Discussion Forum Topic:

Managing Your Home Building Budget
Original Comment:
MHBA often gets asked questions about budgeting for new home construction. We reached out to one of our members, Ken Semler of Express Modular to ask his advice on the subject. Here’s a summary of what Ken had to say:

When you build a new home using traditional construction, the final cost actually paid for the home typically exceeds the original contract by 10 to 30%. That’s a big difference! That means if you agree to a contract for $250,000 for your home, you will end up actually paying your builder $275,000 – $325,000 for your home.

MHBA: Why the extra costs?

This is often due to changes in customer choices. Building a home requires decisions. Not just one or two or six or eight. It requires hundreds of decisions to be made. For many, that is too many decisions to make at one time. Delaying decisions to later in the process means allowances are put in contracts as placeholders. Houzz and HGTV are great resources. However, when building a home, they can be dangerous. Every new item you see, that you just have to have in your new home, means additional and unplanned costs.

MHBA: So how can you avoid this?

The answer is fairly simple: Plan ahead, stick with original selections, and be decisive. The modular construction process actually helps home buyers better manage their building budgets by requiring so much upfront planning and demanding that decisions be made very early in the process.

Modular turns home building from a construction process onsite into a manufacturing process offsite. A factory has to design and know exactly what is being built. Plans have to be created and approved, by both the home buyer and the permitting authority. Materials all have to be purchased ahead of time and delivered at the precise time a home’s modules are being built in the factory. The more that can be done in the factory takes advantage of the efficiencies of offsite construction.

Modular limits budget creep by requiring practically all decisions to be make upfront. Many times, customers make all of decisions and then wait. They have to wait until the factory builds their home and delivers it. What appears to be a lack of activity early on at their home site when using the modular process becomes a scene of hyper-activity. Some say it feels like a big giant whoosh! The pace of activity can be almost overwhelming.

While the modular home is being built in a factory, the foundation and other site work is happening simultaneously at the home site. When the modular home arrives, drywall is complete, electrical and plumbing is mostly finished, kitchens and bathrooms are finished, and most other items are substantially complete. All of these decisions had to be made up front. But because of this, the price of the home didn’t change. The requirements of the modular process enforced a discipline that helped the home buyer better manage their home building budget.

Modular construction is a great way to build a very custom home quickly. The process enforces a discipline that requires decisions to be made up front. But it is this process that helps make modular a better and more cost-effective way to build your new custom home!

Read Ken’s full article here: https://expressmodular.com/modular-a-better-way-to-manage-your-home-building-budget/

About the Author: Ken Semler
Hi, I am Ken Semler the founder of Express Modular. I am passionate about this industry, our company, and the products we provide. Modern modular construction provides the ability to deliver healthy, safe, and energy efficient living spaces. Express Modular is a licensed builder/contractor in almost every state. I believe that modular homes provide the best way to deliver virtually unlimited design flexibility at the greatest value.
Started on October 22, 2018 by Tom Hardiman
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