Is it customary for a home builder to charge 10 - 15% more if a customer wants a more expensive flooring, cabinetry,

etc that go over the allowance?
  4 answers
  • Sure is. Reason is that if the deal falls through he needs to sell what you choose. Which could result in longer delays to sell. Also production changes which cost them money. They do not want to fiddle with this so they charge tons more then its worth so people will not change what they normally sell. Remember they use the lowest cost contractor that they can find. (most cases) These guys only know one thing. Get it done as fast as we can so our bottom line looks better. When you add an additional extra, such as a floor or cabinet, they need to slow down because they do not want to own it if it gets messed up because of a goof on their part. I always suggest to clients that are buying a new home to get the standard fair and upgrade later with what they like. The quality always ends up being better and the cost factor is not much different.
  • Cindy, I know the horse has already gotten out of the barn but allowances are one of the big ways some contractors (not all) take advantage of homeowners. Before homeowners contract with remodelers be sure to look over "allowances" carefully and be sure they are reasonable in light of your tastes. If an allowance is for a $300 range and you have Wolfe high end tastes, your fixed price contract with an allowance really is not an allowance. Same with carpet, flooring, etc. Now since you appear to already have a contract, look at the allowance and ask for a copy of the receipt for the actual cost. You should be paying the difference in most contracts (check the language) plus often you will pay the contractor's stated mark up. If it is a new home and you are getting an upgrade, then you will typically pay more and have to make a deposit which is often not refundable if you fail to close (unless it is the seller's fault).
  • Cindy H Cindy H on Dec 05, 2011
    Thank you. This is a new home build. We own the land. We have designed the house. Just looking through all the nitty gritty contract details. We're purchasing our own appliances. We were just curious abouat the roofing materials, flooring, cabinetry...
  • Absolutely normal. A realistic allowance protects both you and the builder. I remember once having an allowance for tile floor at ten bucks a foot, inc installation. The lady chose the most expensive floor tile I had ever seen that cost just over ten/ft plus shipping, JUST for the TILE ALONE, not counting accessories, sales tax, and labor. She got what she wanted and I got my money. Without he limitations of allowances, all builders would be bankrupt trying to meet the demands of homeowners. The only other option would be for every home to be bid out on a precise set of specifications written to high legal standards like used in Commercial and govt bidding. Believe me, that adds a lot to the cost, esp for the average home, unless you were building a hundred of them exactly the same.
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