The "Birth Of A House" has experienced a "miscarriage". Negotiations broke off and were aborted earlier in the week. Dozens of hours of work is all for naught.
After much ado, we were unable to get the builder to commit to a price on the home and there were too many variables and uncertainties, so we aborted this particular project.
One of the options we discussed with the builder was a "cost plus (18%)".
There were advantages and disadvantages to this cost-plus approach:
* The main advantage, of course, is the buyers have total say over what goes into the house, without the builder trying to discourage them.
* The main disadvantage, as I saw it, was the builders would have no incentive to keep costs down, particularly while negotiating rates with their subcontractors. Since they (the builders) would be paid on a percentage of the total construction costs, they would prefer for costs to be higher.
At one point the builder gave us a price and offered to carry the construction loan through completion. But, the next day they withdrew that offer because the cost of building materials are going up so quickly they were afraid they would lose money.
There were just too many uncertainties and we weren't feeling good about proceeding. Hopefully, we can find another piece of land and an acceptable builder. The builder owns the piece of land we were hoping to build on so that is no longer an option.
Onward...
Carol@TopPropertiesWenatchee.com
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