Seriously, why not? Why do most builders in developments only have a list to choose from and they won’t vary or add anything to that list?
And, why, for the love of God, are the custom-built homes SO. MUCH. MORE. EXPENSIVE?!?!
It seems silly doesn’t it? You want to add one window to a home to make it the “perfect” home for you and the builder’s representative tells you that they don’t customize and the only options available are those on the sheet they’ve already handed you.
Then you go to a custom home builder to build a similar plan and customize the house EXACTLY how you want it and the cost is 25% more! WHAT?!? How does that even happen?
Believe me, I was in the same boat for years, even as a Realtor representing builders and buyers. I would petition the builder to make “one small change” for the buyer so that they buyer would get the home they dreamed of. Sometimes the builder would agree (but only after giving up my first born) and other times the answer was “absolutely not going to happen”.
First, let’s discuss the difference between the type of home builders out there:
Development Builders: These builders usually build in developments where there are multiple lots, often 30+ and they will release lots at various stages of development to help keep the finished inventory low. Homes here start with a “base price” which includes the basics and then you can add on things like granite counters, wood flooring, garage door openers etc. from the upgrade sheet that they provide you. Want to add an amazing front door you found while wandering through Lowe’s? Not going to happen. Same with any other item that is not already pre-priced and provided in their upgrade sheet.
However, often you can put little money down and get just about any loan type you would like, from VA or USDA (which are both $0 down), FHA (3.5% down) or a standard conventional loan. The deposit required by the builder will go towards your final purchase price and closing costs. Additionally, you don’t have to make a monthly payment until the home is complete and transfers into your name. The builder carries the risk during the entire build.
These builders also get to take advantage of discount pricing from sub-contractors and suppliers because they are guaranteeing substantial purchases and relationships with their subs. Those discounts are passed along to the buyer and reflected in the purchase price of the home.
Because these developments have so many homes and most of these builders have multiple developments, it is not cost effective or efficient to modify each plan for each specific buyer. Sub-contractors bid these jobs based on the same or similar work for each home. Small changes usually result in the sub-contractors or purchasers not catching the change and thereby having to redo the job.
Semi-Custom Builders: This is a term that has been thrown around rather loosely over the years. A semi-custom builder is one that will make some changes but not all. And, each builder is drastically different, there is no one-size fits all when it comes to the type of upgrade you can choose or the cost. Often you will find semi-custom builders with smaller developments (less than 30 lots) or in a development where there are multiple builders for buyers to choose from.
Similar loans can be used for these purchases as well, as most builders carry the risk until closing, just as with development builders. Deposits are often higher due to the custom work and the risk the builder has. They do receive some trade discounts because of the volume of homes but not nearly as much as development builders.
Since they don’t build the volume of homes they tend to have the ability to customize projects and stay on top of each home to make sure no mistakes are made and usually have subs bid each home specifically instead of a “group rate”.
Custom Builders: Usually custom builds are on lots or acreage that are already owned by the buyer or are wrapped into a construction loan. Their focus is on building very few homes at a time or sometimes only one at a time. The buyer can choose their floor plan, have it modified, add or remove just about any feature and pick all the finishes.
Most commonly custom home loans are 20% down (although there are some newer loan products that do offer less money down). They require specific info from the builder up-front before providing the loan to the buyer. They buyer will pay interest only on the loan during the construction period and based on the amount of the loan that has been paid out. The draws (amount pulled out at various points throughout the build) is paid to the home builder.
Custom builders often do not receive trade discounts due to lack of projects that they build. However, they often hire top sub-contractors who also have more time to put into the work as they are not rushing from one job to the next. Additionally, custom builders can modify just about everything as their volume of homes going at the same time is very low.
Now, with every home builder there are pros and cons. In Washington State, however, there are guidelines that have to be followed precisely for energy credits and so on in order to be able to get the Certificate of Occupancy from the building inspector. And, these energy codes are not for the light of heart. The build codes are often cumbersome and difficult to understand.
During my personal home build, I ran in to lots of these issues because I wanted to change thing last minute that would then off-set something else which in turn would have to be modified. At times it was excruciating in all honesty and costly. But, the trade for getting exactly what I wanted was totally worth it!
For your reading pleasure, I’ve linked some of the codes and energy credits that builders have to follow just so you can get an idea for yourself.