How to Become a Professional Home Builder – Pitfalls of Contract Building-Allowances

If you’re a contract builder allowances can make or break you and all allowances must be stated in writing. It’s very important that you have allowances for all those items you will not know the price of until the product is purchased or the work is done. It is also very important that you be crystal clear on all allowances.

Give your customer a rough idea of what $4,000 worth of grading will entail. Show them what $350 a 1,000 brick looks like. Show them what $1,000 worth of lighting and $3,000 worth of plumbing fixtures looks like. And show them what $20 a square yard carpet looks and feels like just to name a few.

It’s very, very important that, verbally and visually, you be crystal clear on all these allowances. The thing you don’t want is for a customer to expect $3,000 worth of lighting when you’ve only allotted in the contract $500 for lighting. They’re not going to be happy and they’re going to think you’re trying to pull the wool over their eyes. Then you have problems.

I know a very good contract builder and he spends a lot of time with customers up front going to lighting stores, carpet stores, all these places so the customer is real clear as to what the allowance will cover.

This can be very time consuming and aggravating but in the end it will be another important step to ensure a happy and satisfied customer.