can save a great includes a chapter on
deal of money, but only if you conscientiously take the steps needed to effect the how to hire a contrac-
tor; sample contract,
savings. You know the time commitment involved. You know the tasks involved change order form,
and can make an informed and mature choice. and GC interview
questions.
(See page 263)

228 • Chapter 16: If You Decide to Use a Contractor
O-B Connections You may want to go through a contractor-built process before

Hi Mark, I had a builder give attempting to solo. Like me, you don’t want to do something halfway.
me a price from my plans. I Life is long — there are many chances to implement your growing
signed his contract. He has not
started construction yet and the knowledge.
contract has no start date or
completion date. How would I For many people personal time is scarce, and realistically, there
go about firing him? He hasn’t
done anything yet. I filed the is a good-sized part of the public for whom money is more abundant
permit with the city, I hired than time. You may be in the happy circumstance of being able to afford
the surveyor and he is just not all the house you want to build, general contractor notwithstanding.
reliable. Do I owe him anything
since I signed the contract?
Jeff in Hampton, VA
I’m copying my response to

How to Hire a General
Jeff Lewis, our webmaster, and
experienced owner-builder, so You may choose to dedicate the limited time you have to do
he can comment too. I think a thorough job of hiring a general contractor. You have a good deal of
you can walk away, but it may
depend on the language of knowledge of the “system” from reading this book, and you won’t go
your contract. You can run it by into this process naively. Like the steps in the owner-builder process, you
an attorney in a no-cost initial need to be organized and tenacious to get what you want.
consultation (call and ask for
one). You could do this with
several attorneys until you see a Start by interviewing possible general contractors. Don’t invite
clear picture. them to give you a sales pitch yet, just interview them as “background”
All the best, Mark
before deciding what to do. Use the subcontractor interview form on
Standard “I am not a lawyer” page 89 as a guide and add other concerns you have to the interview. Be
disclaimer, but I would be professional about this — much is at stake. Follow the suggestions in
surprised if the contract doesn’t
tell you what you need to do Chapter 7 for a well-documented interview. If you go to the trouble of
to cancel it. Usually it would interviewing many generals, say six to ten, with the same form, a picture
be just written notice XX days will emerge of their differences and your preferences.
prior to start. Since there isn’t a
start date, I’d say the sooner the
better. Select the generals from whom you will solicit bids. Follow the
guidelines in Chapter 3 for a detailed bid from a general. You will supply
It wouldn’t hurt to have a lawyer
look at it though. Hope every- written descriptions and specifications along with your plans to elicit
thing goes well for you! a detailed bid. The generals will supply line-item pricing and a written
Jeff in Provo, UT schedule.
Thanks Jeff, for your response.
I don’t want him to build our You don’t want any of the many contractual disasters that owners
dream home which is over half have endured with their generals. Thus you will ask for the keys to a thor-
a million, but he is trying to get
something out of it. To be fair ough evaluation of your builder from a financial and legal standpoint:
I asked him how much time he
spent preparing his estimate for • Evidence of workmen’s compensation insurance.
me. He came back and said it
• Evidence of liability and builder’s risk insurance.
was recommended that he ask
for 10% of the first draw and he • Evidence of performance and completion bondability.
would walk away. I think he is • Identities of the likely subcontractors.
nuts. He wants me to pay him • References of three most recent customers.
$6,500 just because he is not • Recent credit report.
getting $65,000 that he was
banking on. He almost never
• Three trade references.
meets his deadlines and I just • Bank reference.
didn’t want to deal with that • Copy of state contractor’s license.
through the course of construc- • Terms of House Warranty.
tion. All through the process of
trying to sever our relationship

Chapter 16: If You Decide to Use a Contractor • 229
Experienced California construction lender Jan McClary explains: he continued to

say “I’d like to
“Hire an experienced contractor. Check their license. Do they have workmen’s build your house”.
$65,000 is a
compensation and liability insurance? He’s responsible to make sure that every sub lot of money. He
has the insurance, and that the policies name the owner as additionally insured. never acknowl-
Two years down the line, the neighbor comes over and says, ‘your contractor did edged my wants
this to my property, and it will cost $20,000 to fix’. If the owner has the certificate or needs. I see
of insurance naming the owner as additionally insured, (and the bank, too) then, him as a contrac-
tor, not a builder.
even if the contractor is out of business, it will be covered. He has to make sure that I’ll keep you
every sub has the worker’s compensation and general liability insurance naming posted and when
the owner and certificate holder as additionally insured. Require a performance we finally get
and completion bond. Check out him and his documentation. Credit report, three started I’ll use the
references, two trades, bank and license boards. Have a consultant review the Forums and log
my progress.
cost breakdown and the general contract, and check out the insurance.” Jeff
Take the time to check the references you get and to record your findings. Forums
Ask past customers of the general: Did you have problems? Did he service problems I currently live in
the suburbs of
promptly even after you occupied? How long have you been in, and what kind of Washington DC
problems have you had? What was it estimated for, and what did you wind up paying in the eastern
for it? How were relations during the project? Was your move-in date met? Panhandle of WV.
My wife and I
have been looking
If the references have been in their homes for a long time, the contractor at contractors to
didn’t give you the three most recent like you asked. He may have given you a his build a home for
friend or relative. Pass over that contractor, or get fresh references from him and try us and we have
been running into
again. all kinds of crazy
pricing.
We consulted with
Who’s Got the Risk? a very established
Realtor® who
There are several contractual arrangements under which homes can be built informed us that
by general contractors. The first and most well-known is the contract bid. 90% of all a well-built home
would run us from
custom residential construction is contracted this way. The general tells you the price $100-$130/sq
and signs a contract saying he won’t go over it. Theoretically, there is a risk for the ft. So we were
builder that it will cost him more than what he has agreed and he will lose money. planning on this
amount. We
approached three
But what is the reality of the situation? Here’s a multiple choice question: different contrac-
tors to bid out our
If the budget starts to go over, the builder is likely to: home. It was a
1-story home with
1,880 sq ft. Here
a. Shop for bargains. are the prices that
b. Cut corners. we got:
c. Hit you with change orders. 1. $167 sq ft
2. $176 sq ft
d. Take a loss. 3. $187 sq ft
(Answer: He will resist a and d. If you resist c, he will go to b, whether you know it or not.)
This seems way
Generally the risk returns to you in any of the major contract formats, but off from what
there are differences: our Realtor®
had informed us.
So we are now
You decide what you want for yourself. You are under no obligation to accept exploring the
a contract bid arrangement from a general. You are in the driver’s seat and you call possibilities of an
the shots, even if it takes passing over several builders until you find the one you can owner-built home.
Are huge savings
work with.

possible in this
case? Are these Major Construction Contract Types
prices way out of
whack?
Aaron in Bunker Owner-Builder Fixed Fee Cost-Plus Contract Bid
Hill, WV
Description: No contractor You hire and buy. He hires and He just charges
Costs may be You pay a fee to buys. You pay you the agreed
higher than you contractor. a percent of amount.
realize. The costs costs as fee to
per square foot
can vary widely
contractor.
based on finishes, Risk: Yours Mostly yours, Mostly yours Mostly his
locations, and
labor costs. Your reduced techni-
numbers would cal.
not be out of line
for my area. Quality of High High High Low
House:
I forgot our exact
costs (I’ve prob- Savings: High High Medium Low
ably posted them
if you search the Control: High Medium Medium Low
forums on this site),
but I think it was
around $150 psf, In any case, it is good to permit the builders to estimate your project in the
but that included normal way, where they estimate the costs in a contract bid. With cost estimates in
my utilities, which hand, you can reflect on the best way to proceed.
amounted to
several tens of
thousands for You could turn to a cost-plus arrangement where you pay the costs directly
my location. It for the subs and materials used. If the costs come out to $500,000 and you have
appraised for
around $250 psf. agreed to a ten percent fee, you pay $50,000 to the contractor at the end. Review the
discussion on cost-plus in Chapter 3 to understand why this is not a high savings
Some folks here approach.
are able to do it
for very low costs
per square foot, Fixed fee, however, is a winner if you handle it right. Without specifying
either because fixed fee you can entertain the bids of several good generals. You can then negotiate
they do a lot them-
selves, or because with your preferred general. With his estimated costs in hand you can ask how much
they have lower- profit he will make on the job. The answer will come back as 10%, 15%, or some
cost markets number that is certainly negotiable. Ask, “Then to build this house with a ten percent
where labor is
more affordable. fee, you would expect to earn $50,000? If so, would you be willing to accept that as a
fixed fee and let us pay the subs and suppliers directly?”
A local builder
in our area was
charging $100K Under this arrangement, you would receive and pay the invoices for subs and
plus costs, for a suppliers directly without any markup or profit to the general. You are free to sub-
reference. stitute your own subs or suppliers in any category and to negotiate with the general’s
John in Erie, CO
usual subs. You can do any self-work you wish. Since your general is not getting
Costs per square markups on subs and materials, he may ask for more than customary profit — some-
foot do vary quite thing to cover overhead. If he doesn’t — don’t offer it. If he does, it is now a negotiable
a bit depending
on location. As number, which is an advantage to you. If you have several contractors vying for the
they say in real work, you have leverage in setting this fee.
estate...location,
location, location.
Any agreements like the above need to be settled with your contractor in
Costs within advance of construction, while he is in the position of competing for the job. Let the
about a 30-mile contractor know that you intend to have a well-defined relationship in the beginning,
range around us

and get protections that are very solid. You will be in a very rare and enviable position probably vary by
among new custom homebuyers. $30/sq ft due to
location. Build
out in the sticks
It does pay to shop and negotiate, even if you think you have a very good deal and you can do
before you. When I was restoring my house in Ohio in 1983 after a house fire, I got it reasonably, tell
a estimate from the insurance company who said flatly: “This is what we will pay to somebody you’re
restore your house.” I decided to get a second estimate, from a restoration contractor. near the North
River Yacht club or
He found several additional items that he suggested be included in the restoration. the Country club
and look out! I’ve
I called the insurance company one morning from work and described five also found that if
or six items to them that they hadn’t considered. The conversation took about 15 you get people to
quote your work
minutes and resulted in the insurance company paying $7,500 more than they had who are used
planned. This resulted in an improved payout of $500 for each minute of the phone to doing work
call. In DSDE dollars, I would have had to earn $75,000 to add that much to my in those neigh-
net worth. That would have taken me a year and ten months at my then salary of borhoods, their
pricing seems to
$42,000. reflect where they
spend most of
Prior to finalizing your contractor choice, before you sign the agreement, their time.
take time to do some telephone shopping to check with other generals on your accept- Once again it
able list to see how close they would come to the terms you can get from your first comes down to
choice. shopping around
and trying to get
the most for your
Bide your time. Based on normal market fluctuations, experts tell me that money, but even if
your bid for the same work could be 15% higher or lower. It may pay to be patient, you pay more in
or to be ready to move if the numbers are right. Your preparation will help you to those areas you’ll
recognize a bargain. still see savings
come appraisal
time if you O-B it
or shop around
You Know What You Are Getting Into a bit.
Ted in Northport,
AL
Having read this book, you know all about the planning steps involved in a
thorough custom home project. The planning work is like shooting foul shots at the Forums
end of a basketball game when you are behind. You can score without taking time off Recently I visited
a local “Parade of
the clock. You can reduce your costs substantially before a shovel of dirt is turned, Homes” and came
and before the interest clock starts ticking. Even if you hire a contractor. across a pro-
gram that a local
You can decide after you do all the prep or at any point along the way if you (reputable) builder
was advocating.
want to go the contractor route. Keep your options open at first. Everything you do The program
and all you learn will help you at points along the way, and give you a better finished national program
product and more equity. called the UBuildIt
program, and it is
essentially a part-
A recent story in the newspapers in Phoenix, Arizona was about a home- nering program for
owner in the historical district. The owner there got a licensed remodeling contractor people who want
and gave him $90,000 to remodel the home and never saw him again. Don’t be casual to be an Owner-
Builder. For 4% of
about a decision to use a general contractor, thinking that you can place yourself in the construction
his hands and relax. You must be vigilant to use the legal safeguards of contracting cost of the home,
described in Chapter 12, including the rule of not paying before work is done. you get to use
the contractor’s
resources and you
Review “Contractor Games” in Chapter 3. Be savvy in looking out for your get to use their
own protection. subcontractors
and vendors at

their rates. They even have agreements worked out with the bank to help you finance. I was curious if anyone had experi-
ence with this program.
Thomas in Toledo, OH
Thomas, My only experience with UBuildIt is that I had considered opening up a franchise myself for the Austin area.
However, someone has beat me to the punch. The system is essentially a construction consultant service targeted
exclusively to Owner-Builders. The fees range from 4% up to 10% for each project and are based on the total cost of the
project and how much involvement you, the owner, want UBuildIt to have. The program encourages current construction
knowledge, however, they provide training as well. They direct O-B’s in obtaining financing, permits, materials, etc. for
their specific project. If you do not have subcontractors chosen, the UBuildIt consultant recommends them. These could be
ones he/she has used in the past or chosen from a specific list available to the UBuildIt franchisee. They also provide all
the forms that are needed over the course of the project. Overall, if you don’t have the time to do the project yourself, or
feel overwhelmed by the process, then this could be the way to go. You can also check your local Yellow Pages under
project management or construction management and get comparable bids from firms already doing it. Hope this helps.
Jim in Austin, TX
All you are really doing with these companies is paying the General Contractor’s fee to someone else. While it MAY be
a little bit less, I don’t think that it changes much.
Jeff in Provo, UT
Thanks for the feedback. I ended up meeting with some representatives from UBuildIt, but I was not convinced that their
service was worth the requested 4%. They were not able to guarantee me that I would be able to get any better pricing
from subs than if I were to go it alone. However, I was impressed with the overall service, and if I didn’t have 8 years of
commercial construction experience under my belt, I would probably spend the money and hire them.
Thomas in Toledo, OH
BuildMax.com may be able to help you. They are like the UBuildIt folks in some ways, but it sounds like they are a bit
cheaper.
Anonymous
We were not impressed with our local UBuildIt representatives and chose not to contract with them. I trust you have a
better result. Take care.
Robert in Chandler, AZ
We started out using UBuildIt. It did help us get our loan. But, after the first two quotes being much higher than when we
went to get our own quotes we got a bad taste in our mouth. The rep’s answer was, “you get what you pay for.” We
still used the better quotes and were completely pleased. Our UBuildIt Rep contracts with Wausau (panelized building
system). So, my husband negotiated that we only pay the fees on that part, since we felt the cost was very fair. I was so
glad he was able to do that because every time I saw their fee in our spreadsheet it would make me sick.
Another thing that is odd. The fee is a percentage of the quotes that they come up with. No incentive to keep quotes low.
Angie in London, OH
Congrats on getting UBuildIt to come down to reality!
BTW, they should have had nothing to do with getting your loan. Although since we did not use them, I cannot prove it;
but with my 23 years in mortgage finance, I am [reasonably] sure they are getting a kickback from IndyMac or whoever
is the lender on their loans.
Robert in Chandler, AZ
I just started with UBuildIt in Las Vegas and I have been very pleased so far (although every office will be different). My
local UBuildIt office charges a flat fee of $6.50/sf living space to handle the whole thing which basically encompasses
helping you through the plans process, selecting subs and bidding out your plans, and then they provide around 25 site
visits to check construction quality and whatnot.
My total cost to construct is in the neighborhood of $260K – $270K and my UBuildIt fee is approx $14K; no contractor
around here would even consider speaking with me for a fee like that. Even O-B construction consultants I spoke with
started at $25K-$30K for their fee. Most full service GC’s I spoke with charged 20% of the construction cost to handle the
project.
I have no doubt that a person COULD do this themselves, but this particular office has many sub contacts and more
weight in getting them out to the jobsite and getting the job done. Plus they take a lot of the stress off me knowing I can
call them when I need help. I feel I could easily make $14K in mistakes on my own. Plus you can get any of your own
bids and do whatever portion of the work you want yourself.

I was ready to give up on my entire project until I met with the UBuildIt guys and now we are working on the plans and
getting the engineering done. I’m actually doing the architectural drawings myself and the UBuildIt guys are proofing them
to make sure it has what I need. I’m saving a few grand just in plans.
I will also say that my office didn’t push IndyMac at all, in fact they suggested against them and sent me to a local lender
with much better terms and closing costs are about half what they would have been with Wells Fargo. They have been
very helpful in providing advice on how to save money all around.
Jeff in Henderson, NV
You get the knowledge and relationships of an established builder vs. a one-shot amateur deal.
My experience with BuildMax is that they charged a cheaper % than UBuildIt, but they based their percentage on TOTAL
cost including land, not just the wholesale cost of the house like UBuildIt. Works out the same for a lot less help, no ON-
SITE expertise, and no local sub and supplier relationships.
Anthony in Lebanon, OH
I was impressed by UBuildIt’s organization but, I was not impressed by their fee for consulting. Basically all they do is be
there for questioning and give you tips. You still do most of the legwork yourself. My local UBuildIt office charges $2,500
for preconstruction (budgeting, plans, land, etc.) and $8-$9 per sf for construction consulting. If you build a 3,000 sf
home, your UBuildIt fee would be $24K – $27K just for construction consulting. I would rather pay a GC to do all the
work than pay this ridiculous amount for consulting. Just my two cents.
Scottie in Durham, NC
I have just completed “Phase 1” with UBuildIt. This is the phase where they help with budgeting, do the initial bidding, (in
theory) help with land & planning, etc.
I have been very unhappy with my experience. I think this could be very driven by the Franchisee, but at any rate, I have
not been happy and DO NOT plant to continue to “Phase 2”. I know the ‘lot’ next to ours is progressing with a different
local UBuildIt rep, so, apparently, some people find value.
My issues/dislikes:
1) In our land selection, we provided the UBuildIt person the Plat plan for our division. He said things looked fine. Later...
we found out we needed to have a GeoTechnical assessment (~$3.5K) done on our lot. He totally missed this as it was
stated on the plat plan he reviewed.
2) We purchased two lots, which it turns out, in our county needs to be combined into one. He had worked with multiple
lot owners before, and neglected to tell us this. Fortunately, I was independently calling surveyors (not based on his sug-
gestion, though he is supposed to provide that guidance) and found that out. I was lucky; I called at a perfect time to get
this done the following month – vs. if I had been a week later, it would have been two months. Additionally, the cost of
this is $2K.
3) We are on a hillside lot, so we had been out to the lot on three different occasions with our UBuildIt rep. We were
‘measuring’ how deep the house could be in order to avoid having to have “sub foundation walls” based on the slope.
Each time, with his “Expert Guidance” we measured from the road curb to the 30’ building line, then to the back of the
house to assess the drop-off. We did all of our planning based on this process. Turns out, the county/township has a set
‘Right of Way’ at which you measure the building line from there. Which is ALWAYS behind the road curb. I had even
specifically asked about this as my current house had the same building line, but was further back. He assured me that it
was from the road. Net, this adds $10K to our budget.
4) Timing... we expressed clearly back last August that we wanted to start by this March. One of the services is they are
supposed to help you with the ‘Timeline’ to keep you on track to start when you want, and also manage the schedule of
the building process. I had asked a few times when I would need to have house plans selected and he said ‘I’ll let you
know’... needless to say, it is now two months past our desired start date – and we don’t even have a building permit
yet... So, that was frustrating.
5) The initial ‘Ballpark” budget, which he stated was +/- 10% was WAY off. We made several changes to go with some
less expensive options, so we thought we would be nearer the -10% end of the range. The actual bids came in about
20% higher than the HIGH end of his range. So, if you consider we had kept the house as initially planned, I am guess-
ing it would have been 25-30% higher. A budget miss of nearly $60,000 is not very ‘expert’.
6) I really didn’t see any ‘benefit’ from using his Contractors. One of their big sales pitches is “We’ll get a lot better prices
since we do close to 100 houses a year”. Very few of his bids were better than mine, and NONE were substantially
better. Several of my own bids were better than his.
7) He wasn’t open to “Alternative’ construction techniques. I asked about SIPs and ICFs, and he said they were both
‘Ridiculously expensive’ and he wouldn’t even bid those out as options. I have chosen ICF, and it is more expensive for me
– but, not nearly as much as he portrayed it to be.
8) The cost structure... I found a ‘General Contractor’ with a good reputation who would charge me 14% of the cost
that they managed. My UBuildIt fee was 7.25% of THEIR projected costs. So, when I figured in the ~ $60,000 of work

and direct purchases I planned to make... these fees became much more similar – so to have someone fully manage the
project would have been at about the same cost. The UBuildIt said “well, I still charge you 7.25% of the $60,000 even
if I have nothing to do with it” whereas the General Contractor said “If I don’t touch it, ‘why should I make money on it? I
won’t charge you for work you do or supplies you provide without me”.
9) His ‘help’ wasn’t very helpful in my opinion. His ‘help’ on Building Permits was, “Well, you could get a building permit
now”. No guidance, no forms, no ‘this is what you need to take and where’, no contact names, nothing. Just ‘get your
permit’. If that is the help I was going to receive, I can figure that out on my own and save $20,000.
The one thing I did find helpful, was the Specification sheets. These were the sheets used to identify what I was looking
for from subcontractors when bidding. I haven’t compiled a list yet, but plan to at some point. I know some people have
good experiences, but I absolutely did not.
I think if you want to minimize the ‘legwork’, the bidding process is a lot of work – so, if you just went with the UBuildIt
bids, you could save a lot of time and effort. I haven’t seen their ‘Phase 2” guidance, but the reading I have done, and
what I have learned on my own makes me confident I can save money... which is really needed now that the budget was
as far off as it was!
Why anyone would use UBuildIt rather than a GC is beyond me. I have seen the UBuildIt franchise literature and one of
the main selling points is that their franchises can make as much profit as a GC but without the work and the LIABILITY. In
my opinion, UBuildIt is a scam.
Paul in Canyon Lake, CA
We have just had the worst experience with UBuildIt located in Mill Creek, WA. It is a SCAM. We were told by the
owner that if we found out early in the process our plans would not work, we would only lose the site assessment fee
of $600. Wrong! More like $2,000! Beware of their contract wording. You lose the ‘non-refundable’ portion of your
fee. AND if you’ve only paid part of it – they require you to cough up the extra! We found that they do very little for the
owner-builder – you do almost all the work yourselves, all they do is collect the fees. Go with a GC so you at least get
what you pay for.
Bill
My experience with UBuildIt in Orlando was the same. Different details but no “expert” advice, higher bids, not maintain-
ing timeline, etc. I would not recommend them.
Lyn
I had a similar experience with the UBuildIt office in Bellevue, WA. We had them give us a budget estimate as part of
their “Phase I” service. Their cost estimate was more than spec homes being built by GC’s in the same neighborhood our
lot was in. I also had trouble in how they calculated their cost/sq ft estimate. They added both garage and porch areas
to the heated square footage and then used the total square footage to determine the cost/sq ft price. My understanding
is that cost/sq ft are usually quoted on heated living space only. This had the nice effect of making UBuildIt’s cost/sq ft
estimates appear lower than they really were.
Our UBuildIt fee was going to be $36K on a 3,500 sf house. They basically provide consulting but we would still have
to do most all the work. I also share the same concerns about their subcontractors that others have had. They planned on
using their own subs and would not bid the trades out. They claimed to “save” money, but I don’t see how when there is
no price competition.
We are planning to break ground in January and we will not be using UBuildIt. We are going to hire a GC to do the site
work, foundation, framing, siding and roofing. I will then personally oversee the finish work on the house.
Mark in Redmond, WA
Mark, we are about on the same time frame. We hope to start building about then. We also decided the best we could
do would be have a contractor get to the stage the roof is on, and then take over. Good Luck
Lyn
My experience with the UBuildIt program was completely different than those I have seen in this thread. I am using the
UBuildIt program in Louisville, KY. The franchise was recently purchased by a new owner and he is really a go-getter. He
is providing me with lots of support. He talks to my subs almost every day and he is really as involved as a GC would
be on this project. Also, the fee is very reasonable and I am still saving 15-20% over using a GC. So if anyone is thinking
about building in the KY area, I would highly recommend UBuildIt.
Carole in Elizabethtown, KY

Carole, as I told the franchisee here, I didn’t think his program was bad, it just wasn’t for me. He wasn’t saving me any
money over what I could save myself, since I had already done one project as owner-builder, and he didn’t know any
more about the city regulations than I did.
Lyn
I am surprised you say you could save ‘15%-20%’ vs. using a GC. I found several builders, including a Homearama
builder (Not sure how widespread Homearama is... it is basically a ‘home show’ of high-end homes) who would only
charge a total of 12% on top of cost. Compared to UBuildIt at 7%, this was only a 5% savings... and you would have
to do none of the work with the GC. Maybe it is market-dependent, but I would strongly encourage everyone to look
around at other alternatives. If I found someone to GC my home for 5%, I probably would have vs. doing it on my own!
Since each office is independently owned and operated, I think the owner of your local franchise makes the difference.
The office that I am working with did not charge me a percentage of the cost to build my house, just a set fee which is
going to be about 4% of my cost to build. Also, unless you are the person who pays the subs and suppliers directly, the
GC can mark up the cost to get more profit. I know that not all GCs do this, but they can. Since I am controlling much of
the process, I am shopping around for bargains on all of my supplies and negotiating with the subs. If you have a GC
they will not have time to shop around, and they usually have the same subs with set pricing. I realize that UBuildIt will not
work for everyone, but I just wanted to let others know that it worked for me. I considered doing everything myself, but
since this is the first house that I have built without a GC, I just wanted the support.
Carole in Elizabethtown, KY
I’ve been with the UBuildIt in Orlando now for months and stayed with them due to three different GC’s not being able to
match the price I can get with UBuildIt. They give me great prices until I ask for it on paper with specs of what I want then
all of them started backstroking. I have bids in writing that show that I would save almost $100,000 or more on my home
over the price of a GC. That is with the sq ft charge of UBuildIt.
They have stuck by me and help with the issues the county I live in has thrown at me time and time again as well as the
subs that I chose for walls and roofing when engineering became an issue with the county’s numerous unannounced
requirements as well as code changes that occurred. It hasn’t been a piece of cake but unless the GC’s know who to pay
off in the county, I can’t see how they could have completed it any easier. But, I was told in our initial meeting that I had
to do the “legwork” to get the job done. Well, if that is all it takes to save more money than I make in almost three years,
I think it’s worth it. Plus, I get the house I want, not what the GC thinks I want.
Kathy in Ferndale, FL
Halfway there now that we are through the county. The guys at UBuildIt have been helping me every step. These guys
have even gone above and beyond what I’ve paid them for by finding more efficient and cheaper ways to do my
project. They even got me with a new sub that came on board with them and has a cheaper more efficient insulation that
is going to save me almost $4,500 as well as a new cabinetmaker that saved me $2,500. I’m elated with them for that.
Hoping to finish up in the next 2-3 months, weather permitting. So, for now I’ve had no real issues.
Kathy in Ferndale, FL
I thought I would give a quick update on our project. We started in January, currently are trying to wrap up rough-in and
get drywall up and hope to move in by end of August.
As I mentioned before, we decided to hire a GC to get us through the first half of construction. My GC still has a few mis-
cellaneous tasks to finish, but he is almost complete with his part of my project. I have been managing the rough-in subs
for the past month. We did cost +21% which is a bit steeper than I wanted to pay, but it is a builders’ market in our area.
When finished, I will have paid my GC ~$30K in fees which is less than the $36K UBuildIt wanted. My house has been
the only one my contractor has been working on and he is on the job site daily. He is letting me use his subs and in many
of my trades I am ahead of budget because they have given me much better pricing than I’ve bid out my own. There
has also been many times when he has suggested alternative products or solutions that have saved me $$. I’m hoping to
finish at around $105/sf.
Overall, I think I’ve been extremely lucky and have found an outstanding GC. One who is honest, hardworking and has
been helping me keep costs down. On the other hand, I’ve been watching a neighbor’s custom house go up across the
street. They are using a GC, started in September (8-9 months ago) and still don’t have drywall or siding on.
Mark in Redmond, WA
Mark, you just made us all happy, give our best regards to your honest, hard working, money-saving GC. Then tell him to
move to Orlando. As you can see from this website, there are a lot of us who would love to work with someone like him
to get dried in and then proceed on our own. Best of luck to you both.
Lyn

Forums
My husband and I have done quite a bit of research on the approach we want to take, from complete owner-builder, to
panelized, to have it completely built, to a combo.
Our strengths:
Husband works in the building industry and has customers who have agreed to
* provide top of the line doors/windows at cost and install.
* building package (all trusses, lumber, etc.) at big builder’s prices (good discount)
* drywall at cost or deep discount
* etc.
Weaknesses:
* both have FT time-consuming jobs and we lack the time to manage the project
* don’t know the good subs from the bad subs
* don’t know what a good labor price is.
We built our 24x40 barn as a test run...and that was enough of headache IMO. We tried getting contractors on our
own. But, they either wouldn’t return calls or the prices seemed outrageous. When my husband was complaining to the
gentlemen that we purchased our lot from and who were building the home behind, they always provided us with a
name of contractor that worked out well. They actually approached us about building a home for us and we were getting
pretty discouraged with the Panelized guy’s recommendations for subcontractors...especially on the prices their subs were
quoting us. The folks we purchased the land from are excavators by trade but also have built several homes.
We think we found a potential compromise solution, but I want to get some feedback. They are willing to GC this project
and leverage all of the deals that my husband can get us. Show us all invoicing. They will do this for a 15% markup on all
of the costs. Is 15% a fair deal or is this too much? Should we continue planning/negotiation?
Mary in OH
Maybe offer them a flat fee for their GC’ing the project.
Jeff in San Antonio, TX
The question becomes why are you interested in O-B at all? The intent of O-B is to get quality construction (much higher
than spec), save money (eliminate GC OH&P), and to get exactly what you want. You can accomplish two of these goals
without O-B. The GC puts up with a lot of headaches in the construction process, and are compensated accordingly. For
me, I built at the top of my neighborhood (wonderful setting) so in order to get better quality construction on a custom-
designed house, I had to save money if I ever wanted to consider that I might sell it sometime in the foreseeable future
and still cover my costs, so it was all about cutting costs as my primary reason to O-B.
Just because you O-B doesn’t mean that one person does everything, or that you can’t hire a foreman or construction man-
ager or accountant or subcontractor or inspector. I worked with my SO, and we really had a clear delineation of tasks
she did vs. tasks I did, and there was very little overlap. Given that we had clear tasks and expectations between us, it
would have been fairly easy to use what you coin a “hybrid” approach and hire the services of a person to fill in for one
or the other, for a reasonable fee of course. I would argue that anytime you hire a subcontractor, you are moving toward
this “hybrid” approach, but this doesn’t make you less an O-B.
If you decide the best option is to pay a GC for his services, I would recommend a fixed price for a certain package
of services provided. I do not like percentage-based fees. Let’s use lumber as an example. How much incentive does
your GC have to call around to every lumberyard to try to get the combination of best price and service? Any money he
saves directly results in less fee for them – they will simply use the lumber supplier they already have a relationship with
and quite likely this is not the lowest price you could find with simply an hour or two of faxing your material takeoffs to
the different lumberyards in any geographic area. I don’t believe they will purposely look for the highest price for lumber
either, just don’t expect much in the way of work to minimize your costs. The professionals will tell you (and most of them
honestly believe it) that because they do $XX,XXX worth of business they get better prices. This is pure fallacy. I found that
I could universally beat my subcontractor prices on almost everything (HVAC being the exception, you can’t really get
this stuff without being licensed). I hired several subcontractors who changed their suppliers after my job simply because
I could significantly beat their delivered price, much to their surprise (every one of them told me I didn’t have a chance at
meeting or beating their prices from their sources). Another example is architects or designers who charge by the square
foot; exactly what incentive do they have to minimize square footage? I don’t disagree that these people that you hire
don’t have your best interest in mind, but their fee structure is directly in conflict with the service they are providing which is
to ultimately save you money.

Afterword: Once You’re In...
Minimize Punch List
As a quality control on the house, make sure that items aren’t hanging over
after you occupy. They can become enormous. I had six pages of punch list (unfin-
ished or incorrect items needing fixes before the contractor can “punch out”) after
my house restoration in Ohio, and refused to make my last payment until it was
completed. The contractor didn’t want to take care of the little things, so he decided
not to pursue collection of the last ten thousand dollars. I took care of the items at a
big savings.
You don’t have that advantage as an owner-builder. You will be stuck with
whatever is not right when all your subs have gone home and you have paid them. The punch list
The little items can linger for a long time. My list on the Riverbottoms home was over checklist shown
100 items, most relating to my imperfections as a painter. on the next page
is also available
If you have a list, manage it. Use the worksheet on page 238, or put the items on a spreadsheet
on a spreadsheet with a column to tally an unfinished item count. Track your prog- template in our
ress to completion. Free Download
Gallery

238 • Afterword: Once You're In...
Punch List
Task Notes
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Afterword: Once You're In... • 239
Punch List
Task Notes
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Punch List
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Forums Lower Your Property Taxes

Hi all, I noticed
that many of you
brag on the high Many owner-builders find themselves in the position that I did on moving
appraisals of into their new homes. The new house is assessed much higher for property taxes than
your homes after their former residence. (The average owner-built home in our survey is 50% bigger
the building is
finished. In our than the one it replaced.) My new assessment resulted in much higher property taxes
case, we’d like than I anticipated. I went down and appealed my assessment before the Board of
the appraisal to Equalization for my municipality and got a generous adjustment.
be lower because
we’re trying to
avoid the outra- You are in a uniquely opportune position to get an adjustment as an owner-
geous property builder, and it can be a big savings. My evidence before the Board was that my home
taxes that we pay
on our current cost less to build than they assessed it for. They accepted that argument along with
home. my statement about costs. I interviewed tax assessors in several locations around the
United States and they all acknowledged that receipts for construction costs would be
It seems like I read
in The O-B Book considered good evidence for adjustment.
that one way
to avoid higher The value of your adjustment can be substantial because reassessment does
taxes is to take
receipts, etc., to not occur for as many as ten years in some localities, according to Peter Sepp at the
the tax authori- National Taxpayers Union. If you save $500 a year, your savings may mount up to as
ties and prove to much as $5,000. Mr. Sepp told me he is constantly amazed at the citizens who will
them the amount
of materials that not make the effort to prepare and present a case for adjustment, no more than a
actually went into half-days’ work. Four hours expended for $5,000 saved is $1,250 saved per hour.
the home. Sounds
like a good idea,
IF it works. Out
here, apprais- Better than Wall Street
als are done by
comparing houses
to other houses Some homeowners are surprised to learn that mortgage interest usually
that are similar. So exceeds the cost of the house itself over a 30-year period. With interest, your home
we’d like to avoid can cost you two to three times its original price over the life of the mortgage. For
that...
instance, principal and interest payments on a $350,000 loan at 8% interest would
I’m wondering, amount to about $925,000 over 30 years. At six percent interest, the payments would
has anyone actu- equal $755,000 over 30 years.
ally done this? Did
it work? We’re
building in a By planning carefully, you can turn this phenomenon to your advantage.
high-tax area, and One way to make a quick reduction in overall interest is by setting up your mortgage
although we’ll be
building a smaller over a 15-year rather than a 30-year period. Principal and interest on a $350,000
home than our cur- loan at six percent for 15 years totals $532,000. (The monthly payment is $850 more
rent one, we are than the 30-yr. mortgage.) Another approach is to make balance-reduction payments
building next door
and are looking periodically in addition to your regular mortgage payments. By making one extra
for some tips on mortgage payment per year, you can pay off a 30-year loan in 24 1/2 years.
keeping the taxes
as low as possible
(especially since Another option is to pay your mortgage biweekly, dividing your normal
this is a semi-retire- payment in half, but making 26 payments a year. This strategy shortens a 30-year
ment home). mortgage by six years. Or, you could make an extra balance-reduction payment each
Bobbi C.
month. By adding $250 per month to $350,000 mortgage payment, you would spend
Bobbi, there $67,000 to reduce a 6% mortgage by 7 years. You would save $111,244 in interest over
is a difference 7 years thereafter. The return on your $67,000 is $111,244 and unlike stock market
between an
appraisal and an returns, it’s guaranteed!

Help Someone Else assessment. Your

taxes are based
on the assessment,
By following the steps in this book, you, the courageous owner-builder, will not the appraisal
accomplish one of the most substantial achievements available in our society. You (in fact, they never
even see the
will gain all the advantages and status of owning a well-designed and meticulously appraisal, this is
constructed home. Your personal wealth will jump substantially. Share your good between you and
fortune. Put your knowledge to work on behalf of someone else. the bank).
What my bank
97% of O-B’s in our survey state a willingness to help other owner-builders does is appraise
in some way. But the answers to the survey question Did you have a good mentor? the house before
construction to
are disappointing. Some things you can do for someone else: Join us on our web- determine the
site at OwnerBuilderBook.com. Respond to Connections messages from other O-B’s amount they
and “coach” another owner-builder. Show up to offer on-site support and assistance. are willing to
loan (they will
Help build a Habitat for Humanity house or restore a Christmas in April (now called loan 80% of
“Rebuilding Together”) house or similar charitable construction project. Join a the appraised
church or civic group in repairing the home of an elderly or disadvantaged person. value). However,
if the estimate
you submit is less
Ask your questions and contribute your ideas in our General Forums, or join than this, they
our Local Forums organized for every U.S. state and Canadian province. Or, start a will lower the
appraisal. For
construction Journal. Add to your knowledge and help others to “beat the system”. example, if my
Allow us to help you with further materials or answers to your questions. Call us toll- bank appraises
free at 888.333.BUILD. the house at
$200K, they will
loan $160K.
Be sure to thank, in writing, the subs and suppliers who made you a success. However, if the
Share their names and business cards with others. Promote their success as they did estimate I turned
in is only $150K,
yours. they will lower
the appraisal to
$187.5K and
Now go build. loan you $150K
(for this reason I
had to fatten my
estimates because
“Whatever you can do, or I didn’t want to
limit my construc-
dream you can, begin it. tion loan prema-
turely). At the end
Boldness has genius, power of the project, they

will do another
appraisal because
and magic in it.” now I have a
permanent mort-
gage, and not a
construction loan.
Goethe The appraisal will
now be based on
the amount of the
permanent loan.
Believe me, I am
going to use this
artificially low
appraisal to try
to lower my tax
assessment and
my insurance rates
(you should insure

for full replacement value anyway). My insurance agent said with my house, they would do their own appraisal anyway
due to the unique construction (ICF) in this area.
OK, the house we’re in now was based on the appraisal because we got a construction loan. For the new house, how-
ever, we are doing cash-only as we go along. That will probably make a difference. Sorry, I should have mentioned that.
But here in TX, they really do rely on other houses similar to the new ones in order to get some kind of value. I don’t really
think that’s fair, considering we’ll probably pay much less for ours than some of the other new builder-built ones.
Bobbi
Forums
I bought this house. How do I find out about property taxes? or Where do I go for ask someone about property taxes?
Richard in Springfield, TN
What is the best way to appeal my new house tax appraisal? I would like to lower my property tax.
J in PA
I know on our property tax bill, it specifically states if you don’t agree and would like to fight who to contact. In our
county, they have specific days and times that you can go to fight the assessment.
Dorthy in Muskegon, MI
I am an assessor, and I will tell you how I defend values. The best indicator of value is the market. If I had to defend a
value on your home I would look for similar homes that have sold recently. This is called a sales comparison approach to
value. Keep in mind that no home is going to be exactly like yours. Always make adjustments to the comparable homes,
never to the subject. Also surrounding neighborhoods make a difference. Try to keep local homes in your comps.
If all the homes that are comparable to yours are selling for more than two times your assessed value you might not want
to appeal. The appeal process can RAISE your taxes too. I would recommend getting a copy of your property record
card and see what information the assessor’s office has on your property. If you do decide to make an appeal, do the
work on the appeal yourself, there is no need to spend $300 on an independent appraisal that probably won’t carry
much weight anyway.
Also, in Michigan there are two different values relating to homes, there is Assessed Value and Taxable Value, they sound
alike but are very different numbers. Assessed value is 50% of the True Cash Value of your home, or TCV. However if your
assessment goes up $5,000, thus the TCV of your home went up $10,000 that doesn’t mean your taxes went up very
much, because you pay taxes on the Taxable Value.
Proposal A back in 1996 put a cap on property taxes so whenever there is a transfer of ownership the property becomes
“uncapped” for that year and the Taxable Value and Assessed Value are made equal. Then the property is “capped”
again and the Taxable Value can only go up 5% or the CPI whichever is lower, plus any improvements or additions you
might have added that year. I wish you the best of luck, in your tax situation........ and home building process. I am 24
and looking to build my first home as well.
Evan
Sources Say
Habitat for Humanity: How to Build a House lists items usually left to the owner-builder and how to handle them, such
as installing toilet paper holders, mounting a fire extinguisher, nailing up house numbers, putting in the medicine cabinet,
door locks, deadbolts, drawer pulls, towel bars, and smoke detectors. Also provides advice on water and gas shutoff
and changing furnace filters.
O-B Connections
Hi Alan, I am a resident in Whittier, CA and in the process on planning a O-B addition to our residence. I was looking
through your journal and am interested in talking to you as a “mentor” if you are open to that.
Kevin

Index • 245
Index B Clean-up, 100

Clean Job Saves, 203
Back-Up Plans, 162
Clearing, 48, 109
Balance, Loan, 14, 128, 134,
Closings, Loan, 16, 134,
Symbols 242
173, 176, 216
Bargains, 18, 121
12-gauge wiring, 67 Compact Fluorescent Light-
Barter Club, 269
ing, 67
Beneficiary, 180
Comparing Bids, 88, 93, 94
A Bids
Competition
Follow Up Your Bids, 93
A/C, 67, 144, 146, 148 Atmosphere of,, 137, 139,
How To Get Bids, 92
Absorption, 66 142
Blocking, 65, 75
Accomplishment, 5, 191, Computer
Blueprint(s), 78, 182
258 How to Use to Save, 126
Bond, Payment, 176, 179
Accounting, 189 Scheduling, 154
Boneyard, 121
Accurate Takeoff, 84 Consensus, 202
Breakdown, Cost, 88, 96,
Acoustics, 61 Consensus Breeds Creativ-
169, 180, 229
Acre, 14, 29, 106, 131 ity, 202
Budget Worksheet, 108
Addition, 9, 120, 244, 261, Considerations, Quality, 5,
How To Use, 105
268 7, 26, 55, 63
Building booms, 3
Administration, 28, 121 Construction Advisor, 6,
Building codes, 261
Advance Planning, 190 24, 34, 162, 169, 186,
Advance Specifications, 72 203
Aesthetics, 67, 79, 83 C Construction Bargain Strat-
Aggravation, 192, 217, 259 egies, 131, 149, 260
“Cold Sweat” Equity, 3 Construction Contract
Aggregate, 73
Cafeteria-Style, 5, 23, 63, Types, 230
Agreement(s)
92 Construction Loan, 8, 72,
Contracting, 23, 182
Calendar, 96, 129, 133, 151, 134, 165, 259, 268
Lien Waiver, 177, 178
154 Construction Work Sched-
Air-to-Air Heat Exchanger,
Cantilevering, 81 ule, 128
61, 62
Ceiling Fans, 5, 18, 60, 64, Consumer Reports, 153
Alternative Building Materi-
212 Contingency, 70, 99, 103,
als, 261
Cellular Phone, 191 116, 169, 180
Appraisal, 1, 5, 29, 134, 168,
Ceramic Tile, 102 Contract
174, 194, 231, 242, 244
Certificate of Occupancy, Bid, 7
Architect, 5, 30, 40, 53, 63,
199 Contracting Agreement,
74, 77, 79, 128, 136, 163,
Change Orders, 23, 64, 69, 182
220, 259
81 Contractor Games, 21, 231
As-Built Budget, 219
Cheating, 6 Contractor Show, 27, 99,
Auction, 133
Checklist, 35, 56, 163, 172 139
Classified Ads, 38, 136, 142

246 • Index
Contracts, 23, 180, 182, 187, E H

220, 270
Emotional Roller Coaster, Helpful Links, 152, 243
Cosign, 171, 176
191 agfirst.com, 135
Cost-Engineering, 149
Energy Savings, 66, 145 aibd.org/consumers, 138
Cost-Plus, 23, 181, 230
Engineer ALNO-Kitchen-Planner,
Costs
Structural, 168 64
Breakdown, 88, 96, 169,
Equalization builderstrade.com., 139
180, 229
Board of, 242 Construction Journals,
Insurance, 177, 179, 228
Escrow, 129, 176 129, 220, 243
Life-Cycle, 83
Estimate, 2, 6, 9 eBay, 62, 128
Operating, 82, 148, 205,
Extras, 201 energystar.gov, 146
257
Forum User Links, 129
County fees, 181
Free Download Gallery,
Coupons, 274 F 58, 89, 92, 104, 164, 179,
Curb Appeal, 61
Fax, 36, 71, 88, 90, 92, 106, 212, 237
Custom Builder Magazine,
127, 155, 162 General Forums, 38, 243
51, 71
Features, 1, 5, 53, 60, 66, Google.com, 128
127, 133, 200 IHEonline.com, 172
D Fees, Impact, 13, 181 indymac.com, 135
Fees, Title, 100, 124, 134, Local Forums, 243
D.S.D.E., 18, 98 lynda.com, 98
173
Daily Record, 190 O-B Search Function,
Fees, Title Update, 173
Design, home, 53, 63, 75, 129
Financing, 109, 134, 149,
223, 257, 261, 264 ontariocontractors.com,
176, 263, 264
Designer interviews, 259 171
Firing, 11, 152, 217
Developer, 3, 36, 132 Owner-Builder Connec-
Fixed-Bid, 7, 23
Directories, 87 tions, 38, 129, 243
Fixed-price bid, 5, 181
Disability Insurance, 179 Owner-Builder Survey, 8,
Fixed Fee, 136, 230
Disasters, 149, 180, 200, 20, 34, 35, 66, 92, 125,
Forms, Lien Waiver, 167,
217, 228 128, 166, 188
270
Do-It-Yourself, 125 Passes for Builder’s Show,
Forums, 38, 243, 272
Door, 54, 156, 244 140
Frequent Flyer Card, 145
Downturn, 149 Sample Loan Proposal,
Future-Proof, 60, 260
Draws, 84, 173 168
Dream Home, 8, 17, 52, 212 User Tools, 164
Dream Home Notebook, G Calendar, 129
25, 53, 169 Lists, 129
Duties, 31, 34, 185, 197, 271 Guerilla Economics, 20
zurichna.com, 176
Home & Garden Show, 5,
42, 87, 139

Index • 247
Home Center Stores, 106, L Micromanagement, 188

121, 143 Middleman, 26, 135
Labor, 3, 23, 69, 81, 177,
Home Design, 259, 261 Misconceptions, 9
180, 189
Home Show, 139 Mistakes, 6, 35, 181, 189,
Land, 128, 131, 168, 172,
House Features, 129, 133, 215, 223
177
257 Moonlighters, 123
Landscaping, 57, 61, 66,
House Specifications, 72, Mortgage, 4, 134, 146, 171,
158, 201, 209, 257
88, 99, 127, 153, 186, 219 173, 242
Lawsuit, 75, 175, 202, 217
How-To, 268 Motivate, 32, 36
Lender(s), 5, 9, 35, 72, 86,
MP3, 84, 268
93, 106, 172, 193
Multiple Listing Features,
I Liability, 79, 90, 166, 178,
56
179, 182, 228
ICF, 61, 66, 71, 82, 86, 124, Multiple Listing Service, 56
Lien, 25, 126, 167, 168, 178,
129 Myths and Propaganda, 5,
264, 270
If You are Married, 220 21
Lien Release, 167, 270
Impact Fees, 13, 181 Life Cycle Costs, 83
Independent Inspections, Liquidated Damages, 164, N
205 180
Inspection(s), 156, 206, 211, List of Features, 40, 55, 56, National Hardware Show,
212, 265 58, 60, 61, 65, 66, 257, 67
Inspector(s), 6, 12, 22, 86, 260, 268 Negotiate, 92, 121, 134, 153,
106, 181, 198, 199, 204 Loan, Negotiate, 134, 172 164, 172, 230, 269
Insurance, 179, 228 Loan, One-Close, 172 Network, 38, 129, 140, 188,
Insurance Cost, 174 Loan Presentation, 171 196
Integrate, 32, 185, 189 Loan Proposal, 46, 167, 168 Newsletters, 66, 272
Interest Rate, 134, 172 Low-E, 61, 65
Interior Decorator, 86 Lowering the Threshold, 4
Internet, 128, 142 O
Lumberyard, 6, 40, 87, 91,
Interview(s), 127, 129, 144 106, 121, 134, 154, 218 Off-season, 149
Itemize, 92 On-Line Auctions, 133
Tax deductions, 194 On-Site, 9, 24, 34, 48, 64,
M 116, 169, 200, 243
Manage, Management, 31 Need to Be, 200
J
Manufacturers, 67, 139 Operating Costs, 82, 205
Job Control, 167, 270 Margin, 27, 71, 154, 258 Organize, 25, 32, 120, 134,
Mark-Up, 5, 27, 126, 230 167, 203, 228
Market-Driven, 54, 58 Origination Fee, 16, 134,
K 172
Measure, 31, 185, 189, 202,
219 Overruns, 6, 99, 189, 208
Mechanical Trades, 8, 125 Owner, Sell By, 260

248 • Index
Owner-Builder Exclusive, 16 167, 187, 228 Shade Trees, 66, 145

Refund(s), 126, 145 Shop, Shopping, 24, 34, 70,
Releases, Lien. See Lien 104, 106, 119, 122, 127,
P Remodel, 99, 105, 140, 167, 139, 143
P.O.I.M.M., 213 231 Shops, Pawn, 140

Package Plan, 23, 174 Resale, 52, 60, 78 SIP, 66, 124, 139
Paperwork, 175 Research, 67, 91, 120, 133, Software, 124, 129
Parade of Homes, 34, 55, 64 172, 272 Special Reports, 90, 266
Pawn Shops, 140 Résumé, 169 Specs, 30, 54, 71, 88, 92, 109,
Payment Bond, 179 Retirement Plan, 17, 22 168, 222
Permits, 48, 181 Rights, 171 Spreadsheet Budget, 104,

Plan Hard, 32, 42 Risk(s), 7, 22, 58, 85, 120, 127, 219, 269
Planning Steps, 36, 38, 163, 131 Step-Up Strategy, 14

231 Dangers and Difficulties, Strategies, Construction
Plans, 5, 30, 48, 69, 75, 77, 81 210 bargain, 131
Pre-wire, 60, 62, 101, 112, Running the Job, 188 Structural Engineer, 86, 109
260 Subs, Subcontractors, 46, 87,
Pricing, 22, 126, 133, 141 89, 93, 177, 269, 270
S Finding Subs, 87
Procedures, Draws, 173
Project Notes, 50, 150, 250 Savings, 26, 80, 82, 83, 84 Good Subcontractors, 187
Property Taxes, 3, 16, 242 Savings Account, 17, 52 How to Get Subs to Show
Proposal, Loan, 167 Savings Suggestions, 1, 18, Up, 186
Protection, Insurance, 177, 259 Sub and Supplier Input,
179 Scare Tactics, 22 60
Punch List, 237 Schedule, 22, 25, 30, 128, Sub Recognition, 213
133 Successes, 215, 217
Staying on Schedule, 208 Superintendent, 26
Q Schedule, Computer, 128 Suppliers, 124, 168, 173, 179,
Schedule, Written, 151, 163 186, 230
Qualifications, 8, 11, 169
Schedule Reinforcement Surveyor, 86, 186
Quality, 5, 26, 55, 60, 63
Program, 163 Sweat Equity, 3
Quicken™, 25, 128, 189
Quit-Claim, 171 Schedule Worksheet, 160,
164
T
Score Yourself, 219
R Self-Work, 3, 34, 140, 170, Tax, 2, 3, 16, 36, 134, 145
188, 208, 270 Taxes, Property, 242
Radiant Heat, 76, 139
Risks, Dangers and Diffi- Team Members, 86
Realtor, 56, 59
culties, 210 Telephone, 8, 54, 60, 154,
Reasons to Use a General,
Rules, 211 231
227
Sell by Owner, 260 Template, 96, 129
References, 9, 78, 91, 153,

Index • 249
Ten Commandments of X
Owner-Builders. See 221
Term Life Policy, 180
The Journal of Light Con- Y
struction, 139
Thousand Hours of Plan-
ning, 34, 170
Z
Three Bids, 30, 44, 91, 269
Title Insurance, 109, 124, Zoning, 48, 131, 181
134, 173
Tools, 190
U
Underestimate, 9, 106, 209
Upgrade, 1, 23, 61, 70, 93,
142, 149, 189
Utilities, Temporary, 158
W
Waiver, Lien, 25, 177
Warranty Deed, 168
Wealth-Building, 13
Why Plan?, 33
Why You Need to Be On Site,
200
Work-at-Home, 84
Workman’s Compensation,
90, 177, 228
Workmanship, 7, 164, 218
Workshop, 104, 136
Work Schedule, 156
Written Budget, 105, 141,
151, 191
Written Schedule, 151, 163

250 • Index
Project Notes

Movie • 251
“The movie they made in the Riverbottoms house”
Appendix
I was in my office in the house last summer working on the fourth edition
of The Owner-Builder Book when a young man came to the door with a flyer.
He handed it to me and waited expectantly while I read:
“FEATURE FILM TO BE MADE LOCALLY”
“Dear Homeowner:
The Locations Department for Together Again for the First Time, a
feature film about a family who is reunited at Christmastime has chosen
your home as a possible candidate for the film’s principal location, the
Frobisher family home. We love the style and design of your home, and
would like to hear back from you if you are interested in participating in this
project. First, let us give you some more details:
What we need:
An American-style home with two bedrooms or more
When we would need the home:
The Owner-Builder Book On-Line: OwnerBuilderBook.com

252 • Movie

Three to four weeks from June 26 – July 22
Appendix
6 days a week (no Sundays)
What we could offer you:

Monetary compensation
An insured production and crew
The owners’ name in the credits
Parts in the film as extras
Being involved in the process of major motion picture
filmmaking
Opening your home to experienced and professional actors”
I felt a flutter of owner-builder pride, but dismissed it upon realizing that this
was a flyer brought to more than one house in the neighborhood. I said, “I
doubt you want my house.” He said that it actually seemed to fit the criteria
and asked if he could take a look. I asked him what he was looking for, and he
said, “A great room with high ceilings, a breakfast nook, a traditional look, and
a grand staircase.”
We showed him in, and he took a look around. I said that since we didn’t have
a grand staircase, we probably wouldn’t fit, but I knew someone who did. So
I walked him two blocks over to the home of Jeff Lewis, our webmaster, and
owner-builder extraordinaire. He thanked me, and I forgot about it within two
quick strides, returning to my office and back into editing.
That night, Jeff Lewis was meeting with me on website development when the
doorbell rang again. This time two women introduced themselves as location
managers for the film, and
wondered if they might take
pictures of the inside of the
house. I let them in, said “Have
at it,” and returned to my
meeting with Jeff, rehearsing
to him the showing off of his
house to the first visitor. Jeff
just smiled at the compliment
and we were soon lost in the
work again. By the time the two
visitors interrupted us later,
nearly an hour had passed.
Call Toll-Free: 1.888.333.BUILD The Owner-Builder Book

Movie • 253

“We like your house. Would you you,” she said. I watched her in some
Appendix
consider letting us make a movie amazement as she went directly to
here?” We were standing in the entry negotiating with me the terms of an
brightly illuminated by overhead “agreement.” Finally I stopped her
lights usually turned on when we and said laughing, “You think about
had guests. “I guess we’d consider it. it — we wouldn’t want to talk specifics
I’d have to talk to right now.”
Elaine. She’s very
fussy about the Jeff and I went back
house.” I couldn’t to work, but now it
resist asking who seemed to occupy
would be in the my thoughts. A
movie. She named couple of days
people I recognized later, working
like Patty Duke in the garden, I
and David had the thought
Ogden Stiers. I that it might be
recognized the interesting for our
name, although book and website
he is more widely to have the
known by the experience. I also
name Major thought that the
Charles Emerson house would need
Winchester III some sprucing up
from M.A.S.H. I if it would be on
had admired him display, and got
as the narrator busy handling
of my favorite book on tape, a Clancy the long-delayed chore of repainting
novel called The Cardinal of the the capitals over the front windows.
Kremlin. We had some flowers to plant, and
within a week, the house looked nicer
She mentioned a “hunky” actor named than usual from the street. I was just
Joey Lawrence, “…but we call him reconditioning the last shutter on the
Joseph or Joe, according to contract.” front when a car drove up on a Friday
I was apparently too old to know morning, and a group of preoccupied
of his extensive work on television movie people piled out.
such as a long run on a show called
“Blossom” where his character Joey They hardly seemed to notice me as
Russo was known for exclamations they studied the house, and talked
of “Whoa.” “Here’s what we can offer with each other. They kept using their

254 • Movie

hands as viewers daily maintenance
Appendix
to frame the house cleaning at the

from various site.
perspectives
as they talked. He asked me if
Two other the money offered
vehicles pulled would be acceptable.
up, and about I had already
a dozen people determined not to
talked excitedly. accept money; we
They presented pay enough taxes
themselves at the door, and showed a as it is. I asked him if they could
great deal of deference and friendliness offer film editor support on our DVD
to Elaine and me as we invited them in. development project instead. He had
This time, the director was with them, no problem with that and seemed
and they spent an hour and a half flexible and “creative”.
studying the house, and discussing
specific scenes in detail. I dispensed At the end, the director stopped to talk
cold cans of soda and stayed out of the with me for a moment and said, “I like
way. your house. It fits our story.” I told him
that I was very proud of it, and that
After about an hour, the “unit we had “built it ourselves.” He said
production manager” took us aside they would get back to us. As they left,
into the parlor and asked what our the production manager stepped back
concerns would be about the use of the up to the door, and said, “Just so you
house. I brought up several issues like know, the leaves would have to come
how would the house be treated, how off your maple tree – it’s a Christmas
would it be maintained through the movie, you know.” I exclaimed aloud,
process? He took notes and listened “Oh no – that’s my baby! You’d have to
respectfully. He said that floors would agree to replace it with an ‘equivalent’
be protected with “furny” (furniture) if it doesn’t survive.” He nodded and
pads and sheets of plywood. He said smiled. “We’ll talk.”
that in previous projects, no insurance
claims were filed, just a simple Now Elaine and I talked seriously about
replacement of a bit of carpet burned in the possibility. She was hesitant, and
an electrical overload of some camera I understood completely. We wrote out
cables. That was the worst he’d heard our concerns. How would our home-
of. He assured me that they would based business be conducted? What
agree to a deadline for cleanup and would be the effect on our insurance?
restoration, and that there would be We’d call the agent. Nobody was going

Movie • 255

agent’s company. The homeowner’s
Appendix
policy would in no way, shape, or form
cover 100 people on our property for a
month with elaborate equipment and
monster power generators. And the
company didn’t want to be named in
any claims that might occur, even if
my coverage was “dormant”. So they
planned to cancel my policy outright.
They further said that they would not
reinstate it if any claim were made
to any insurer during the course
of filming. They didn’t want to be
implicated.
to smoke on site, were they?
The movie company had never heard
of this one before. They went back
The Location Agreement
scratching their heads and did a lot of
homework. To their credit, they came
Within a short time the unit production
up with creative solutions to each
manager was back with a location
point I raised. For instance, the next
agreement for us to sign. It was an
version of the agreement came back
interesting read; I found it well-suited
with the maple tree named, and “if in
to the interests of the movie company,
but light on homeowner concerns.
It’s the same kind of risk an owner-
builder takes when a contractor
provides him an agreement for work to
be performed. The agreement usually
features the interests of the offering
party. Nothing was said about the
maple tree, for instance. Nor about the
DVD consultation. And there was no
certificate of insurance showing what
their carrier would cover.
the judgment of both parties it needed
I asked them to rework the agreement to be replaced” the company would pay
on several points and dropped a bomb for an “appropriate tree” to replace it.
on them – my insurance would be I asked for a date for the decision, for
canceled when the project started. sole discretion as to replacement, and
That’s what we learned from my

256 • Movie

an “equivalent” tree.
Appendix
One the third version of the agreement,

the “tree”
paragraph
read:
“Furthermore
and specifically
if the Norway
Maple, located
in the front, or
west yard of
the Property, Elaine had grown comfortable with
is deemed by the project and the caliber of the movie
April 7, 2007, unhealthy because of to be made, and we both agreed to the
the filming process according to the deal.
sole discretion of the Owner, then the
Why They Chose
Producer will replace the tree with an
Our House
Owner-approved equivalent tree.”
After filming
A very “can do” associate producer
the director
on the project creatively reworked
called our house
the agreement to our satisfaction.
“the perfect
He included deadlines for all agreed
house” for the
film company responsibilities like
movie. It didn’t
restoration of the property and
have the grand
reimbursement of company-paid bills,
staircase he
like electrical utilities, in a prompt
wanted, but our
manner, with penalties of so many
second-story
dollars per day for each day of delay.
bridge...
They offered some nice benefits like
payment for a hotel and meals at any
(Continued at
time at our discretion to “escape” the OwnerBuilderBook. Kirby Heyborne
movie project. com): Larisa Oleynik
The maple tree fights back Joe Lawrence
Best of all, they engineered a legal Christmas in July The Governor visits
agreement with my insurance company Patty Duke leaves the Mark and Elaine get a part
that would prevent cancellation of our movie The damage estimate
coverage. Very impressive. By now, David Ogden Stiers Photo Gallery

Special Reports • 257
Special Reports
H ere are 39 popular construction topics with essential advice from hundreds of owner-build-
ers to supplement The Owner-Builder Book, provided for you in a nifty spiral-bound lay-flat
format. These reports are updated frequently, and custom-printed for you at the time of shipment.
New titles are added in response to reader request. Individual reports are downloadable at Owner-
BuilderBook.com. Additional coupon savings for our website bookstore are found on page 274.
The Owner-Builder Book: Special Reports

Special Price: $29.95
L aced with several hundred new comments and suggestions by people

actually building, here’s a collection that could save you a thousand
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Here are the fea-
tures we chose for the “How to save 90% of the cost
Resource Guide
Riverbottoms house on of landscaping”
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features that had the most impact on house quality trades, and you don’t need to be
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258 • Special Reports
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and worst things they did”

260 • Special Reports
Special Reports
“Construction bargain “How to pre-wire”
strategies for the com- One of the easiest things
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you need to for any part ticated entertainment
of your house project? and computer needs. We show you how to add a lot
Sometimes amazing savings can be found. Just one of value to your house for very little. (SR-29) $1.49
of these strategies may save you thousands of dol- download.
lars. This compendium of strategies is excerpted
from our Bargain Strategies book. This triple-length
report is priced at $2. (SR-25) $2 download. “How to build a log
home for $60 a square
“Owner-builders on desirable house features” foot”
Here are the hot features owner- One of our readers has
builders around the country recom- done it. Read the story of this family’s approach
mend. You’ll find the features that and just why most custom log homes have gotten so
distinguish a custom home from a expensive. (SR-30) $1.49 download.
mere step-up house. Some of these
features are a bargain that can add
appreciably to your house value.
“How to buy furniture at
(SR-26) $1.49 download. factory prices”
Resource Guide
When it comes time to

furnish your new home or
“How to paint your house like a professional” addition, we hope you’ll
We saved $8,000 paint- continue to beat the system
ing the inside of our by filling it with beautiful furnishings that you got
house, but we learned for incredibly small dollars. We travel to the fur-
the hard way that it can niture capital of the world in North Carolina and
take a great deal of time. show you how to buy “professionally”. (SR-31) $1.49
Here are the steps to download.
follow, and the materi-
als and tools to buy to do it efficiently. (SR-27) $1.49
download. “Ideas if you use a gen-
eral contractor”
“How to sell by owner” Features contract advice if
After we moved into the Riverbottoms house we you decide to use a general
sold our old home. A Realtor contractor. Especially valuable are many reader
told us our price was much experiences and comments included that could save
too high, but that he would you money and heartache. (SR-32) $1.49 download.
sell it for a lower one and
take his commission. Here’s “How to buy land”
how we sold it at our origi- This report develops a
nal price and kept the commission. (SR-28) $1.49 subject not covered in
download. The Owner-Builder Book,
getting the land on which

Special Reports
to build. Not easy to do if it’s scarce or expensive year. Common alternative materials include: foam
– or both. We show you how. Includes many reader insulation/concrete (ICF’s), insulation/sheathing
comments and suggestions from those who’ve been (SIP’s), compacted earth, steel and a variety of recy-
there. (SR-33) $1.49 download. cled materials. (SR-36) $1.49 download.
“Making your addition or “Steps to better home

remodel easy” design”
New report about the most A professional designer
common type of owner- brings your ideas together
builder project, the remodel in a harmonious way
or addition. There’s incred- that meets your needs. Designer Dale Booth offers
ible money to save for the wise. Check out the pro- advice to get the most from the design that you will
fuse reader advice in the sidebars. (SR-34) $1.49 live with. (SR-37) $1.49 download.
download.
“Healthy house fea-
“Green building for owner- tures and materials”
builders” Many people have reac-
This bonus report is twice the tions to common build-
length of our average piece, and ing materials. This
guest authored by design genius Dale Booth of report shows you how
Tucson, AZ. A coauthor of a recent self-contract- to select materials and technologies that make a
Resource Guide
ing book, he has also published a newsletter on healthy environment for you and yours. (SR-38)
renewable development and designed many bril- $1.49 download.
liant environmentally friendly homes. (SR-35) $1.49
download.
“New building codes and
“Alternative building the owner-builder”
materials for the owner- Starting in 2002, a new
builder” universal building code
A hundred years ago most began to spread all over the
houses were constructed by U.S. It will eventually be
either lumber or masonry. Today, there is a growing adopted by every municipality. The new code will
multitude of building formats with more added each enforce many standards that used to be optional.
Know the code! (SR-39) $1.49 download.

262 • Bookstore
Bookstore
The Owner-Builder Book Series
The Owner-Builder Book: How You Can Save More Than $100,000 in the Construction of
Your Custom Home • 4th Edition by Mark A. Smith and Elaine M. Smith
The Owner-Builder Book: Special Reports • How Owner-Builders Build More for Less • 4th
Edition by Mark A. Smith and Elaine M. Smith
See page 257 for a synopsis of our 39 sections addressing topics essential to owner-builders. Gor-
geous four-color print-on-demand collection of subcontractor interviews and hundreds of O-B
Resource Guide
suggestions for building a better house for less.

The Owner-Builder Book: Construction Bargain Strategies • How Owner-Builders Save
35% • 1st Edition by Mark A. Smith and Elaine M. Smith
See page 131 for excerpts from our collection of over 400 ways to save money on your project.
Almost any aspect of construction has been done by some bright O-B for a lot less than you’re think-
ing. Some ideas could save you a year’s pay on your house. How many will you be able to use?
The Owner-Builder Book Series Electronic Books (Adobe® PDFs)

List Price: $19.95 & 29.95 Your Price: $9.95 & 14.95
Now you can download the entire Owner-Builder Book Series for viewing on computer. This elec-
tronic versions are a fully searchable PDFs. You can search on a concept, a word or a fragment of a
word to find what you need in the books. You can “click through” to hundreds of Forum threads
to join in the conversation and get the information you need. You can also print pages or cut and
paste charts, tables, lists, etc. into your own computer files. A great asset to the reader.
Downloadable Downloadable Downloadable
PDF PDF PDF

Bookstore • 263
Bookstore
Be your own Home Renovation Contractor:
Save 30% without Lifting a Hammer Revised and Updated
Author: Carl Heldmann
Pages: 165 (with 106 pages of text and the rest Appendices)
Cover Price: $16.95 Your Price: $9.95
Good information about how to find and evaluate an older
structure to determine if it is economically feasible to renovate.
Discusses why an ordinary person is as qualified as anyone to manage a remodel.
Good section on how to evaluate a structure to determine if it is a steal or a money
pit. Uses an interesting system for getting a “ballpark” figure for remodel costs.
Appendix J is good information when defining trade specifications.
Be Your Own House Contractor: Save 25% without Lifting a Hammer

Author: Carl Heldmann
Pages: 137
Carl Heldmann, a construction loan consultant in Grand Rapids, Michigan
presents a “can-do” attitude in this book. Heldmann’s background is that of
contractor, but he presents the information in a non-technical, non-intimi-
dating style. Strong on financing because he has a consulting business with
loan institutions. Good info on subcontractors and suppliers. Common
sense information about building and scheduling.
Resource Guide
Better Houses, Better Living: What to look for when buying, building or
remodeling
Author: Myron E. Ferguson
Pages: 337
Here’s another nice guy’s book that has made it big. Myron Ferguson maintained
category bestseller status for years with his book Build It Right!, and now has
replaced the title with Better Houses, Better Living. And it is indeed better. He lays
out for you all the subtle things that go into making a quality house. Not neces-
sarily expensive, but thoughtful, and what a difference it makes! So many things
that most of us don’t see at first that make a house sound and satisfying.
The Complete Idiot’s Guide to Building Your Own Home

Author: Dan Ramsey
Pages: 288
Dan Ramsey is the distinguished past president of the National Association of
Home and Workshop Writers which honored The Owner-Builder Book with
a Silver Hammer Award. He is possibly the dean of the Home Improvement
writers and has 85 books to his credit. This is a neat book with moneysav-
ing tips, called “Ka-Chings” and Cautions, called Code Reds. Dan has tons of
experience and has assembled much to fascinate, inform and guide you as an
owner-builder. The book is attractive and fun to read.

264 • Bookstore
Bookstore
Build Your Dream Home Habitat for Humanity How Everything You Need To
For Less to Build a House Know About Building the
Author: R. Dodge Woodson Author: Larry Haun et al Custom Home: How To Be
Pages: 185 Pages: 288 Your Own General Contractor
Cover Price: $18.99 Cover Price: $24.95 Authors: John Folds and Roy
Your Price: $11.39 Your Price: $14.95 Hoopes
Pages: 226
It’s refreshing to read a book A beautiful, easy to read book Cover Price: $15.95
on self-contracting written that gives you all the basics of
Your Price: $9.95
Resource Guide
by a professional in the field the construction process. Being

of construction that reveals Habitat people, they know how A real estate attorney gives
some trade secrets that help to build economically, they’ve owner-builders advice and
those who want to owner- done it a million times. Of direction on what you need
build. Like most profession- course, they have a contrac- to know to build your own
als he gives a detailed list of tor bias, but leave the option home. The book provides a
definitions, e.g. pine siding, of being your own contractor legal point of view on financ-
cedar, hardboard, vinyl, T1- open. Lots of practical advice ing, contracts, zoning laws,
11 siding, etc. with an orientation toward self- appraisals and liens. Provides
work. the elements of an effective
contract between owner-
builder and subcontractor.
Offers a detailed section on
land selection and all the
legalities involved.
Make Your House do the Housework

Author: Don Aslett
Pages: 190
Good advice for making the design of your project compatible
with reduced clutter, easy cleaning, and low maintenance. We’ve
read several of Don Aslett’s books and couldn’t resist offering
this one which has the potential of making your life as a hom-
eowner much easier for years to come.

Bookstore • 265
Bookstore
The Complete Guide to Contracting Your Home: A step-
by-step method for managing home construction
Authors:
Dave McGuerty & Kent Lester
Pages: 316
Cover Price: $18.95
Your Price: $11.38
This book lays out each step of a
construction project and gives
sample specifications for the
category. It then gives inspec-
tion items for that category and
a checklist for preparation prior
to starting the category. Loaded
with tips and ideas to make the
work go smoothly, was the best-selling book in the self-contract-
Your New House: The alert con-
ing category before The Owner-Builder Book surpassed it in 2004.
sumer’s guide to buying and building
Includes a valuable master plan and project schedule that lays out
a quality home.
all the steps of building in an understandable sequence. A good Authors: Alan & Denise Fields
background in construction for anyone and a must-have refer- Pages: 356
ence. Cover Price: $15.95
The Well-Built House: Everything you Your Price: $9.53
Resource Guide
need to know before building a new house or A wonderful grounding in all new
remodeling an old one home issues. This book will save
Author: Jim Locke you all kinds of money and prob-
Pages: 302 lems when you build. Lots of eye
Cover Price: $16 catching graphics and juicy sto-
Your Price: $9.59 ries, sidebars, and illustrations.
We normally don’t carry books written by The entire book is a testament to
general contractors because of the indus- why you should owner-build, with
try bias, but we have to make an exception plenty of advice that will help you.
here. Jim tells the story of how a house We defy you to read the table of
is built, step by step, and explains the contents without constantly flip-
“proper way” to do each step. He has an ping to sections of the book to get
impeccable sense of quality construction technique. This is the easi- the scoop on pertinent subjects.
est to read “basics of construction” book we’ve seen, with abundant
wisdom on building to last.
Houses are Designed by Geniuses & Built by Gorillas

Author: Bob Johnson • Pages: 240 • Cover Price: $18.95 • Your Price: $11.38
We’ve always loved the “Gorilla Book”. Bob is a peripatetic contractor, man-
ager, and industry consultant. The man knows how to write and applies his
genius skills to make this book enjoyable, and we feel, a classic. Our readers
have always enjoyed this book. It teaches you what you are in for as a man-
ager of your own construction project, and gives plenty of wisdom on how to
finesse it. Bob’s “War Stories” of construction advice that sidebar many pages
are fun to read and help you learn how to stay out of trouble.

266 • Bookstore
Bookstore
Double Combination 1:
The Owner-Builder Book: Special Reports with The Owner-Builder
Book: Construction Bargain Strategies
List Price: $59.90 Your Price: $49.95
If you’ve read The Owner-Builder Book, the next two most important
books to read are right here. All three are based on owner-builder
experience and intelligence, a far cry from the contractor-based
books that populate our market segment. You’ll learn quality and
savings techniques that will change your house and your life. Four-
color print-on-demand books you will treasure.
The Well-Built House with Better Houses, Better Living
We call this the “quality combination”. These two authors are a
little nutty like owner-builders invariably are — insisting on a
better or the best way to implement their design — for long life, for
comfort, and for value. Read these guys and get a feel for how much
better you can make you home work well for you.
Resource Guide
The Complete Guide to Contracting Your Home with The Owner-
Builder Book: Special Reports
These two are a good combination for developing specifications or fea-
tures for your house project. Both books go through each major trade
or specialty and tell you what to think about to improve it. In The Com-
plete Guide, sample specifications are shown. In Special Reports, inter-
views with tradesmen are shown along with hundreds of bright ideas
and cautions from concerned owner-builders.
Your New House with The Owner-Builder Book: Construction Bargain Strategies
We think Your New House is a valuable, enjoyable read. With our Bargain Strategies
book, it makes a good combination for ingenious savings, sensible design, and con-
struction confidence. These two books lay out the financial ins and outs better than
any others in the field.
More product combinations available in our Bookstore.

Bookstore • 267
Bookstore
Super Reader’s Library:

Further discounts on the most popular self-contracting books
We think the Special Reports and Bargain Strategies books con-
tain more practical wisdom and money-saving ideas than any-
thing else in print. Combined with the best owner-building
books available, it will give you a very solid background in both
money saving and quality construction before you build.
The Whole Enchilada:

List Price: $424.13 Your Price: $229.95 (Price changes as new products are included.)
The Whole Enchilada is the complete set of all the books and DVDs we produce and recommend. Why
not absorb it all before you build? The stakes are high, and you could profit — now — from the knowl-
edge you’ll gain. We’ve found many new ideas in every one of these publications that help you build
better, smarter, and at greater savings EACH time we’ve reviewed one of the titles in our collection; i.e.,
you miss things when you go through only once. If you plan to build again you’ve got the library of the
most useful self-contracting books and materials in print. If you only build once, you are the resource for
friends and family. Or, what’s to stop you from donating the whole collection to your public library when
you finish and claiming a tax deduction for the retail value of the materials?
Resource Guide
Bonus: All of the PDFs
in The Owner-Builder
Book Series included
free, along with The
Owner-Builder Book
Downloadable MP3’s
and The Owner-Builder
Workshop Download-
able MP3’s. (A $117.75
value.)
III. Spread-
III. Spread-
I. 1,000 V. Three Bids
VIII. How to
IV. Written
VI. Signed II. Writ- Workshop
IV. Written s on DVD
Video

268 • DVDs
DVDs
Introducing:
“The Ten Commandments of Owner-Builders How-To” series on 12 DVDs!
Complete 12-DVD “Ten Commandments
I. 1,000 Hour
s of Planning of Owner-Builders How-To” Series
Cover Price: $175.50 Your Price: $99.95 (When complete)
Brand The complete set covers all ten of the most crucial skills and activities for
New!
success in owner-building. Each DVD contains tours, interviews, tutori-
als and at least one “$1,000 Idea”, which you can actually use to save more
than $1,000. Special features include: factory visits, book reviews, internet
highlights, computer and spreadsheet demonstrations. Also available in
MP3 and MP4 formats for portable replay devices and computers. (Series
not complete at time of publication.)
I. 1,000 Hours of Planning (3 DVD Set!):

urs of Planning
I. 1,000 HI.o1,0
00 Hou
I. 1,000 Hours of rsPlanning
of Planning
Disc 1 of 3 Disc 2 of 3
Resource Guide
Nearly 100 planning steps to make your project a success are covered in
this set of three DVDs. You’ll find out how to get a construction loan,
develop specs for each trade, lay out a preliminary budget, interview subs
and vendors, and find all kinds of bargains for your projects with live
tutorials, tours, and interviews. You’ll meet two families that pulled off
huge savings building beautiful homes, and one working through the
process of planning. Shows you with cool DVD technology how to plan to
make your project easy. Several “$1,000 Ideas” included. See highlights.
II. How to Make a Written List of Features

II. Written List of Features
The right features make a “house that works” and one that sells more
quickly than others when it’s time to move on. Meet one family that
worked through a remodel and addition adding features that increased
value and livability. Meet another who decided to sell after two years and
got asking price when other houses were not selling at all. What features
work, and how to plan for them at a savings. Visit a Parade of Homes
with a look at “mandatory” features that pop up in each price range. See
highlights.

DVDs • 269
DVDs
III. How to Create Your Spreadsheet Budget
III. Spreadsheet Budget and
Expense Tracking
The biggest bugaboo of owner-builders can be really easy and satisfying

– building a spreadsheet budget to control your project. Here we show
you how to do your spreadsheet in detail. Starting with the budget tem-
plate from the Free Download Gallery, you will gain confidence using a
spreadsheet to plan and control your project. Your cost to build doesn’t
have to be a mystery! Meet a couple who got good at it and who used cre-
ative bartering to save a ton on their home. See highlights.
IV. How to Create Your Written Schedule

IV. Written Schedule
Resource Guide
After written features and budget, the third principal task of an owner-
builder is a written schedule. Meet a couple of owner-builders who broke
the code and built faster than the average general contractor. How to
use our software template to build a computer schedule. How success-
ful owner-builders get cooperation from subs and vendors to make the
schedule come true. Practical and money saving ideas from a 25 year old
owner-builder and a tour of the amazing custom home that brought him
a quarter million dollars in equity. See highlights.
V. How to Get Three Bids from Subs and Suppliers

V. Three Bids on All Sub and

Supplier Items
Visit a seven-time owner-builder couple from Tennessee who made $100,000

on their last house. Learn their system to make it enjoyable and profitable
every time. How to get and negotiate good bids from both subs and vendors.
How to find qualified bidders. How to get enough bids even in a busy market.
How to handle the paperwork of bidding in a timely way. Also meet first-time
owner-builders who managed to build an outstanding starter home for less
than $30 a square foot. (Not released at time of publication. Check our bookstore for
availability.)

270 • DVDs
DVDs
VI. How to Make Good Contracts and Lien
Releases
VI. Signed Agreements and List Price: $15.95 Your Price: $10.95
Lien Releases
When you sign on your chosen subs, what written agreements and forms
do you need to protect yourself and facilitate a smooth process? How do
successful O-B’s go about it? Meet one from Arizona who has owner-
built several times and is approaching the “tax-free limit” of a half-mil-
lion dollars of tax-free gain in a single project. You’ve gotta see this house.
How to manage the paper and the money and get what you expect. (Not
released at time of publication. Check our bookstore for availability.)
VII. How to Buy Materials Directly

VII. Buy Materials Directly
Resource Guide
Here’s where we meet a vendor turned owner-builder from Idaho who

knows a lot about procuring the products and services you’ll need to
build at a big savings. Husband and wife have a flair for self-work too,
and demonstrate for us their tile and electrical work. How to buy mate-
rials direct and arrange the labor-only services that make for smooth
construction and a quality home. Visit another family who saved money
building a custom home with Structural Insulated Panels. (Not released at
time of publication. Check our bookstore for availability.)
VIII. How to Communicate with Subcontractors

VIII. How to Communicate
with Subcontractors
John and Jessica Norton, owner-builders who kept a job diary with
photos on our website, show us their completed home and describe their
ingenious strategies for getting the right subs and keeping them on task.
Communication via email, fax, telephone and internet brought them
very good job control for first-time owner-builders. How they settled a
potential subcontractor disaster. How to set up a program to keep the
subs happy and get you a better house for less. (Not released at time of publica-
tion. Check our bookstore for availability.)

DVDs • 271
DVDs
IX. Why You Need to Be On Site
III. Spreadsheet Budget and
Expense Tracking
Elaine and Mark Smith tell the story and show footage from the building
of the Riverbottoms house. How to get involved in construction to build
it right. Opportunities for savings that you miss as an absentee man-
ager. How to keep your job and still build your house on schedule and on
budget. How to enhance your house “behind the walls” for added func-
tion and value at little cost. Also tour a log home under construction and
learn from a hands-on woman owner-builder. (Not released at time of publica-
tion. Check our bookstore for availability.)
X. How to Run a Clean, Organized Job

IV. Written Schedule
Resource Guide
Gary and Linda Ziser tell how they built their lakefront home in under
four months with impeccable quality and serious savings. How veteran
owner-builders do it smoothly and sanely. Your daily duties as general
contractor. How to keep costs in check. How to check each aspect of
the work for quality. How to keep the subs showing up on time. Special
Bonus: How to sell by owner for huge gains, even in a down market. (Not
released at time of publication. Check our bookstore for availability.)
The Owner-Builder Workshop Videos on MP4

deos on DV D
Workshop Vi Our original DVD series doesn’t have all the bells and whistles that our newer
DVD titles have, so we are phasing them out but keeping this product as MP4,
viewable on your computer or portable viewing device. You can even burn DVDs
from it if you like. The class is loaded with 6 hours of entertaining instruction.
Mark and Elaine instruct a lively group of 81 owner-builders, half of whom had
previously owner-built. The workshop teaches how to do a budget, how to develop
a schedule and how to make it all work. See highlights. Also available on MP3 for
portable listening devices or your computer.

272 • OwnerBuilderBook.com
OwnerBuilderBook.com
We put together a website because owner- Reader Forums
builders need a place to share enthusiasm and blow Readers have contributed thousands of pages
off steam. Come to our site to find the ideas of many of commentary of interest to all owner-builders.
other O-B’s. Let us know where you find bargains,
how you solve problems, and what you’d never do
the same way again.
Owner-Builder Connections
Through this editor-moderated address-
blind utility, you can safely contact other owner-
builders in your own Postal Code or near you.
Just click on your state or province, and choose a
registered user by location and send a message.
Search Command
A search on even an obscure construction
terms can yield dozens of threads where you can
learn more. The advanced search gives you lots of
fine tuning research options.
Resource Guide
Construction Journals
Free Newsletter Hundreds of reader blogs give you a good
Use our website to register for our electronic
feel for the experience of owner-building in all parts
newsletter. The newsletter will be sent to you via
of North America. Consider placing your notes on
email two or three times a year.
the site from an early point in the process.

Free Download Gallery • 273
Free Download Gallery

Download Gallery The document is downloaded to your desk-
All of the forms, legal documents and top. Name it and save it to your hard drive. Custom-
spreadsheet templates used in this book, along with ize it to your project any way you like.
many more are available for free download in our
bookstore. Choose from a list or contribute one of
your own.
After using the downloads, comment on

their usefulness for the benefit of other readers.
Click through to a sample screenshot of the
template and decide if it’s what you want.
Resource Guide
User Links
Thousands of links recommended by our
users are displayed in table form with popup win-
dows to give you a peek at the referenced site. You
Sign in to download. This requires only can also click through to the forum thread descrip-
your name, location, and email address. tion of the link.

274 • Paperless Coupons
Paperless Coupons
Do Not Tear Out • Just Enter the Coupon Code on our Website
$15 off FREE! FREE!

II. Written
Features List of
Downloadable Downloadable
PDF PDF
The Owner-Builder Book Electronic Electronic Download of a single Any DVD. Limit One. Use singly
Download. Use singly or on The Special Report (Adobe® PDF file). or to reduce the price of any DVD
O-B Book Electronic Combination. Limit One. Combination.
Cover Price: $19.95 Cover Price: $5 Cover Price: $15.95

Special Offer: $4.95 Special Offer: FREE Special Offer: FREE
You Save: $15 You Save: $5 You Save: $15.95
Coupon Code: 042173 Coupon Code: 092273 Coupon Code: 121997
Resource Guide
Look for more coupon specials in our free email newsletter
FREE! $5 off FREE!

de os on DVD
Workshop Vi
Any single Owner-Builder Work- Any single book in our Bookstore. Any single MP3 product we offer.
shop Video on MP4. Use singly or Limit One. Not usable on combi- Use singly or to reduce any MP3
against any MP4 combination. nations. combination price.
Cover Price: $10.95 Cover Price: Various Cover Price: Various

Special Offer: FREE Special Offer: $5 off Special Offer: FREE
You Save: $10.95 You Save: $5 You Save: up to $18.95
Coupon Code: 041598 Coupon Code: 091076 Coupon Code: 090744

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The Owner-Builder Book:

The Consensus Group, Inc.

Toll Free: 1.888.333.2845

“It makes sense that you make your money in planning.”

The Owner-Builder Book

The Owner-Builder Book

The Owner-Builder Book

“I do property management, and I know that preparation is everything.”

The Owner-Builder Book

“It was very well-written. I liked the summary level detail.”

“The book reinforced our thinking that this is all do-able.

The Owner-Builder Book

Letter to the Reader

We decided to write a book that would tell you “yes”.

Don’t let anybody tell you you can’t do this.

The Owner-Builder Book

Chapter 2: Learn the Wealth-Building Secret..................................... 13

Chapter 3: General Contractors Aren’t What You Think They Are... 21

Chapter 4: You Can Manage Better Than a Contractor.................... 31

The Owner-Builder Book

Chapter 5: You Will Profit By Building a True Custom Home............ 51

Chapter 6: Conquer Details Room By Room and Save 20%............. 69

Chapter 7: How to Get the Subs on Your Side.................................... 85

Chapter 8: How to Build a Budget That Is a Powerful Miracle Tool 95

The Owner-Builder Book

Chapter 9: Commando Shopping Techniques.................................. 119

Chapter 10: How to Schedule the Work at a Savings.............. 151

Chapter 11: How to Make Your Lender Swoon................................ 165

Chapter 12: Paperwork Before You Begin........................................ 175

The Owner-Builder Book

Chapter 13: Six Months to Victory.................................................... 185

Chapter 14: Smooth Execution Saves Money & Improves Quality....197

Chapter 16: If You Decide to Use a Contractor................................227

Afterword: Once You’re In.................................................................237

Minimize Punch List........................................................................................................................................ 237

Appendix: “The movie they made in the Riverbottoms house”...... 251

The Owner-Builder Book

The Owner-Builder Book

area and just com-

The Owner-Builder Book

The Owner-Builder Book

wanted without Lowering The Threshold

The Owner-Builder Book

The Owner-Builder Book

The Owner-Builder Book

The Owner-Builder Book

appliances, etc.). “You Have to Have a License”

The Owner-Builder Book

The Owner-Builder Book

The Owner-Builder Book

Qualifications of an Owner-Builder Construction crews were still in Andy’s neigh-

The Owner-Builder Book

The Owner-Builder Book

The Owner-Builder Book

The Owner-Builder Book

Moved into house

The Owner-Builder Book

The Owner-Builder Book

Retirement Plan Readers Say

The Owner-Builder Book

The Owner-Builder Book

The Owner-Builder Book

Readers Say Guerilla Economics