A cost plus contract, with no upset or not to exceed figure, is just an open-ended expense account, based on what you and/or your builder decide is needed here and there.

If you think you need a "more detailed list" of expenses, you need to talk to your builder. No one here can know what your documents show, what you may want, or what the builder has included in his cost plus contract. Have you signed that contract?

Your biggest potential issue is your allowances. What do your allowances specify? What did the contractor actually allow? Are you willing and able to live within the allowances for that work? Allowances are always the Door to Hell. In all too many cases, a builder includes minimal allowances in order to keep the overall initial construction contract at a minimum, while the owner is thinking HGTV features, finishes and do-dads (technical term).

My best advice is to have an immediate sit-down, documented meeting on all your allowances--what the allowance for each item of work is, and what they will buy you.

Good luck on your project.

PS: To casual observers, the best professional advice is to never, ever have an allowance. Design, detail and specify EVERYTHING, so that there are no surprises.

We got a quote initially that was based on previous builds. This allowed us to see if the builder was in our ballpark. It broke down everything from permits and before we expert costs before anything happened down to the mailbox. But it was based on a local build near us.

We then worked with our designer and chose all interior and exterior finishes and finalized our pans. Then we got a new updated budget that included all the new engineering requirements because of the design we chose, all of the excavation costs, removal of old house and so on, and all of the other extremely specific details. It was pages and pages of detail. It also included the builder fee and tax.

Even then, with us having done all the leg work and planning, there will be/have been overages. Excavation had to be deeper than expected and uncovered a water issue we needed to deal with.

My point is two fold. One you can get a good budget and use it as a guide. Two it will still change and cost more...sadly! But if you have chosen everything you can make tweaks. For example our excavation cost more than expected so we changed some light fixtures and a few design details in our suite kitchen to try and get some of that back. But you can only do this if you know all of your selections and where you can make easy changes.

I don't have a problem with some allowances, especially for finishes. We had cost-plus, with firm numbers on most, but not all, infrastructure items, but allowances on what I consider the decorative items -- lighting fixtures (except the cans, undercounter, closet basics with were included in electrical); plumbing fixtures, appliances, cabinets, countertops, tile and flooring. Although we've never built before, we have lots of experience with renovations and addition, so I could eyeball or quickly research the allowances and know whether they were adequate. Also the allowances were for things we were comfortable with shopping on our own and wanted to work with our own vendors. Anything we purchased (and paid for) directly off budget, the GC didn't charge a mark-up -- that turned out to be tile, decorative lighting fixtures, carpet, appliances and plumbing fixtures.

Our only known to us budget was a bit higher than what the GC budgeted, so we knew we had a bit of play, barring any unexpected obstacles. Once we got past the excavation, trusses, steel, and other issues that could blow a budget unintentionally, we felt comfortable going over on some allowances. For example, added built-ins in living areas that increased cabinetry and countertops. But went a bit under in others. Lighting was under but we moved my chandlier from the build budget to my separate furnishings budget and so the while total lighting was over budget, the actual build lighting budget was slightly under.

Also it was easier for me to make choices as I could see the house progressing.

We also made a few infrastructure changes in the process, like additional insulation, increasing the percentages of stone on the exterior, and a few more minor things that increased the budget a bit.

I do agree that some choices are better made later from a budget standpoint. I mean if you made it well under by the time you buy lights, you can splurge a little. That is one of the arguments about specifying everything up front.

I do think on a cost plus, you should get foundation, framing, grading, permitting etc all spelled out.

On sinks - I think it is important to know what the allowance covers. Like my lighting included - smoke detectors, door bell, outdoor floods, garage overheads, and I think garage door openers. All somewhat logical but not what I knew going in.

I don't think you necessarily need a $1500 kitchen sink line item but you should know that it is in your plumbing budget - along with tubs etc. Plumbing is pretty easy for a layperson to get prices.

And for us, it was only the kitchen sink in plumbing. Vanity sinks were in countertops.

Ours is cost plus. We had our builder price pretty much everything possible out ahead of time... trusses, brick, concrete, drywall, etc. because we had a specific amount that we don't want to go over for this build. We also added 15% buffer to the total cost for the construction loan, so we are still in line with where we want to be "all-in."

It meant a TON of leg work for DH and I... we spent a week going and picking out plumbing fixtures, tile, cabinets, flooring, counters, etc. So, I was able to spec out for pricing the $1,000 farm sink, the clawfoot tub, the tub filler, etc and know it was accounted for. Those prices then became by "allowance" - I ended up switching to a pedestal tub and saved $200 off my "allowance." The Group D counters I had an allowance for ended up being in a lower "class" so I saved some money there.

Once we started building, we started making some changes, but we knew what the cost difference was. Instead of site built trusses, we went with off-site built. Instead of Advantech only on the second floor, we put it on the first floor, too. We got lucky and locked in the framing lumber costs right before the big hurricanes came through -otherwise, those prices would have gone up considerably.

We have an allowance for lights, wood floors, and appliances - we are buying those out of pocket. I've been buying light fixtures for months with the goal of staying under the allowance our builder put in the contract. And the builder isn't charging a commission on those items.

We have built both ways, cost plus and with a fixed price. Currently we are building with a cost plus contract and I actually think it is saving us money. I do wish we would have put a do not exceed clause and a date of completion penalty on it.

In your case get a break down on the big things; foundation, framing, permits, electrical, plumbing. The builder should know these already.

For the allowances get a very clear idea from the builder on the level of finish he has in the allowances. All allowances can vary but major ones will be roof, windows, cabinets, appliances, plumbing fixtures, electrical fixtures. The more of these that you can narrow down before signing the contract the better, especially if you are getting a construction loan.

I've done both cost plus & fixed price. If a prospective client says "quote it with the exact finishes as the last home" I can quote & specify without allowances....but that is rare but not too far off. Typically clients and/or architects aren't ready to spec all the finishes and most architects I've worked with also use allowances. Builders, architects as well as clients are often guilty of using allowances that are inadequate for fear of generating an inflated price. For a cost plus project I'll generate a 50-60 line item estimate, with each line often supported by a page of calculations based on measurements, rates, more detailed estimates. I find that the more I break down the line items for myself, the better. Using a single "cost per foot" as a guideline without this is a fool's choice as so much of the project is not based on living square footage and there are many fixed costs. If you are comfortable with the builder and have permit ready plans, the builder should be able to estimate separately for foundation, framing, framing labor, trusses.... each hard cost item.... unless he is doing that portion fixed price.

But, all of the above assumes that you have actually hired the builder, or have had a deposit change hands to secure his services for estimating to that level. You are paying a fee for a detailed two to three weeks of his time contract ready estimate?

You aren’t getting contract ready “free” bids from anyone if you’re still dating everyone in sight. You have to get engaged to get that level of attention.

Sophie, you're correct. In our situation, our builder didn't charge us a fee to bid everything out. If we had decided to not go with him, he would have charged us $500. (I figured up that we spent over 80 hours with him before ever breaking ground - I think he has very well earned his 15% fee)

Disagree with Sophie. All four builders we seriously considered gave us detailed budget examples of houses in our area, similar to what we wanted, before we signed a thing. Yes these were other people’s houses but they showed what the builder could do with our budget or not. It was tweaked and personalized once we signed with the builder yes but it barely changed overall in price!

All of these differences of experience and opinion are certainly interesting to read. But, let's cut to the chase...none of these comments mean anything to the OP.

The only thing which has any meaning at all to the OP is the builder's numbers.

The OP needs to have a cordial, sit-down, let's-have-some-cake-and-coffee meeting and go over the numbers until the OP understands them...and understands what's included...what's not included...and how the builder came up with the numbers in the first place.

The OP has a cost plus contract. But we don't know the terms of that contract. What's the "plus" in the contract? Is there a not to exceed amount in the contract (it appears not)?

The biggest potential pitfall, as always, are the allowances. Who determined what work would be an allowance? Who determined the actual allowance for that work? Have the OP and builder talked about each item of work and the allowance and are they both on the same page as to what is desired and what it will cost?

We see this situation repeated over and over again on this forum. The only thing which makes any sense is to recommend to the OP that they sit down with their builder and find out what the fixed and variable numbers are.

Good luck with your project.

PS: I wish folks would read the threads on this forum and design, detail and specifiy everything so that the numbers are understandable and mean something.

But the question from the OP was essentially how much detail should they expect? So the comments are helpful in identifying that in order for there to be more detail there likely needs to be more legwork and planning done. Also examples of getting far more detail show that others have gotten budgets with more details so it is t entirely outside of Normal to expect that. The op can now go back to the builder and say we want this budget teased out more please and some of the bulk line items broken apart so we can see more detail. It’s up to the builder to say yes or no to this but it is a reasonable request by a homeowner in my opinion.

"We are building a custom home"

"All four builders we seriously considered gave us detailed budget examples of houses in our area, similar to what we wanted, before we signed a thing. Yes these were other people’s houses"

Notice the differnce, you have a production builder, and the OP is having a custom home built. Without info on what the OP wants exactly in a house how can a builder give them an exact price for a CUSTOM build?

Actually we are building a custom home. All builders keep records from previous builds, even custom builders. Shocking! Not really. What is shocking is that some people are so judgemental and rude here. Seeing past budgets from builds near us with similar square feet, finishes, and style can give a remarkably accurate starting point for a budget. Of course once you have firmed yo who you want to work with your actual budget needs to be created. But why would anyone sign with a builder who can’t prove they can build something in their price point?

I also assumed that the OP would share with the builder what they want. I suspect they came here for advice asking, just what they did by the way, which was is it reasonable to expect more info? And it is reasonable to ask yes.

As has been said, more than once, if the OP wants more detailed budget information (which is a normal and logical request, except for a fixed price contract), simply ask the builder for a sit-down meeting and discussion of the budget concerns.

Simple?

We have also hired a builder and architect to do a custom build. But we chose them, in part, based on work they have done in the past, together, houses that we liked and that were in the price range that we plan to build in. Even a custom builder has to have some basis to start from.

We are halfway through our full custom build using fixed-cost. This method uses allowances. Overages result in expensive change orders.

We also looked at cost-plus, and I sort of wish our awesome builder used this method. For the cost-plus builders we interviewed, there is no such thing as "allowances". These are replaced by estimates. In the end, you spend as much as you want and builder gets their cut.

No contract for construction has to use allowances. It's not mandatory. It's not even necessary. And it's generally not a good practice. Working with an architect means everything can be designed, detailed and specified before bidding. If that's what the consumer wants.

Many consumers don't want to take the time and pay the money for the work and the necessary decision making to be done up front.

Thinking that they can save time and money, many consumers only ask and expect the most minimal initial drawings and notes, thinking that everything will be fine after that. It's only after the bidding that many consumers begin to see that what they were hoping for is not possible for the contract sum and allowances included in the construction contract. Surprise, surprise! Time to pay the piper.

These are the consumers that many less than honorable builders love, because it opens the door to allowances and change orders, where the construction price and builder's profit can increase substantially.

What the consumers don't understand is that they are going to have to make the selections and decisions for finishes, fixtures and equipment at some point in the project. They can make them early before bidding. Or they can make them later after bidding and open the door for inadequate allowances and change orders.

Time and again, the professionals here counsel that there's no need for surprising allowances and change orders.

Time and again, consumers post here and anguish that their construction contract is agonizing because of all the choices they must make; that the allowances are not sufficient for their hoped-for choices; and that their initial contract sum is increased by subsequent change orders.

It doesn't have to be. But it is. Over and over. Again.

ditto what Sophie said, everything needs to be spelled down to the brand name. You might want to contact the local cabinet makers and find out what they would charge, kit, baths etc. Allot of times they are less than half price of what the box houses are or what your GC is charging you.

Building a house is ALLOT more than just making a phone call, you need to be VERY involved from the beginning and thru out the process. This will probably be the most expensive thing you will ever purchase. Use every resource you can. Look at it as being an OB even if you aren't.

How is acting like an obstetrician going to help you build a better house?

jannicone .... that made me laugh, then I thought about it. All my projects are my "babies" and there is definitely a rush when I start it, while framing and at finish.... then I go through the withdrawals when I hand it over aka "postpartum depression" and home I get invited back to hang out with my "kids" (other than warranty!). Building a home from my side is a wonderful experience. It challenges most of my skills and works both sides of the brain. Working with clients dreams, helping them translate them into their daily lives can be intrinsically rewarding.

I would recommend talking to your builder regarding your concerns. When we are engaged in a cost plus contract with one of our clients we typically have well over 100 + line items in the cost break down. Its the same budget sheet we use when building a spec house. Of course there are some things that don't show up as individual items, for example the shutters you mentioned are typically part of our siding materials budget, but every builder does things a little differently so you should have the conversation with him, and I'm sure he can explain everything to you or give you the information you need.

"...How is acting like an obstetrician going to help you build a better house?..."

Another strong contender for Best Sayings of 2018!

Maybe I'm confused about how you are using the term "allowance", but for me it was a great convenience during the initial pricing of our house. The architect planned out the house and all the fixtures (lights, plumbing, appliance, etc.), and the builder gave us the name of his typical suppliers We just went around to the suppliers and picked out what we wanted, and then they gave us a worksheet with a total cost.

For example, we might have prepared an appliance allowance worksheet that came to $5000, and we used that in the estimated build cost, which also went to the finance company. We were never locked down to specific fixtures or appliances until we reached a specific stage of the build (those dates were identified). If the final cost was higher, we had to provide a check for the difference. If it was lower, it was managed as a credit that would be handled when the house was complete.

Bruce

The problem is that buyers expect Cadillacs for a Sonic budget. Both are Chevies, right? So that’s what they assume will happen. And builders have been conditioned by that assumption to include Sonic budgets in their estimates because when they give a real budget with Cadillacs in it, they lose the job to the Sonic budget guy who then charges the price of two Cadillacs to get not even one.

Thank you for the responses! Yes, we have another meeting with him and are planning to ask him about a cost break down of the hard cost, as well as more detail on some of the allowances. Our quote had only 30 line items in the cost break down. Since this is our first time building a house, we were not sure if it's unreasonable to expect more detail or if this is standard for a cost-plus contract.

We had already talked with him about the type of finishes & specifications like windows, floors etc we like, and the floor plan is very detailed.

@Bruce in Northern Virginia, if for example, the builder under budgeted the flooring allowances, you have to pay for almost everything out of pocket or pick the least expensive tile/carpet/hardwood if you want to stay within your budget. We want to make sure that these allowances are as accurate as possible. It's hard to do that if we don't know how much he budgeted for the bigger items in each allowance.

OP, see my post above, allowances are evil.

@strategery, this will be a cost-plus contract, but the builder calls them allowances in our case. It sounds exactly what you describe - 'estimates' and you spend as much as you want. Right now, we are trying to make sure the allowances/estimates he gave us will cover our specifications.

You’ve already given him a down payment and he is under contract with you? Because don’t expect a whole lot more clarification and time intensive line item work without paying for that work.

I disagree with Sophie. Ask and see what answer you get back. We got comprehensive examples of local builds and toured one that clearly showed us how the amounts allocated were divided up and what types of finishes that got etc. If you don’t get what you want from the builder in terms of clarity or transparency ask again or move on. It is your build and your money. You deserve to feel comfortable about what you are going to spend and where it will go and what it will get you.

Sounds like our experience was similar to Alison's. Builder provided examples from other recently built homes which supported the allowances/estimates (these were readily available so no extra work for the builder to generate). Using finish plumbing fixtures as an example, the builder gave us itemized selections/costs lists used in other houses; not the fixtures we were going to select but a guide to get us in the ballpark for budgeting purposes. Otherwise yes it can be very difficult to get the allowances/estimates "right."

Good luck at your meeting!

Just my 2¢...

Allowances, estimates, and bids are individual to contracts and builders, so asking on a public forum about other people's experiences will be of limited help. In the end, how your builder handles these things, and how they are formed in the contract are the only things important to you.

There is a lot of conversation here about allowances and their value, or lack there of. Allowances are not necessarily bad, wrong, or even a problem. However, what allowances too often represent is bad and a problem. Allowances represent a lack of information, they are essentially blanks to be filled in later with certain caveats. Allowances are fine for things like fixtures, lighting, flooring, cabinets, appliances, etc. so long as the homeowner has done proper research and understands the actual price of acquiring and installing those items. Even allowances of $1 are not a problem so long as proper pricing is known.

Homeowners can get firm quotes from approved subs for either products and installation, or just installation. If allowances are viewed as an invitation for the homeowner to fill in all the needed information then they are fine. If they are viewed as big blank boxes of trust, then you are in for trouble.

I have no problem with certain design choices being delayed until they can be visualized by the homeowner. So I personally don't think everything needs to be fully specified so long as the homeowner has done the work necessary to get legitimate numbers and expectations in those blanks. However, I think too often construction expectations are left vague, even when appliances and the like are fully specified. I personally believe that fully specifying how you want your house built is more important than specifying what floors you want.

Again, just my opinion, and worth every penny you paid for it.

@bry911

asking on a public forum about other people's experiences will be of limited help

Clearly not understanding why GardenWeb exists.

I think it’s a balance of what you both have just said. Yes of course advice online should be taken with a grain of salt but at the same time it does have value because it gives homeowners the confidence to speak up about issues that are happening and know their questions aren’t out of the norm

*hear

to be fair - as noted allowances themselves are not evil. I probably think a hybrid type contract might be best. Fixed pricing for excavation, foundation, framing, drywall, rough electrical and plumbing etc. and then allowances that are REASONABLE for the expected level of finishings for things like carpet, appliances, cabinets, etc. As it does allow you (pun!) to make decisions later in the process after getting a feel for the space, and decide where you want to splurge and where to save, etc.

"...allowances themselves are not evil..."

The problems with allowances are really very simple:

1. Builders use allowances in various ways for their own purposes; reputable builders fully inform their owners about how the allowances were conceived; not so reputable builders do not.

2. Many consumers, particularly first time builders, think that their construction cost in the construction contract, which included allowances is a maximum and all inclusive. When they can't get the desired and hoped for materials and work within a given allowance, many consumers are shocked, surprised and dismayed at the additional expenses reflected in the subsequent change orders.

3. Many consumers, particularly first time builders, become overwhelmed by the myriad decisions and limited time frame for the choices which have to be made within the builder's normal construction sequencing and schedule. Waiting until construction to make all of these choices is fine for many experienced folks; it can be never-wracking from many other folks. Read the threads.

At the end of the day, allowances all boil down to whether or not they are appropriate and "reasonable" for the nature and quality of the project, and if they reflect the owner's wishes.

Think about the beginning of a construction project: how many consumers and builders are exactly on the same page at the time a construction contract is typed up? The too often answer is that each party is in their own individual world, based on their own similar experiences.

Where does that leave consumers?

If one's budget is large and flexible; If one enjoy shopping for and paying for one's own personal choices; if one's personality doesn't really mind "surprises" of a financial nature, where one or more allowances is insufficient to cover the expenses of an owner's desires; if one enjoys making selection decisions in a short time frame; if one has done all this before and understands how the process works...then allowances may not be much of a bother.

On the other hand, if one wants their house priced all inclusively and wants to make the selection decisions up front and have them reflected in the total cost and schedule. the strategy is simple: eliminate all allowances.

Everyone has a choice. But knowledge is power!

My meaning was only that people on all internet forums communicate with absolutes, when in reality the world is rarely black and white, it is mostly shades of gray. Furthermore, just because something is generally true, doesn't make it specifically true, and people here often pretend that there is no regional or builder variation.

For example, many people talk about having to pay for a builder's bid. That is not the norm in my area, and frankly I find the practice strange. I have built two houses personally and several multi-family developments and never have I had to pay for a bid workup. I find the entire idea of paying a builder to bid a job seems crazy.

I suspect someone is going to mention the work that they have to do to produce a bid. That is complete B.S. I have had to produce bids a heck of a lot more complicated than any builder will ever likely face. That is what keeps bids honest and competitive and stops contractors from bidding jobs they have no real interest in. Creating an incentive to pursue only projects that you are interested in is the first step in a successful collaboration. I don't begrudge contractors for charging clients for bids if they can, but again, it doesn't happen in my current or former location.

There are lots of other specific cases where someone presents their experience as the norm, in reality that is just the norm for their area.

I am amazed at the number of people on this board who use the words quote and estimate interchangeably. Many of these people are obviously professionally experienced in their area, so I don't doubt them, yet a quote isn't an estimate. A quote is one half of a legally binding contract and when agreed to becomes a fully enforceable contract.