Our First Bid

Right before the holidays we met with a builder up at the site. This builder is doing a house near our property who we had met over the summer. The meeting went well and they brought their architect/manager, project manager, and lead contractor. A solid showing we thought. We spent a good hour+ with our architect (Matt) running through it. Unfortunately, there was six inches of snow on the ground so we couldn't get to the actual site.

They seemed very enthused about the project because it was different from the more conventional homes they had built. Their architect particularly liked the modern design and eco elements. We told them at the end our target of sub-$200/sq ft and they didn't blink. They promised a rough bid turned around soon.

Today we got their bid. It came in quite high at $300/sq ft to our surprise. After we took the deep breath I talked with Matt and he said he wasn't shocked. All along he'd been advising that this is where he'd been seeing bids come in at. The one problem with the bid was that it didn't break down most of their core building estimate. It only broke out non-core items that would be subbed out. So we have to go back and get some detail to see why their number is so high. Was it a negotiating tactic to come in high to negotiate down esp. if they built in large margins for their labor? Did they put in high numbers on key elements like windows and concrete?

Matt says that he can usually find a way to trim off 10%, even 15% but getting to 20% is often the max. Beyond that it becomes difficult and you really are changing the project from both an architectural and builders standpoint. Does the builder flat out need $100k in labor fees to take the project? Then it'll be tough to negotiate down. In any case we're going to go back to them and get the detail of their bid and enter with an attitude of "we're apart on the number can we roll up the sleeves and get to a better place". In addition, we're bidding out to others so we can see if this is the market rate or unreasonably high. We also got a separate dealer bid on our windows since that's such a large and key element of the design. That came in high at $70k (we thought more around $50k) but there are ways to trim that back since we had large and custom elements there. But again, that might just pull us back $20-30k.

If we can't get one of the contractors into the range we need our options are few and not great: 1) we can do a house re-design but as Matt said we don't have a lot of quantity (sq. ft.) nor complexity (pretty much dimensional w/o crazy design elements) to take out; in fact the one unique item is the floating poll design and Matt doesn't think putting that on the ground really changes the equation that much; or 2) put the project on hold to see if there are other avenues to build it or if time and a declining housing/building market helps us. Obviously the latter is not desired and leaves a lot of risk to the market.

Here are fingers crossed.