Live within your means is my advice. You gave a rant but not details, so if you post the plans and details people will pile on your thread with dozens of very good suggestions, but few you may like.

4 bathrooms? take it down to 3, but what do I know, you didn't post the plans. How may car garage, square footage....ect need to be known.

The 2nd Builder with allowances will be a hot mess with pricing. The ONLY way to get accurate pricing is to do what you did with the 1st Builder. If you need to pare it down you select less expensive finishes. You gave us no real context for anything about the home or the finishes. I have no idea what percentage the 75K is but if your that short you may need to push pause. Using all allowances is a recipe for disaster.

I don't think you are going to find wiggle room in that bid, since they did their best to come up with an accurate bid. Unless you can cut out some size, a bathroom and/or any "fancy" architectural details in the plan.

Architects designing a house their clients can't afford to build is a common problem we see on these forums. The solution is to engage a builder much earlier in the process, so that he can suggest cost cutting options to stay within the budget , while the design phase is taking place, and not after.

Does that bid include landscaping? Irrigation? Permits?

Another expense that surprises people is having to get blinds/shades for a whole new house.

Thanks. It was by no means a rant, rather a panic and asking if a builder's bid is negotiable? Seems the answer is no. We have never been through the home building process before.

I don't think my house specifics would pertain but it's 3 bedroom 2 1/2 bath on pilings since it is a bay front property. 2,300 square feet. All midrange options like lvp, United windows, CertainTeed siding, no landscaping, no appliances. In hindsight we probably should have worked with an architect at a builders.

Without knowing anything about the project, your architect apparently designed a custom-only-for-you design that is 10% within budget. Another bidder (when you have more than 2) might be 10% under, if you had enough data to plot it would be a bell curve. The unknown is if that $700K falls at the median.

"Architects designing a house their clients want, but later the clients realize they can't afford to build is a common problem." Sometimes clients are like a toddler being told by their parent to stop eating candy or they will bounce off the walls, during the process the budget can only be referenced as a guide, it can't be completely adhered to on every small decision until the design comes together complete.

And having a builder involved during design is not so much the antidote to overpriced designs as people think. Knowing the goal, the builder can lock in as much profit as can push and no one knows.

I can't imagine a builder being stupid enough to work out a proposal for a home the potential clients can't afford. The first words out of any builder's mouth should be "How much is your budget please?"

Hi, Tricia,

Your experience of being over budget is fairly typically when following a design-bid-build approach. That approach more often than not becomes a design-bid-redesign-rebid...approach. A design which exceeds your construction budget by only 10% is a good effort on the architect's part, in my opinion. Typically, construction costs for a design-bid-build approach will exceed the budget by 25% or more. Architects don't buy materials and trade labor; any cost references they have are for completed homes. That's like driving forward by looking in the rear view mirror. In addition, comparing the construction costs for unique custom designs can be like comparing apples and oranges. Throw in the effects of inflation and tariffs and you might need a Ouiji board as an estimating tool.

Whether you choose a design-bid-build approach or a design-build approach the challenge is the same: no one knows what it will cost to build the home on your particular site until plans with a reasonable level of detail are available for costing purposes. Our (design-build) approach is to produce a set of dimensioned concept plans which can be used for cost estimating the design before the client invests in a fully-detailed, fully-engineered set of construction plans. Based on the limited information in the concept plans, I expect the cost inferred to be within +/- 10% of actual cost. If it's significantly over the intended budget, we value engineer the plan to wring out costs without affecting quality. I find the value engineering opportunity is around 5% of the estimated costs. To get more than that in savings, you'll need to make more substantial changes to the design. Making those changes to concept plans is a lot easier than changing fully detailed construction plans.

Only 10% over at this stage is REALLY good! There are plenty who are 60% over at the initial quote stage. And this is why you have a contingency fund, separate from your down payment. Because costs are doing nothing but taking a giant leap upwards with the new tariffs that were enacted.

It's obvious that if a builder is brought in during design, will make a design meet the stated budget. However, there is no incentive for competition. So if competitive bidding, a contractor might use their chosen minimum of say 15% to try and win the bid, but as the fox in the henhouse, it can be any arbitrary number, say 70%, even 150%, as long as it looks reasonable and budget is met.

Paying a contractor for VE services during design helps to limit play in numbers, but there is still psychology involved with numbers as they are usually on the shortlist to bid.

You can only be aware of this if you have been involved from the design side, the client side, and the construction side. It may not be stated in textbook definitions of O-A-C relationships or DesignBuild, but it is reality and human nature. In the end, the price for a homeowner is the price.

Custom builders in my area aren't signing any fixed price contracts. They will only do cost plus. Too many unknowns these days for smaller builders to take on that risk. If you want custom you need to have plenty of cash reserves to cover any unexpected site dependent issues and/or material and labor price increases.

Some friends built with the "custom" division of a large production builder. It was "fixed" price, but a few months after nothing happened on their lot, the builder demanded more money to get started. My friends paid, but that set the tone for the, not so pleasant, relationship they had with the builder for the next 18 months.

^^The same is true in our area. We transitioned away from fixed- price contracts during covid-19. Our custom homes are all contracted on a cost-plus-fixed-management-fee basis. Clients have full visibility of costs beginning in the design stage. We are not rewarded for cost increases in materials or trade labor which we consider a fair exchange for the client taking on those risks. We also eliminated a lot of administrative time and expense for change orders (they are used only to document changes from the contract documents, but the cost is whatever it is and we don't add any mark up.) Folks who want to shop around can simply compare management fees and the services provided in exchange.

Seems that if you want to build a $700K house, get a plan designed to cost $500K to build.

For a 2300 sq. ft. build the bid seemed high to me but it depends on location. What I want to know is if the price of the bay front lot was included in the total price? Or was the lot already owned the op? To me bay front means a lot twice to three times as much as other lots farther inland.

I'd love to see everyone get every thing they want but most of the time it just doesn't happen.

2300 only covers heated sq footage. The 3000 sf of porches, decks, garages, and other areas till cost to build. I don't think you have a clear picture of what builds cost in 2025. Much less what they will cost as prices escalate out of sight due to a stupid tariff war.

I don't know how you conclude "the bid seems high to me" without understanding all of particulars of the home design and the associated construction costs. The OP related that the house will be constructed on pilings. The cost to install pilings will depend on the number and depth, but could easily represent 10% or more of total construction costs. Comparing the cost of a home on pilings to a home on conventional footings is an invalid cost comparison.

Pilings are expensive per square foot. For us, it was cheaper to build up our lot than it was to build on pilings. For a 1700 sq. foot home in my area, pilings cost 100k.

Unfortunately it’s super common for a home to be designed that is out of budget. Budget may be too low, design too custom, selections too expensive. 75k over at this point is nothing. Your budget needs to have enough space that you can tolerate 20-30% more overall. Things absolutely will come up, prices will change, it will never cost less. Our initial budget was 1 million and in the end it cost 1.2 and that was with us cutting and changing things but unexpected excavation costs came up and lumber prices skyrocketed.