Yes you're thinking is correct, good for you for doing this leg work. The more specific you are, the more accurate your estimate will be. One person's 'level 2' might be way off from what someone else's perception is of the same level. We don't ever use allowances for this reason, and instead use a design-build approach.

Don’t leave it open to interpretation for anything or you will be the loser on that interpretation. Someone else’s idea of “quartz countertops” could be cheepchinesecrapola fall apart import garbage in a speckley ugly pattern. If they installed that, zero recourse on your part because all you specified was quartz. And you really wanted the new Cambria Ella marble looking product.

The devil is in those details that take 18 months to narrow down. Also, that’s where your money is. When doing your research and finding out that your budget doesn’t cover what you thought it would, you can research less grand options that meet your aesthetics instead of being forced on the fly to pick something with 3 hours notice.

Your architect is being paid for full specification during the design and for oversight during the construction, isn’t she?

Thanks for these replies, it does sound like I'm on the right track in general in being very specific. Perhaps I should flip the question a bit and ask: are there any components where it's not worth specifying an exact brand and model? I'm thinking about some hypothetical scenario where a contractor has a very good working relationship with a subcontractor or distributor that only carries certain brands of equal quality and by being too specific I am forcing the contractor out of their comfort zone which could lead to more problems with build quality? I realize this is a hypothetical but I figure it's worth asking.

"Grade" is in the eye of the beholder, it means almost nothing. By all means spec exactly what you want as precisely as you can. It's the best way to avoid bad surprises and expensive change orders. "Allowances" are the root of much evil; pick what you want up front and get it priced exactly.

I think that communication is key, and there is no such thing as too much info when building or renovating. You should feel comfortable asking your contractor these questions, and he should be happy to provide insight. At the end of the day all any good contractor wants, is a quality end product with a happy client.

Honestly I’d spec, in detail, everything I care about. Down to the last fastener type. And if you’re leaving it to interpretation of a contractor or sub, I’d be writing some very detailed clauses with my lawyer about inspection and rejection of sub par work, overrun, and who gets the final say. Otherwise if that sub makes a mistake you’ll often be the one eating it for correcting it.

My trust has been permanently damaged by one too many issues over the years - now we are control freak nutters over even minor repair work and fabrication ;)

"you can research less grand options that meet your aesthetics instead of being forced on the fly to pick something with 3 hours notice"

This.

Sophie's suggestion for Plan B where/when necessary, for "second tier" items that meet your aesthetic/quality requirements is on the nose. Not just for when the budget doesn't stretch, but also when the Plan A item isn't available (unexpected price hike, discontinued, back ordered, etc.).

Where there are industry accepted terms for things (select / common, etc for hardwoods) or "levels" for drywall - you can go more general without picking the exact "thing". Or, for a square footage allowance for carpet, for instance, is fine. But - be careful on that kind of allowance for tile - as the installation can drive crazy costs. For fixtures and appliances, I would think an allowance is okay - but try to find out what these cost beforehand (with the builders' discount, etc)

Ultimately, the more specific you are, the better.

And the plan B idea is brilliant.

Specify everything. What "grade" of doorstop do you think you will get if you don't specify it? Then try to imagine in your head the conversation you will be having with your builder when his guy is almost finished installing them and you discover they are the 96 cent springs from Menard.

If the details matter to you, they need to be spelled out.

The doorstop example is excellent. This is something I was very picky about -- we're building custom, and we're building ourselves -- in part because the entire house is so nice and it seems a shame to put a crummy doorstop in it, but it's also toward the end of the project where you have decision fatigue and you can be tempted to go the quick, icky way. Plus we live in a fairly remote rural area where the only local options are poor quality and ugly, not at all what I wanted. The nice thing about doorstops is that as a rule even the better quality ones aren't that expensive. So you'll kick yourself if you don't specify, because for the same price or just a bit more you can get a better looking, better quality item.

I think it depends on who's doing the purchasing. Most construction contracts out here in CA will specify owner purchase of appliances, for example, because there's no money to be made on contractor or designer purchase. If you already know what appliances you want, make sure the designer/architect has all the brands/model #'s, and spec sheets for the measurements, installation clearances, and electrical/mechanical requirements so the kitchen design can reflect the actual units, not generic ones. As for other building materials, yes, if you have specific items in mind, let your contractor know, but be ready to review substitutes if his supplier doesn't carry those specific items.

If it's important to you, specify every single detail about the item. If anything will do, don't sweat the specifications or details. You decide.

The challenge for consumers doing this for the first and only time is keeping up with the phase-out of old models and the introduction of new replacement models. Plus, knowing and understanding what accessories, installation fittings or other miscellaneous gear is needed for the piece of equipment.

Architects and designers who do this sort of thing repeatedly are usually worth their weight in gold when it comes to staying current and know what other items may be needed for a given piece of equipment.

following

Thanks to all for comments above! Perhaps this should be a question for a separate thread, but it closely relates to the above so I'll try to ask it here:

Assuming I do go into great detail about every single thing in the construction contract, and assuming I go for a fixed-price construction contract, how fixed will that "fixed price" contract actually be? During the design phase, I had them drill some bore holes to get a soils profile to inform the foundation design, so I'm not expecting anything unexpected with the soil/foundation. That, combined with a high level of detail in the house design specification, makes me think I'm entitled to expect that whatever price I get for the fixed price contract is the price I should be paying. That said, I hear nothing but stories about people having to continuously negotiate with contractors during construction and assuming that everything always ends up costing more than anticipated. Do these stories only come from people with cost+ contracts, people who didn't have a lot of detail in their design, or people with no contract at all? Or should I still be worried about cost overruns even in my situation? If so, what types of things should I be worried about? What types of things could I put in a fixed-price construction contract to minimize cost overrun potential?

Just to be clear, a "fixed price" is specific to the scope. If the scope changes, then a change order for the additional work/cost of materials will be issued. I've never worked on a job that didn't have changes to the scope in the midst of a project. That's not because the scope wasn't thorough, it's because as things are being built, clients often want add-ons they didn't think of or anticipate in the planning stage. For instance, one of my clients building a new home decided to add wainscot paneling in the entry and dining areas which was not originally specified. That impacted materials cost, labor for installation, and the painting estimate. Not a big deal construction-wise; simply more money. I would plan to have anywhere from an additional 10% to 25% "slush" fund in your budget to accommodate this sort of thing.

In my experience (married to a builder who does custom as well as non-custom houses, and other builders we know in Alberta/Saskatchewan), and it may be different elsewhere, the more custom, higher-end projects are usually cost-plus and the non-custom, more basic builds are usually fixed price. Cost-plus usually works well when the focus is on quality, fixed price when the focus is on cost.

My experience is like Becky's. Most people here (on this forum) are not doing basic builds and are obviously not average when it comes to attention to detail and focus on quality.

There are always unexpected items and things that are hard to budget. If you are a builder doing a fixed price contract, you would always pad those areas to your advantage so you don't lose money. No one can predict the weather months out, lumber prices months out etc.

The house I'm having built is small in scale (~1400 sq ft), and while I am a very detail-oriented person and care a lot about the design of the house, my intention is the plan out every detail possibly during the design phase before I get to the construction phase. Because the scope of the project is both small and well-defined, I feel that it would be appropriate to push for a fixed price contract. This is my first time going through this process and I am learning everything from scratch. Based on my readings, there is almost no way that I could envision trusting a contractor enough to agree to a cost plus contract. If they need to pad their fixed price contract so be it, but I value the certainty over the possibility of cost savings.

Spec everything in excruciating detail. Your builder should spend time with you helping you with what he needs to know. After all, the GC is supposed to be the expert. This details will be helpful to them as well. They know exactly what is expected and can plan for it. A builder who doesn't want detailed specs is not a real professional.

We did a hybrid method of budgeting in our custom build. We agreed up front on the total compensation for the GC and an incentive. We specified when they would receive payments. There was no mystery as to how much or when they would get paid. We made them our ally in reducing costs whenever it was reasonable. While we had a proposed detailed budget for the building supplies and sub-contactors, it was designed to be flexible. The goal was to provide flexibility, certainty and an incentive to keep costs in line with expectations.

homechef59 I would be very interested to know how you went about creating that contract. Did you have a lawyer involved? Did you find any great resources for creating such a contract that ensures that it would hold up legally?

We did a hybrid.

The cost came within 3% of the bid with most of that excavation and removal. (the topographic survey was off in places.)

Edit. I will say the site manager was somewhat annoyed that I hewed so closely to "the plan." They were more experienced with just start building and figure it out as you go along. The owner was fine.

"there is almost no way that I could envision trusting a contractor enough to agree to a cost plus contract"

One of the benefits to the smaller community where we live is that reputation and word of mouth mean something. My husband is a second-generation builder, having worked with his father and then taking over the business when his father retired. And now one of our sons has just started the college portion of his carpentry apprenticeship, which he's undertaking with his father. Our other son, still in high school, is a year behind and will be pursuing the same apprenticeship plans. So that's the third generation, and my husband's family has lived in the area for about 100 years. People know where they can find us lol.

EF, My GC had a standard builder's contract that we reviewed with an attorney and modified where applicable. This was a completely custom build where I already owned the land. There was a construction loan involved very late in the process for a nominal amount. The GC had an excellent reputation and references. He lived up to his reputation. We are still speaking to this day. We would consider using him again. It's all in the due diligence and professional expectations on both sides of the contract. Whenever a decision was needed, I made sure to be two steps ahead of him and I didn't change my mind once a decision was made. We came in under budget and were able to add additional features and finishes as a consequence.

There are several different categories of construction contracts, but it's important to understand that these contracts are all about risk management and which party takes the greater financial risk.

For example, in a Fixed Cost contract, all costs of the scope of work are included and the builder has all the risk to complete the scope of work within the Contract Sum.

At the other end of the spectrum are Time and Materials contracts in which the owner is billed on a regularly scheduled basis for the material used and time of workers which has been incurred. In this type of contract the owner has all of the risk for completion of the scope of work.

Finally, there are a host of "Cost Plus" contracts, in which the owners are billed for the cost of the work incurred plus general contractor's OH and profit. In it's simplest form, this is not much different that Time and Materials contracts. As a result, many Cost Plus contracts include a "guaranteed not to exceed" or "maximum cost" provision, and perhaps other provisions as well. For an incentive, there may be an added agreement between owner and general contractor to share in any savings below the maximum cost number in a ratio of, say, 50%-50%. In this type of contract, risk is shared to a greater or lesser degree between both owner and builder.

It's always amazing to me that many consumers simply accept a builder's "standard" contract for construction and never think about the risk management aspect of construction contracts.

My advice is to find builders with good business reputations, but it means nothing if it's not in a printed and signed contract for construction. Get the right words, for all parties, on a piece of paper which can be signed and monitored for the duration of the project.