The True Cost of Building a Custom Home in East Idaho (And Why Bids Are Misleading)
One of the most common questions we get in our industry is simple: "How much is this going to cost?"
As we consider that, it’s actually a pretty broad question. When you look at the different finishes somebody might have in their home, or even the specific site location—it can make a huge difference in the final price.
Because of those variables, it’s a really difficult question to answer. It’s not one that we can just throw out a number for and feel really good about. I think you’ll see that a lot with builders, too, where they might give you a huge range that their "typical" home costs.
But here is where it gets dangerous for you as a buyer. Due to this issue we have within the industry, many times a builder will just set an "Allowance" for certain things to get the bid done. And that is where the trouble starts.
The Allowance Trap: A $40,000 Example
Let's look at a real-world example. You might have one builder give you a $20,000 allowance for cabinets. It looks great on paper because it keeps the total bid low.
But another builder, bidding on the exact same project, might look at your design and bid $60,000 for cabinets because they know what you actually want.
So now you have this $40,000 gap. Builder A is proposing one thing, and Builder B is proposing something else. If you go with the lower bid, you are going to get stuck with a massive change order later to cover that difference. (Or, in the rare case you come in under budget, you’re going to have a little bit of money left at the end—which I don't think anybody would complain about—but that rarely happens with low allowances).
The "Scope Gap" (Apples to Apples)
Beyond just allowances, there is a massive issue we call the Scope Gap. These are the "little things" that get left out of a bid but cost a fortune to fix later.
For example:
The Driveway: One builder includes a paved driveway. Another is just planning on gravel and then they’re going to walk away.
The Landscaping: One might have full landscape included, while another has zero.
You’ve got to try to nail down what the true scope is so that you can get an apples-to-apples comparison.
This isn't always possible for a homeowner to do on their own because there aren't always plans that exist that are fully vetted and show that entire scope you're requesting. So we have to make sure that is really getting covered—that the builder or builders you're interviewing are covering all of that.
This is why we exist: to force builders to bid on the exact same scope, which protects our buyers from surprises.
Why You Need an Advocate (Not Just a Realtor)
One of the differences that exists with what we’re doing is understanding who plays what role in your project:
Realtors help you buy the land.
Architects and drafters help you design the house.
But ultimately, you're going to spend a lot of money with a contractor. Selecting that contractor really becomes a pivotal moment. You might spend quite a bit of money with a realtor to select the land, but that pales in comparison to the construction contract.
Some architects will help you select a builder, but it's generally not their focus.
That’s really where my background comes in. I focus on helping owners select the right builder. We do that through a grading process and an interview process that comes from the commercial side of construction. We are bringing that professional rigor into the residential side to help owners feel good about the decision they're making.
We want to truly vet that builder out so that you don't become one of those horror stories that people might have heard about.
