I want to find out if anyone knows how much more cheaper (percentage or range) it is to build a house on your own (hiring contractors) versus hiring a builder to build it for you. I know that it depends on the materials, on the contractors, plus other factors which may influence the price. I also realize that it is less hassle to have a builder take care of the building and the hiring of the contractors. I have a little bit of a hard time believing this...but my husband says that we can build on our own without a builder, to be cheaper by 50% (half) of what you'll pay a builder. We want to build affordably and to get more for our money. My husband is pretty handy and is confident with the building process to not use a builder. Thanks!
I have not done this personally, but I do know someone who has and he said the same thing...the cost is half what a builder would charge. If you think about it, the builder has to make money in addition to all the contractors, so if you cut out the middle man (builder) you save a bunch of money. So, if your husband is a handy man like mine, I say go for it and feel good about it! How exciting!
I say listen to your husband. Being a handyman tells me he has friends that are also. Men have this code system down to a tee where us women don't. They trade off specialties. So on top of leaving the middle man out he may even save more money than 50%. My brother is an electrician and my ex is an ac man so when we built our houses we did alot free. My brother wired our house and my husband did their ac. Then since my brother and my ex had men who owed them a favor got the plumbing done and carpet laid ect. I say go for it you may even save more money than you think.
I FEEL SO SORRY FOR YOU! My husband did the same thing and prepared his own blue prints and hired his own contractors when he built our rental property. IT WAS A LIVING NIGHTMARE. Not because he couldn't do it, but because he had a regular job and had to built on spare time. I thought we would never get done and then when we were approaching the end, my husband was so stressed and tired that he didn't do the best job at the end as far as the trim is concerned around the windows. Now the tenants we have living there are suffering with mildew. My husband did alot of the work himself and only hired contractors for the stuff that needed permits. We of course went over budget and it would have been easier to hire a builder. My husband lost so much sleep and there was a lot of tension. Don't do it. If you really want some names of some reasonably priced builders I can refer you to my brothers who are also frame contractors but who are also full blown builders on the side. They've bought land and built homes for sale. They are small time so they would probably work something out with you because they will want your business. Don't get me wrong, they do a super great job on their homes. They have been in the constructions business for over 20 years and my father has been in the construction business for over 50 years. Good luck.
Hi M-
Tom Tynan used to teach a course about being your own building contractor. It was a very imformative course, and I would recommend it if you want to be your own contractor, or want to determine whether that would be a good idea for you. I don't know whether the course is still offered, but a little internet research should turn it up if it is. There are plenty of traps for the unwary. I found the course helpful, even though I intended to hire a contractor. I understood better what I was getting into.
Many contractors build on a "cost plus 15%" or "cost plus 20%" contract. So on the surface it appears that you would save about 15% on the cost of building the house. A cost plus contract doesn't provide a lot of incentive for the builder to save construction costs, since he/she actually makes more money if the costs are higher. But competition among builders and among subs helps to keep the costs down. Builders who do a lot of repeat business can negotiate better prices with subs than a one-off negotiator (like you), and they know who the quality subs are. In real estate development booms like we have been esperiencing, good subs are in short supply.
There will be an "as built" appraisal for financing purposes and the lender won't lend more than a percentage of the appraisal - another cost constraining factor.
My husband built a house as his own contractor. I asked him if one could save as much as 50% by being your own contractor. His response was "Heavens,no!" He said you could save about 15%. If you had the skills to do some of the work yourself, you could save a little more.
There are a lot of other risks to consider in building your own house. Check out what kind of insurance is available to you when you aren't in the business. Builder's risk insurance may not be available, and many houses have accidents and natural disasters that damage the home before completion. (Our neighbor's home sustained significant fire damage when it was 80% complete.) When I built my house, homeowner's insurance during construction was a good bit more expensive than builder's risk. I don't know the situation now.
Theft of materials and tools from the work site is also very common. Probably every builder has experienced that at some time or another.
And finally, as a contractor you have more risk of liability if someone gets hurt on the job or while on the site. (You have some risk for premises liability as the homeowner, but not as much.)
In summary, although being your own contactor is quite doable, you should do a good bit of research before taking it on. There always seem to be some unpleasant surprises when building a house. Educating yourself can reduce the number.
Good luck!
-D.
