Chicks in Construction

In this episode of Chicks in Construction, host Mikki and guest-host Allison King discuss the challenges and triumphs of working with general contractors (GCs) on home building projects. Allison, from Clarity Design-Build, shares her journey from starting in sales to becoming a project manager, and highlights the importance of knowing what you want in a custom build. They delve into details about site conditions, allowances, and how to protect yourself financially during a construction project. Both hosts emphasize the importance of having everything in writing and controlling the finances to ensure the project's success. Whether you're considering building a custom home or renovating an existing one, this episode offers valuable insights to help you navigate the process smoothly.

00:00 Introduction to Chicks in Construction
00:48 Meet the Co-Host: Allison King
01:20 Allison's Journey in Construction
01:55 The Challenges of Working in Construction
02:39 From Sales to Project Management
07:34 Building Spec Homes and Custom Projects
13:11 Understanding Home Building Costs
28:03 The Importance of Inspections and Surveys
31:28 The Importance of Licensed General Contractors
32:27 Getting References and Vetting Contractors
34:21 Financing and Construction Loans
36:40 Understanding Liens and Waivers
41:40 Managing Expectations and Budgeting
55:42 Custom Building vs. Production Building
01:00:40 Final Thoughts and Takeaways

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Creators and Guests

Host
Mikki Paradis
President & CEO at PDI Drywall Inc. Mikki founded her first construction company, PDI Drywall Inc, in 2005 while she was still a student at NC State. After growing PDI into a multimillion dollar company, she has become an accomplished entrepreneur, speaker, and advocate for innovation in business and leadership. With a passion for empowering others, she has built a reputation as a forward-thinking professional dedicated to driving growth and fostering meaningful connections. Known for her dynamic energy and ability to inspire, Mikki is deeply committed to creating positive change in her industry and beyond. Whether through her entrepreneurial ventures or speaking engagements, she consistently challenges the status quo and encourages others to reach their full potential.
Guest
Allison King
Chief Operating Officer at Clarity Design-Build

What is Chicks in Construction?

You plan your renovation with excitement, trust your contractor, and hope for the best...until things start going sideways. That’s when most homeowners realize they didn’t know what they didn’t know.

From permits that were never pulled to “contractors” who ghost after demo day, the construction world can feel like a maze of hidden costs and shady shortcuts. Too many homeowners end up confused, overwhelmed, and out of a lot of money.

The Chicks in Construction Podcast is here to change that. Hosted by Mikki Paradis, a licensed general contractor with 20+ years of experience, and Jess Aper, a homeowner turned construction content creator, this show breaks down real renovation horror stories and teaches you how to protect your time, money, and home

This isn’t just another DIY podcast or contractor interview show. Mikki and Jess pull back the curtain on what goes wrong in home projects, translating industry talk into plain English and giving you practical steps to avoid common (and costly) mistakes.

After building a multimillion-dollar drywall business and helping countless homeowners recover from construction nightmares, Mikki is on a mission to make sure you go into your next project informed, not blindsided. And Jess brings the perspective of someone who’s been in your shoes and now knows exactly what questions to ask.

Want to renovate smarter and spot red flags before they wreck your project? Hit follow and get ready for real talk, expert advice, and stories that will make you say, “Thank God I listened to this first.”

Submit Your Construction Horror Story: https://chicksinconstruction.com/

17 Chicks in Construction Alsion King
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​[00:00:00]

Mikki: Welcome back to the chicks in construction where we shared the good, the bad, and the ugly of the building life. Now, we've told plenty of horror stories where the general contractor plays the villain, but every story has two sides. Kind of like drywall. Today we're talking with a GC who proves it's not always doom and demo because let's face it, learning the hard way is overrated.

Mikki: well, hello and welcome back to another episode of Chicks in Construction. I'm your host, mic Paradise, and today we have a very special guest. We have Allison King as our co-host for the day. Allison, tell us a little bit about yourself. I am Allison King. I'm with Clarity Design Build.

My husband and I own the company. [00:01:00] Awesome. Um, we have both been in construction. Yeah. You in LinkedIn references some, some hard hitting construction background, like don't get it twisted y'all. She's just not, she's not some lady who, her husband's a gc. Yeah. Nope. She's, she's got credentials. I, I earned my own credentials.

Came up through the ranks. We actually met in the restaurant business. Oh wow. But yeah, that's how we initially met. Um, but when I moved to North Carolina. Um, once we decided it was gonna be, you know, yeah. It wasn't just like a funsies, like funsies restaurant thing, not just a fling. Uh, I went and got my real estate broker's license.

Okay. So, and I started in onsite sales. Okay. Yeah. To brothers. Oh gosh. Yeah. That's, that's, hi. That's in the trenches. I, so I've never officially been in like, general brokerage. Okay. But I, I did start in sales. Once I was at Toll Brothers, I decided that I wanted to kind of work my way through and be a project manager.

Okay. Um, and luckily I had a lot of, you know, the construction world is very [00:02:00] heavily men based. It is. I had a lot of gentle in there that believed in me. Yay. I love that. Right. Yay to whoever that guy was. 'cause there's so few people that are like encouraging women, like, oh, you can do it. They're like, you suck.

Why are you here? You're too pretty to work in construction. You know how many times I've heard that? And I'm like, oh, I'm sure. Do. So I need to be ugly. Right? Like, I don't, how does that work? What, what? So, yay. I'm glad that you had that experience. I did. I had a, I did have a good experience and I was encouraged, but, well, I was told, you know, you don't really know how to build a house, right?

I mean, absolutely. Right. I don't know how to build a house, uh, but I will learn. Yeah, yeah. Um, so I kind of worked my way through a bunch of different positions at Toll Brothers in the fund. The first one that I got from going from onsite sales was called Project Administration. Okay. And, which basically meant I paid the bills, I dealt, I dealt with the purchase orders.

Oh yeah. I dealt with the vendors. Oh yeah. You're, you're, you're the lady who, I'd be like, I'm not dropping my, I need my [00:03:00] money, my price. I'm not drop my price. And also where's my check? Right. Where's my check? And back then, you know, it was 2004, 2005. Oh God. Yeah. It was while time, which doesn't feel like it's that long ago.

No, right. No, it was just a couple years ago. It was just a minute ago. Just the other day. Um, they would have to come into the office Yeah. To pick up their purchase orders and stuff. So I got to meet a lot of the vendors and paying by cost code. Yeah. I kind of learned, oh, this is how a house goes together.

Yeah. So it's actually a really good stepping stone to the next step. Framing. Mm-hmm. Like all these Okay. We different lot and then we gotta do the footers, you know, that. Um, so I'm glad, you know, and I to learn the vendors. Um, so then, and then I got to be an assistant construction manager. Awesome. So I got to, to get into that world.

Yeah. I took the houses from drywall to completion. Nice. I got to deal with homeowners at the, you know, at the best and the worst time. Yes. Where it gets real at the end [00:04:00] where it gets real. Yeah. Um, they gotta sign the, the million pages, um, and then the warranty process afterwards. Yeah. So, um. Oh yeah, I did residential for a very long, very short period of time.

I, I, it felt long, it felt, it felt like a whole lifetime, right. I was very short and I realized very quickly I was not, it was the homeowners that I was not meant for. Like, um, like when they would do the customer walk, I think like in there was like this thing in their mind where it's like, if I put blue tape on things where there is nothing mm-hmm.

Then I can say later when it gets damaged there, I had put blue tape there and you didn't do anything about it. And it would, I would walk in and it would lay like the, the, the houses would have like chickenpox and I'd be like, what? Mm-hmm. What? What's that? What is happening right now? So I, I tended to be that person.

Yeah. When, when I was, because in my mind I was like, you know what, if I come in here and I overanalyze it to death? Yeah, yeah. Then the chances are when the homeowner comes, it's [00:05:00] gonna be a better experience for them. Yeah. Which ultimately is gonna be, selfishly it's gonna be a better experience for me.

But your painter ends up painting the house twice. Yes. They thrice. I had, you know, had baked some banana bread and, you know, I, I became friends with them, but they definitely, they called me the smurf killer. Oh. Oh, dad, the blue tape, y'all. That's the blue tape. Oh god. Blue tape. My God, today. Yep. So this is why I do apartments.

It was green for drywall issues and it was blue for paint issues. Oh. Oh. That's a, that's a good system. They needed to differentiate when they needed to point up or they needed, honestly, that really is because a lot of times the drywall is like, I don't, I don't see anything. Right. They're like, it's paint related.

I'm like, a lot of times they just go through and they're just, and they just take Yeah, no, they take the tape walls, homeowner right off homeowners to know that too. Like if it's really not that noticeable. Don't waste your time putting a piece of blue chip on. Yeah. Because if you can't see it from six feet back Yeah.

Yeah. There're probably not gonna, there's like rules that we have internally whether you have them or not, right? Like, we're just like, no. Uh, and it's like it has to be visible in like any kind of light. Mm-hmm. So if like, I have to [00:06:00] be there specific at 4:52 PM in order to see this like, weird thing on your wall.

Yeah. Sorry. It's probably not worth it. Not not within my scope. Yeah. Yeah. Or like, you know, if I have to be standing this close to the wall in order to, or you get a flashlight out on your phone. Yeah. Your tactical flashlight with 2000 looms. And I was doing it before we had, you know, these fun iPhones.

We had the, you remember the next, next, oh, I had my Nextel. I was like, um, but I did have a one, one time who actually brought a flashlight. Got down on his hands and knees. No. Yeah. And I was like, sir, is that how you live in your home? Right. And he's like, no. And it's like, think get up. It's a like, if you don't do that, we in your home now.

Like there's no need to do that now. That's great. So you started out, you learned all the things and then from there I went to a smaller local builder. Okay. I kind of worked my way through there and got with the beauty about a smaller builder is that I could get my hands in kind of anything. Oh yeah. So if I [00:07:00] wanted, I got involved in plans.

Oh. And I got involved in design and I started staging our homes. Oh, fun. Like our great homes and, and so that part of it I really, really loved. Um, and my husband actually worked with me for a time at the same company and we had kind of created a little division in there, which was a kind of a completely custom because it was more of a production environment.

Um, and so we decided in 2018 to kinda create our own thing. And so that's when we developed clarity and we both left. Love it. Um, and. You know, we've been kind of doing it on our own ever since. We mostly focus on inventory home or spec home spec, what we call spec homes. Spec homes, speculative. So just so you guys know, a spec home is a home that they are building that nobody has purchased it yet.

So when you're seeing new construction home that has the for sale sign in it, that is a spec home and it's something builders build. 'cause they're like, we know that people need, we are hoping you're gonna love it. Yes. I have about 17 spec homes in my neighborhood ranging [00:08:00] from 1.2 million to $6 million.

And I'm like, y'all don't need to move up in here. 'cause listen, I'm still, we still the clamp. Its like my, my little 1972 split level ain't going nowhere. Mm-hmm. You can keep building these mansions, but I'm still moving. Someday they're gonna, are they, are you getting calls? Oh god. Are you getting letters?

God, non stop. Mm-hmm. Like not, we have an invisible offense and for wild dogs, like completely. The chart's wild. And one of them is a 225 pound English mastiff. And so that has helped a lot. Keep 'em at bay. Oh yeah. Like I just, the dogs are out all the time and people are just like, nevermind, nevermind. And I'm like, yeah, that's right.

Nevermind. People go around you. It's like my security system is working very well, but yeah, no, for a while there it was constant. Yeah. So, but I mean, we're in one of those neighborhoods where they're tearing the houses down, splitting the lots into like two or threes, and then building the, the mansions or in some cases the mini [00:09:00] mansions.

Those, those are the $1.6 million ones. Yes. The $6 million one has. Um, so what they did was they bought two lots that were back to back and they built this monstrosity. Monstrosity. It is the biggest, I'm like, who in our area? Like I get if you lived in la everybody wants a big house, whatever. Okay. But I'm like.

Who needs a house as big. It has a pool, it has a a tennis court. Oh my. And it has a putting green. And I'm just like, do they want to live in the same neighborhood as me? Like, I think not like they want a gated community. Right. They don't wanna be driving around with me and my wild ass dogs, you know?

Like, but okay. Somebody built it. So that is what a spec home is. Right. So you guys mostly build spec homes? Yes. What is your I we will do pre what we call pre-sales, where we're, where we're working with clients and customers. Okay. It just depends on kind of what comes our way. Yeah. But for the most [00:10:00] part, we started out, um, he's the gc.

Okay. And we just started out like, let's kind of. P you know, you do the design, I'll do the building and, and let's see if people like it. I have seen a really hilarious, I think it's a real, I don't, it probably started on TikTok. 'cause everything starts on TikTok, but it's like a, it's a gc. I'm pretty sure this husband sent me this one.

It's like the designer comes up with an idea and the GCs like in mid-sentence. Mm-hmm. And then they just split to another, I'm a designer and I wanted a floating deck in the middle of a coy pond. Yeah. And it's like, I'm the GC and I'm the designer. That's exactly what it's, and it's like, and they don't care what the GC has to say.

The designer's like figure it out. Which I feel very close to my heart because that is so much of what building anything is. Yes. It's like somebody draws it and they're like, you go figure it out. Yep. And it's like, yeah. The thing is gravity, you know? [00:11:00] Right. The loss of physics two command and to play to love to do that.

But honestly there's just a lot of physics that just aren't gonna help you make that happen. So I feel like I have that conversation with an a budget or budget, sometimes physics can be defied. Yeah. But, but take a lot of money, lot money to defy gravity as one would say. Um, okay. So you from time to time deal with homeowners.

Mm-hmm. One of the things that on the show we have not been accused of, but we've, uh, had some feedback. Yeah. That we are a little, we're a little rude to the GCs bashing those builders. We're bashing the builders. So I brought you a builder. Okay. 'cause fair and balanced. Right. And every time I say that, I'm gonna laugh a little bit.

Um. So it was that, that, that we're beaten up on the GCs 'cause we're only telling the bad stories about the GCs. And I was like, well, somebody GA gc, come on, come on the show. I had to find her. [00:12:00] But she was very willing. She was very willing to come to the show. Yes. Because really what we want is, okay, so what are homeowners doing or buyers doing that is making them either just like, eh, no, I'm not gonna work with you.

Yeah. Or like that's making it harder for themselves. Encouraging kind of this like, okay, that you're acting crazy, I can't deal with you anymore, kind of thing. It's contentious. What can we say to the homeowners to help educate them so that they can have a better experience when they're buying a spec home?

When they're buying a custom built home. Mm-hmm. Obviously it's different from a renovation, but knowledge is knowledge. Okay. Well, I think even renovation. I think for custom and renovation side, a lot of times what it comes down to is. That, that front end mm-hmm. Can start a lot of irritation or, you know, contentiousness.

Um, when you say front end, you mean like the beginning? In the very beginning. When, if they're, you know, a lot of people come to us [00:13:00] and they're like, well, um, we, we wanna build a house in, we build a lot in Chatham County. Okay. So we wanna build a house in Chatham County. And they don't have a plan. Yeah.

They don't have a lot. Okay. Um, and then, but they wanna know like, what's your price per square foot? Yeah. And you're like, uh, I need to know, you know, I wanna build a 3000 square foot, three bedroom, two bath, what, you know, whatever the parameters are. Right. But there's a lot of Yeah. Sway in Right. Want how you can go do, do you want granite countertops?

Do you want Carrera marble? I mean, it, you can go crazy up in here, but, but you know, just the basics. We just want the basics. Yeah. You know, but, but they don't have a, a home site either. Okay. And so home site conditions. Oh god. Well, a lot of that stuff. Can, can swing the numbers a lot. And so they can, it can get, you know, they get irritated with Why, why can't you just give me a number?

Yeah. And it's, I'm like, well, if I gave you a picture of a cake and some make this cake perfectly without any instruction ingredients. [00:14:00] Without any ingredients, or even if I gave you the ingredients and said, there's chocolate, there's flour, there's eggs, there's butter, but no amounts. Right. Oh. Oh, this is such a good point.

You know what I mean? No amounts and no, no idea what to bake it at. Yeah. The temperature and no idea how long to bake it. Right. You probably would not be successful. Right. And there would be a lot of expectations that would just be that. It's such a good point. So it's really about knowing like what you want.

So, okay. So how does, and that's really difficult. Yeah. Because they don't know. Right. And they don't know what they can afford. Right. So it's like the chicken and egg thing. Yeah. Multiple times over because. We, you know, if we're working with somebody and they don't have a plan, then we want to take them to an architect.

Right. And then, but there's cost involved in that. Right. Right. Yeah. There's, there's time on our end. You know, I'll sit and try to, if you tell me the parameters, I'll, I'll be, um, you know, if you came to me, I'd be like, okay, well, let me see if I can find a plan that's really close. Yeah. To what you're looking at.

Yeah. I'll give you three or four options. Okay. So that if we did then go to an architect, we're not starting from scratch. From scratch. From scratch. Okay. Yeah. [00:15:00] Um, that's smart. And then, but then the architect's gonna cost money. Oh yeah. The engineer's gonna cost money. Oh. All the money. And then you might find out that, oh, when it gets to the engineer, we just designed a house that's much more expensive to build than, than we originally thought.

Right. Um, but it's, again, it's difficult to get to that pricing stage. Mm. Until you have the ingredients. Yeah. Um, so it's, it's a lot of back and forth, but it can, it can really discourage homeowners. Yeah. And I do feel bad for them. Yeah. Because I get it. Yeah. I mean, I wanna know how many, how much things cost.

That's the thing is like, people don't know what they don't know. Right. So they, they think that they can come to you and say, Hey, I wanna build this house, this many square feet. Feet, what's it gonna cost? Mm-hmm. And they have no idea that that's just not how it works. And so that's what we're trying to do on the show, is really to help educate homeowners.

Like, okay, listen, like the cost of your lot could dramatically affect the cost of your house. Mm-hmm. And land is, that's the only thing they're not making. And the conditions of that [00:16:00] lot conditions, you found a lot and you're like, this, I found this amazing lot in the middle of, you know, inside the belt line for a hundred thousand dollars.

Yeah. In my head I'm going, ho, that's gonna cost you a lot more than a hundred thousand dollars. Right. There is something wrong with that lot. Yeah. The fact that there's any lot inside the BeltLine that still exists and has not been built sign, it's a cliff. Something's horrible. There's water issues, it needs a retaining wall, 40 feet high.

You know what I mean? There are a lot of things that are, you can tell, are wrong with that lot. I mean, if you find a lot out there that's perfectly flat, you know, my husband can give you a really good number on what that foundation's gonna be. Yeah. There's a lot, you know, if there's a lot of topography, there's a lot of undulation in that.

Yeah. It foundations are our, our personal home foundation cost way more than we thought it was gonna be. Did it really? Yeah. It was in the middle of COVID too, so, oh, we built the dumbest, you did build at the worst time ever. You're like, it'll be fine. It was not fine. Don't do that. Don't do that. But it, it, it definitely, [00:17:00] you know, you have to have an idea of the type of selections you want.

'cause you will get a, you will get a lot of allowance. If you get a price and you're gonna wanna talk to a lot of different GCs Yeah. Or builders. Um, if you get a price that's very, very detailed, but you don't have a whole lot of information to provide, don't trust that. Okay. Don't trust that number.

Meaning like, if somebody comes to you with like a, or a very low price when you have, when you don't have a lot of information to provide, okay. They're, they're making it up and oh, you're probably gonna feel it somewhere else down the line when you say you're gonna feel it. Orders. Okay, change orders.

That's what I was about to get, like, get to how is that gonna catch up? Include that or, you know, I didn't know about this, or, you know, or they'll give you low allowances to make the price look good. Okay. And then you get to the tile store and you can't afford anything. Right. What, how, how, what is an allowance and how do allowances work?

So an allowance would be on most mostly selection type things. Okay. So like a lot of builders. So she says selection, she's talking about countertops, interior selection, tile flooring, [00:18:00] flooring, carpet, all of the, like the finishes. Um, cabinets. Yeah. Cabinets. So you can look it up. Even if you had a plan, that kitchen is a good outline, right?

You can get dimensions, right, but what you put into that kitchen, oh, I design cabinets. So it can, it can change the, right, the type of manufacturer that you use, right? Whether it's all plywood, construction, inset doors, soft clothes, the soft close, everything. Um, the finish that you're gonna pick on it, the, the species of wood.

Yeah. Whether you're gonna put a bunch of, bunch of bells and whistles in it, like inserts for everything. I pullouts for everything. I love a, you know, I do too. Um, please put, put it all inserts in it, and then, and then you realize that one insert is $750 and you're like, what is the convenience worth over time?

What's my ROI, what's the ROI on this $750 drawer? Pull out? Yes. Yeah. Okay. So an allowance basically, because you as the, as the builder, do not know what [00:19:00] these people really want you say. Okay. Yeah. You get this much money mm-hmm. For your cabinets, right. If you go over that much money, you're paying for it.

Exactly. You get this much money for your flooring. If you go over that, you're paying the difference. Mm-hmm. And so, and so what the builder should be doing is trying to get in as much information from you as possible, even if you don't have the perfect plan, even if you haven't gone and done selections yet.

Okay. They should be like, what's your Pinterest page look like? That's what I was about to say. Be like Girl house look like, bring those Pinterest pictures and then the GC will be like $1 million. Right. You know, you want some whimsical, colorful tile that's gonna cost you more money than, you know, wooden colorful tile that you'll tear out when it is no longer fashionable in five and a half years.

Yeah. I made that mistake in my bathroom, in my master bathroom. Um, listen, it is what it is, but that is what you know, obviously. You're trying to get an I people are [00:20:00] trying to get an idea from like, can we, what can we afford? Right. But you kind of have, you almost have to back into it a little bit. And you have to be willing to make compromises along the way because if your budget is here Yeah.

And you found a lot that costs, you know, a third of that budget. Right. And then there's soil issues or, you know Yeah. It's gonna whittle it away. So you either have to be able to increase that budget Okay. Or you have to be able to, um, make compromises where you can. Yeah. And a and a good builder is gonna ask you a lot of questions.

They're gonna go through your Pinterest page with you. Yeah. They're gonna give you, set those expectations. Um, and they're gonna try to give you realistic allowances. Okay. And not just give you low numbers so that initial number looks good. And then you get blindsided either. Yes. So that's something that I wanna drive that point home.

Um, when you're, and this, this isn't just cover new construction. This is, they do the same thing in renovations. Mm-hmm. So yes, the, the whole concept of allowances, um, [00:21:00] some builders, and again, not all, some builders are, are great. This one's great right here. Uh, some builders because they want the, the business, right?

Mm-hmm. So they know that you don't know how much cabinets cost, right? So they give you a budget, you're redoing your entire kitchen, and they give you a budget of $15,000 for your cabinets. That's getting you builder grade basic cabinets. Basic cabinets. So when you get to the point where you see the, like the options that $15,000 is gonna get you, right?

You are very unhappy with it, and you're like, no. And so that's kind of how they get you. Mm-hmm. So that initial guy who gave you that number that was way higher. Because his allowance, he had seen your Pinterest page and he knew that you wanted these mid-century, modern all wood cabinets and knew those cabinets alone were gonna cost $30,000.

And so your cabinet budget was $30,000 and you went with the cheaper guy, you're still paying 30,000, you're still paying $30,000 for those cabinets. You're just now much more [00:22:00] irritated by it, I think. Right? Yeah. I would think, I mean, it's, it's, again, it's are you gonna get realistic expectations upfront and come to deal with it and, and work it through with your builder, um, as you should, I think 100%.

Or are you going to be frustrated at almost every step of the process because you did not get realistic numbers? And a lot of builders will do a lot of allowances for things, and that's how they'll kind of get in the door. They'll, they'll do some allowances for things that, you know, wouldn't normally get an allowance for.

Okay, give me an example. Well, I know that during COVID, and this actually somewhat makes sense, so it might not be proper for the point, but it doesn't make sense. Now, when it did that, when framing, when framing and, and lumber packages were going mm-hmm. Insane. They al they had to, right? Yes. Yeah. Yeah. But if you have a plan, they should be able to do a reasonable takeoff.

Yeah. Um, and know that it might fluctuate a little bit, but that builder will eat it if they're not. Yeah. So let me explain this to you guys. So, until COVID, the way things [00:23:00] worked in construction was we would get pricing. So I, as a drywall contractor would say, Hey, I'm gonna bid this job. Mm-hmm. It's gonna be, it's not gonna be for two years.

So they would give me projected pricing that they would hold, they would hold that pricing. Yep. So that, for the, for the duration of the project. And you know, they don't because you're mostly multifamily, right? Yeah, I do multifamily. Yeah. You're doing large, large projects. Yeah, I'm doing really big projects.

So the pipeline, lot of delays. The pipeline is, is a lot longer. There's a lot of delays. It takes a lot longer for me to start. So like when I turn in an estimate a, a good year to two years mm-hmm. Could have gone by. And that number still needs to be honored. Now sometimes I'll, you know, before I go to contract, I'll go back to my supplier and be like, Hey, are these numbers still good?

And if they're not then we, you know, I deal with that with the general contractor. But the way things worked was the, the prices, the price was the price. If you got a price, they locked the price in. That was your lumber package price and then COVID happened. Yeah. And nothing, it was like a combination of COVID [00:24:00] and some kind of evil Beatle in, in Canada.

Oh yeah. The Beatles. Yes. And the Evil Beatles. And a fire and a storm in Texas. So it was like, it was like. The, the perfect storm of what just happened. And it turns out a crap ton of construction materials are made outta the byproduct of processing petroleum. Mm-hmm. So paint. Paint, yes. Is a byproduct of processing petroleum.

So when this crazy storm in Texas happened, all these petroleum centers that processed the petroleum were damaged like roofs caved in. It was this whole nuts so situation and all of a suddenly we didn't have paint anymore. Yep. And paint was $9 million. And the thanks to the Beatles and the fires and COVID plump or, um, you couldn't get pipes for plumbing because PBC, and that's a byproduct of petroleum for framing.

Went [00:25:00] insane, like on our jobs. Mm-hmm. We had one where the, the framing package went up $600,000. Now obviously that's, that's an apartment complex, so not so a lot of units, but still that's a significant, it's even significant, a significant percentage, you know, based on the total sale. And so that, that same thing happened in residential and they were hit the same way.

Mm-hmm. And so anybody who built their house, I'm so sorry for you. Yeah. During COVID, they don't have to live in it for a long time. And it was, it was very, you know, and I felt so bad for people. I used, I would talk about it all the time. 'cause I'm like, it's not even. The pretty stuff. Yeah. It's not even the same.

It's the stupid that you get look at every, every day plumbing that you're so excited to come to. Yeah. Yeah. It's stuff behind the walls. Yeah. Yeah. That, you know, that just, it's like, oh crap. Now that during COVID made sense to have an allowance for that. Mm-hmm. But doesn't make sense so much anymore. So not really anymore.

Prices have stabilized and there can be like, every once in a while my drywall supplier will be like, oh, we're gonna have a price increase. And I'm like, it's usually you [00:26:00] get some sort of notif, we get a, we get notification and then, and then there's like negotiating of like how much my price increase is actually gonna be, and do you really wanna keep my business?

Right? Yes. Yes. So. During COVID, it was non-negotiable. The prices were the prices and if you wanted the lumber, if you wanted the drywall, if you wanted whatever it was, you were gonna pay that price. Mm-hmm. Um, do I think that was like C'S fault? No. Do I think that was greedy people's fault? 100%. Oh, I definitely feel like that 100 they saw, they saw the opportunity and they're like, if you want the house, then you gonna pay them money.

And it's like you're able. Yeah. So that is not so much a thing anymore. So I think when you are dealing with a builder and you see an allowance for a price increase for a material, that's something to that, that maybe is a little bit of a red flag and you should know anything that is anything really you should get a scope of, of work.

Yes. And, and a scope of kind of materials and things that they're basing, what they're basing that estimate on. Okay. Again, in order to get to [00:27:00] that estimate, they have to have good information. Garbage in, garbage out. Right. If you're just giving 'em a sketch on a napkin, what you get. Is not going to be a really accurate Yeah.

Yeah. Price. I laugh at sketching a napkin because I, uh, bought a lot a couple years ago up in the mountains and I was like talking to a gc and I'm like, what's the process? Did you have sketching a napkin? And he goes, he was like, honey, let me, let me just, you need to calm down now because we up here in the mountains, we can build off a sketch on a napkin.

That's what he said. And I was like, honey, oh, I'm sure they can, we ain't building mountain houses that are hanging off a cliff based off a sketch on a napkin. But that guy, and I bet you he's built a million of them and they're all amazing, but I was like, no, I'm gonna need plans. My guy, like, he was like, I can get a permit based off a sketch on a napkin.

And I was like, oh, dear God. Like could probably pass all the inspections without an inspection coming out. Probably do, [00:28:00] probably do that. That is another, we will get to that. Yeah. I'm gonna mark that in my mind to come back to, because a lot of people are like, oh, do new construction houses need inspections?

And I'm like, absolutely. Yes, absolutely. My God. Today, inspections, surveys, like get those things. Yeah. Some builders do not have to get based on the depending on the municipality, they don't have to get as-built surveys. They just have to get the one on the beginning. And for the foundation survey. I swear to God, I don't even think my h my lot had a survey done at all.

I don't When they, I think like the, the builder who built it, built the, they, they owned all that and they were just like, you know, what're gonna put one here, we're gonna put one here. Because when I finally got my survey. My driveway was on my neighbor's property. And I was like, how is that possible?

They're like, it's fine, it's fine. Next person's problem. Put it here. It pretty much the next person's problem. Luckily the people who bought the house next to me could have cared less, but like, it could have been like a Put your [00:29:00] driveway. Yeah. So I'm like, sorry, you can never move. Right. 'cause I'm gonna die in this house.

There's no way. Or you have to pay to rip it up and move it onto your own property. Pretty much. And I was like, oh my God. So please always, yeah. Get a survey if you're doing, and if you real estate, if you, even if you're representing and you have an agent and they're like, oh, you don't know you can get a survey.

Don't get a survey. If somebody says they don't need a survey, get a house inspector. Don't get a get. Always get it. Always. Spend the money. Spend the money. Now. Now what I will say is I did deal with a situation where there, there was buyers for the, for my neighbor's house and they got a survey. Mm-hmm.

And something happened and it didn't work out. And then the next people got a survey too. And I was like, guys, the aren't the surveys public record? Mm. So they could have just gone and pulled that brand new survey and like, the things were marked, I think depends by, don't need two surveys. You mean you certainly look up on the, the GS maps for the county that you're living in Yeah.

And see what is already public out there for whatever you're gonna buy. Yeah. But if it's not up to date Yeah. If things have been done on the house. True story. Always get inspections. Always get inspections. Always get surveys. We, we, [00:30:00] we preach that a lot around here. We always the inspections piece, like I, I thought it kind of, it came with the territory.

So when we're talking about hiring a licensed general contractor mm-hmm. Making sure they're pulling permits. I thought that everybody knew then that when we're pulling permits, the purpose is for the inspections. And apparently that did not get translated. Wow. So I made an assumption that people knew that that meant inspections.

Mm. So we, we just did a homeowner horror story where, um, the, the person. Did the whole house. They pulled the permit, did the whole house, and didn't get a single inspection. Just kept rolling through. Just kept rolling through. And so finally the homeowner thinking she's helping Mm. Calls in the inspection and the GC loses his mind because he had done everything wrong and now he's about to get caught.

And he knew it. Yep. And it was like this. Yep. It was the most [00:31:00] dramatic, like she was, he was so mad that she was like, afraid that he was gonna come to her house and like hurt her. That's how angry he was. Wow. Because he knew he was about to get into a Yeah. And he did get into so much trouble. Um, so yeah.

As you should licensed general contractor. Mm-hmm. Step one, permits. Step two. Bonded insured. Bonded and insured. Oh God, we've talked about that. Yeah. A, a little bit. Probably not as much as we've talked about. Um, the importance of having a licensed general contractor. Yeah. Checking to make sure that they're licensed.

Mm-hmm. Because a lot of people say that they're general contractors, but they're not licensed. Yeah. And so we've actually had people try to come on the show and, and Jess will kind of weed 'em out and be like, so I looked you up but I couldn't find your license. And they're like, oh, we're not licensed. And Jess is like, do you watch our show?

Like all we talk about is licensed general contracting. And I mean, and I also don't, I say [00:32:00] this, I'm not trying to like talk smack about anybody that might be newly licensed because obviously there was a time in my life Right. That I was new at, at everything I've done. And same for my husband, same for anybody.

But the GC test is an open book test. It's true. It is five and a half hours. But it is open book. It is open book. It doesn't mean it's easy by any stretch, but if you do enough reading, studying, and marking Yeah. You can pass that test. Yeah. So you also, you know, you wanna make sure that you're also getting references.

Yes. And, and doing. And if they are brand new and they don't have a lot of references, then you just do a lot more, you know, do a lot more interviewing. Do a lot more dating. Yeah. A lot more vetting. A lot more vetting. Yes, yes. Um, but because everybody has to start out, right. Yeah. You know, and that's, that's, it's, it's so funny that you say that.

'cause like I, I struggle with that a lot when I'm giving people advice. Um, you know, whether, and, but it also depends, like, so for instance, we worked with this guy on, on one of our, with one of our clients that, uh, they do [00:33:00] multifamily, but they also do single family, they do custom, they do literally everything.

Okay. And so he was new to multifamily and we taught him like everything. 'cause he was this little sponge and we loved it. Yeah. 'cause he wanted to learn things. Well, eventually he had enough, you know, time and under his belt where he went and started his own GC company. Now if you look at it, you're like, oh, he's new.

Right. But he has, yeah. But dude, this man has more experience in building things. Yeah. I mean, and so they're like, references sometimes mean talk to people they've worked with. Right. Not just necessarily somebody that they've built a home for or done a referral for. Yes. So that's a good, yeah. She just, just wanna point that out.

She just said references. You can talk to somebody that they've worked with. Right. So like that's a great point. 'cause we always joke that like, um, no GC is gonna give you the name of a client that they had a bad experience. Right. With like, they're only gonna give you the best clients and they're, so the clients will be like, oh my God, they're the best.

But so like something we say is like, we'll talk to their suppliers, like reach out to their suppliers and find out do these people pay their bills on time? Mm-hmm. Um. [00:34:00] Talk to, because I mean, banks can't give you too much information, but like That's a great one. Yeah. Like talk to people that, that have worked for them.

Yeah. Like say, Hey, who are some of the subcontractors that you, that you use? Can I talk to them? Right. Because, you know, they're, they're, they're gonna be smart about what they tell you, but if they don't pay their bills on time, they're gonna tell you they don't pay their bills on time. And that's a huge red flag because that means money's not well, that then that actually segues into another place where the financing aspect of it is a place where you can, as a homeowner, gain some, some additional control.

Yes. Um, of that process we have talked about of that, of those inspections. Yes. Of how the kind of, how it flows. Um, because you can, you know, a builder can finance it them themselves. Yeah. Um, but then they're taking on the risk. Right. And you, but you also lose a little bit of control you know, um, of how things run.

But, or you can do a construction loan. Okay. Perm. Uh, it's a permanent loan and you, you still only close [00:35:00] once. Yeah. So you're not closing twice, but you kind of control the purse strings. Yes. Or the bank still does, obviously, but they are inspecting your home, but is a huge piece Yes. Through the process to make sure that it's, that things are being done the way that they should be, you know, and it's moving along as it should be.

And, and you're not paying for things that haven't been done. Things that haven't been done. Which this was a great point when we were talking on the phone, she mentioned this and I was like, light bulb moment. 'cause all I do is think about ways to protect homeowners mm-hmm. From this, you know, the elusive deposit and, you know, paying all this money.

And then, and then the, the home nerd leaves GC just never shows up. Or they're not giving them what they want or they don't actually finish. Right. And so when you were talking about construction loans, I was like, oh my God, a construction loan is like the best way. Then I can figure as of date, 'cause like nobody likes my escrow idea.

Mm-hmm. Because I was like, well what if we put the deposit in escrow? And every GC has been like, no, no, because they need [00:36:00] that money. They've got people to pay. I mean, they've got things to do. They've got deposits to put down as well. Yeah. So everybody hates the escrow idea. Everybody. They're like, it's terrible.

If a homeowner comes to me and says, I'll put your deposit in escrow, they're like, I'm gonna pass. Yeah. So we're not giving them, that's not the best advice. But when talking, knowing what I've known about construction loans, um, that is an amazing way for you as the homeowner to. Safeguard the money and stay in control of the money.

And that, we've said this on many episodes now, is staying in control of the money is how you stay in control. Control, right. Of the whole situation. Like you don't end up on the show as a homeowner horror story with the homeowner horror story. Also the money in that same vein, along with control and understanding, you know, how the house is moving forward and what your kind of builder is doing with those draws.

Make sure you are getting Leann waivers. Mm. If you go this route, make sure you're getting Leann waivers to make sure that that sub, that vent or that GC is paying his subcontractors. Okay. Because the last thing you want is [00:37:00] a drywall. Yeah. Trade. Putting a lean, having a lien on your home because they didn't get paid with money that was given to them.

Yeah. So to explain that, just so we're all clear and I've learned this, like Jess will get on me 'cause I'll say construction words and she'll be like, knows what that means. Sorry. No, it's okay. It's what you do for a living. I get it. I'm learning. Um, so. Anybody, whether it's a new construction home or it's a renovation mm-hmm.

Can put a lien on your house. Like if they say that we did work and we didn't get paid, they can put a lien on your house and it doesn't necessarily affect anything until you go to sell it. Right. Or you were, you wanted to refinance your mortgage or you wanted to do something, you have to make them hold before you can do it.

Yeah. Um, that, that lien can't be removed until those people have been paid. So one of the things that happens to a lot of, of home builders or home buyers is especially when they're mm-hmm. Like working with a custom build or they're buying something that like, [00:38:00] partially completed. Yeah. Um, and they're, you know, making changes as they're going through.

Somebody didn't get paid and they went and put a lien on the property. And so then when you go to close, you can't close on your house 'cause there's a lien on the property for, from, from the GC owning it. It's a whole thing. Or they can put, you know, wait until you've closed and put the lien on that. And so.

Lien waivers, which is somebody, it, it's a notarized document. Mm-hmm. And so it says, okay, IPDI drywall have paid all of my subs. Or the GC says I have paid PDI drywall and I sign it and the GC signs and everybody signs it. And that way I can't go put a lien on your property because I, there's a notarized document Right.

Saying that I have been paid. And so that's a great way to protect yourself and to protect your home from having a lien put on it. Um, which is just another, and don't pay because sub every sub a a lot of subs, um, if they're, you know, if they've been in business for a while for, and they've been burned Right.

Will [00:39:00] register as a lean, you know, as a lean agent. Oh, this and that will panic people. Oh my gosh. Takes, because they're like, oh my gosh. And it's just them saying, I'm in line to get my money. Yeah. Like, yeah. So the process right on, and this is what's so funny, is even in commercial, this freaks. Huge commercial con contractors, right?

It freaks them out. So, um, our paint company, every time we'd start a new project would register. You register with the municipality, right? And you say, Hey, I'm, I'm providing a service. I'm either providing a material or I'm providing a service. And this is, this is the process. In order for you to be able to put a lien, you have to put your name in the hat in the very beginning.

And so every single time my paint company would say, Hey, we're providing, they would freak out. And I'd get these panic because it almost looks like they filed a lie. Lie, right? Every time. And I'd be like, calm down. How many times do we have to go through this [00:40:00] Rob? So the lean, looking into how liens work.

Is a really great way for you to educate yourself. Mm-hmm. On okay. You know, lean waivers, making sure that, that you have them. A lot of your banks will require that. Right. So there's, it's not like you have to figure this out on your own. Right. Uh, if you're working with a lending agent, they're more than likely required.

They're going to lean waivers. Yeah. Um, which may seem like a total pain in the butt to you, and you may not have, like, this is why you're watching the show. Right. Because now you know that it's a really good thing to have. And it may be a bit pain in the butt, but it covers you as the homeowner and the home purchaser.

Um, so that you can, you know, sell your house one day without having to then Yeah. Pay some drywaller when they're converting the loan, you know, they will make sure that all the liens have been signed properly. Yeah. And that everybody's been paid. And it's just another layer of protection. Yeah. For kind of, for everybody.

I mean, because they do it [00:41:00] with, with builders. Yeah. When we're building a house, you know, we still have to file. Yeah, the liens. The liens, yeah. And, and they register and our trades register and we get the notification and we're like, oh yeah. And you know, for that one split second, you're like, what? But yeah, it's just registry.

What does this mean? Calm down. It's okay. Um, but it's just another layer of protection. And, and if trades and subcontractors have been burned by GCs Yeah. That's, you know, it's a way for them to protect their money as well. I know a lot of HVEC companies because that, that material is so expensive mm-hmm.

That they will be the kind of the first people to jump on the filing of like, Hey, hey, I'll be working on this project. It's not a lien, but I'm letting you know of my right to put a lien. And that freaks people out. I think, I think one of the best ways for, I think, a homeowner to remember, one of the best things for them to remember and for everybody to remember is like, from a builder's perspective, I try to remember that no matter what your budget is, this is usually the most amount of money that you're gonna spend on you're ever gonna spend.

Right. Even if you've done it 20 times, like usually you're going up [00:42:00] not down. Right? Yeah. And it's now a new budget for you or a new high. Um, but also remember if you're working and that builder is financing that home for you, you know, a lot of, a lot of, some homeowners, not all, but come at it from, this is my house.

I paid for this. Well, in a lot, in a lot of ways if the builder's financing it, you didn't pay, you haven't fort paid for it yet. You've paid a portion of it, you've paid deposits on it, but you still have to close. Right. And you still have to pay the rest of that. Yeah. Or get a mortgage to pay the remainder of that.

And the builder is putting all of the risk out on the front end if they're financing it. Yeah. And so are the trades, the trades are buying that HVAC equipment that they're buying, that plumbing equipment before they're getting paid for it. Yeah. Um, so. Maybe come, you know, have keeping that in mind. Yeah.

But even if, you know, even if you're doing the construction per loan that it's getting chunked out in Yeah. It's getting, you know, in increments. Increments as the house is getting passed. It's like progressive billing. So they're like, okay, well 'cause this is how I bill [00:43:00] so I, you know, I get to bill how much percentage I'm done certain you're, so like when I start a new project and I turn in my first bill, I can only bill for that percentage that I've been completed for, for, for that month.

And that's how it goes every month until I'm at a hundred percent Right. Um, which makes a lot of sense and I, I don't know why more. It's not like that always. Right. But I think it's not like that always. 'cause there's a lot of, of questionable GCs out there mm-hmm. That are robbing Peter to pay Paul. Yes.

Cashflow is huge issue for a lot of GCs. Yeah. And they will use your money to pay someone else. Right. And then when they need to pay for your thing. They don't have any money. And so it just, it creates this really big problem. Right. So that's where that like waiting to pay until it's been completed, it avoids that issue.

Yes. Because it's been completed and you're paying for it. 'cause this is like, I think on the last one we did, um, maybe not the last [00:44:00] one. Mm-hmm. There's so many homeowner horror stories, but in one of them, this guy just kept paying for things and it was like it wasn't done correctly and he was bringing in other people to fix them.

And I'm like, bro, what are you doing with your money? My guy? Like, close the purse, like the wallet needs to be zipped shut. But I think a lot of people don't understand, okay, at what point do I just say no? Right. Or at what point is it like 'cause they're afraid the GCs gonna walk off the job. Right. Or they're afraid that like, oh, then it's never gonna get finished.

Mm-hmm. And it's like you have to have. A point where it's like, okay, this is out of control and we're not, we're not paying you any more money Right. To, to do this thing. But it's a double-edged sword. It it's, I mean, for the most, if the builder is financing it, I guarantee you they want to finish Yes. The job.

Yeah. They, I mean, to your satisfac, I mean, I would say most builders, 99% of builders, like they wanna complete it. They wanna finish it to [00:45:00] your satisfaction. Yeah. Um, where, you know, problems sometimes come into play is where that satisfaction can't be reached no matter what. Yeah. Because either there's things that have to be compromised on that, that either just can't happen.

'cause you, you want this. Yeah. For this. Right. But there's some sort of, you know, thing about either the land or the home or whatever that it can't or physics, loss of physics. Yeah. Physics, they can't actually make it happen. And there's a compromise needed. Um, and homeowners aren't always willing to make those compromises.

So when you are dealing with, uh, like what is it like I, I'm a homeowner that's not willing to make a compromise. Like what, can you give us like a story non-specific? 'cause I don't, I know you don't wanna call anybody out, but like, an example that may or may not be similar. Um, water. Water grating water, um, land, you know, lots have been the way your backyard is graded.

[00:46:00] Mm. People want a perfectly flat backyard. Oh, right. Or they, you know, they want this lush rolling. Well, a lot of times you have to put in swales or you have to, there needs be some slopes there. There has to be slow. Yeah. The biggest thing that that builder is trying to do, if they're good and they're reputable, is get that water away from your house as fast as possible.

Yeah. And if you are downhill, yeah. Oh God. You have to accept the water coming downhill. That's the way gravity works. And put in, put in expensive drainage. So that your house doesn't get constantly inundated water. So swales are not always the prettiest. Yeah. But swes are there to get the water. And a swale is, oh, it's, uh, kind of just a low, where they grade like a divot.

They'll grade it up and then down. Mm-hmm. Yep. Okay. Um, and so, you know, we're out in Chatham County, so we're dealing with a lot of topography. Yeah. All the time. Yeah. Yeah. Every lot is different. You're like a little mini developer every time we build. So you have to pay attention to that. And there's certain times where it's like, oh, well this is gonna create a sw in my backyard.

I don't want that because I, I don't know. I wanna put a volleyball court in that, [00:47:00] whatever. Or a tennis tennis court or a pickleball court. The water away from your foundation is the most important and it's either going to cost more money for french drains and Yeah. And things of that nature. Or, or culvert pipes and things.

Um, or not ver pipes. So if you don't wanna swell, then, then, then you have to come up with something else You have to spend more money on, like get the, the French drain. So, so the swell is like the cheapest way to get, does essentially like building a barrier around your property. It's not the most attractive and it depends, you know, it depends.

And you know, some people are like, I don't want that and my kid is gonna step into it, or, you know, and, and water stays there sometimes. Yeah. So people get upset. Like the mosquitoes, mosquitoes are gonna come, but it is typically the quickest way Yeah. To get the water away. And if you don't want that, then you have to pay, pay more money for a French train for an alternative.

Yeah. Okay. And so that, it's things like that where some other are some conversations with your builder, like once you have found a home site Yeah. About what that's going to look like and how, you know, 'cause if you're [00:48:00] just looking at a piece of land with a lot of trees on it, right. There's a lot to visualize for people who don't do this every day.

I'll tell you what, I, I wouldn't be able to do that. Yeah. Like I'm, I'm a licensed general contractor and I'm like, that looks great to me. Like so you really do have to have a good GC that can, that knows how to, to cite that house. Yeah. And can walk you through it. Like my husband has put, has taken, you know, stakes and, and tape and Yeah.

Put the house box out and said, you know, and then said, I, I'm gonna bring the ground up to here and then he is got another stake to show. Yeah, that's, he really tries to walk you through just because from his perspective he's like, this is gonna help me on that, the back end, because yeah, you're gonna hopefully understand what I'm doing, what the land is gonna look like.

'cause the build process is like a meatloaf. Like you don't wanna really see it while it's happening a lot of times. 'cause it's messy and stuff. Yeah. You know, um, but, but giving, you know, trying to set those expectations and help people understand to the best, you know, that's a really good, so if you're dealing with a builder and it's, and, and you're building a house, you know, from scratch on, you're buying a lot and doing all that.[00:49:00]

Um, looking for a builder that like, is trying to visually show you what your lot is gonna look like. Like that is a green flag. Like, we want that. Yes, we want that. Like, so somebody who, how tall your foundation's gonna be. Right. That's gonna cost more money. Oh god. You know. Yeah. There's every road block is ch Kach.

Kach, Kach, kach. We were just talking about the block on because the, our last homeowner horror story, they had took out a structural wall, so they had to put a footing in the cross base, and instead of the, um, GC who's not licensed, instead of him putting like actual block. On the footing. He just took some, um, some bricks that he found in the crawlspace and he is like, that'll be good.

Oh my. Yeah. It was not good. If you can imagine that did not go well. Yeah. Um, but so we were like, how much could just three or four of these, you know, masonry blocks cost, and I was like, I don't know, but I imagine it adds up. Yeah. Like, especially when you're building a foundation. Yeah. Yes. Whole [00:50:00] different ball game.

Um, okay, so things like with the land, are there any other like, okay, this, this one thing happens all the time with the homeowners. It's like the standout thing. I know. That's a tough one. No, that's a tough one. I mean, definitely the height, you know, height of the foundation. Okay. Whether or not, 'cause obviously we're dealing with a lot of topography and depending on where you are, the block might need to be.

Um, fill block. Okay. Like instead of, you know, most concrete blocks are hollow in the center. Yeah. Those cost a heck of a lot more. Oh yeah. Those are spicy breaks. So understanding from on the front end, like, okay, you're going to need full block. Yeah. On this wall, it's gonna cost a lot more. Or we can do grading work on the front end mm-hmm.

And maybe eliminate that. Yeah. Or bring dirt in. Take dirt out. All of that costs money. Right. Every time you're bringing big dump trucks and big equipment Oh yeah. You're, it's, you're adding it up. So [00:51:00] that kind of stuff on the front end. But I think a lot of, a lot of it revolves around what most people know and what is what they see.

Right, right. Like the selections. Yeah. The, the finishings. Yeah. The, the tile They want, the cabinets they want. And really, like I said a while ago, was understanding that scope of work and what. Does my allowance in actually include? Yeah, so cabinetry, I have a $30,000 allowance. Okay. Well that is level one or that is this particular species that includes these colors that, you know, includes rollout trays, does include rollout trays, like full duct shows when you guys have to have shelves.

You know, when you guys do like a, like not spec home, like a mm-hmm. A custom build. Do you provide that information like the, in this, in this allowance it allows, you know, this type of wood in your cabinets. So pullouts, obviously I work for cabinet company too, so we, you know, we're providing a brochure about the cabinetry that is okay in that allowance.

Okay. Um, and kind. And so it's showing [00:52:00] them, okay, here's all those species of woods that are available to me. Here's all the colors of that are available to me. Okay. 'cause some people don't necessarily care about the construction. Some people. Right. Heavily care about the construction. Yeah. But they really wanna know like, what are the colors?

Right? Like what are my cabinets gonna look like? What can I do? What's my gonna look like? 'cause kitchen's obviously super important. Yeah. Um, your countertops. Yeah. Does it include quartz? And what is like, there's gotta be levels. Right? And every builder has a level. Yeah. It doesn't, every builder has to start somewhere.

Even if you're custom. Yeah. If you're not, you're talking about just big bucks and you probably don't have a budget anyway, so. Right. True. True. You're just going and looking. So if you can take some time on the front end with the builder, great. Do it. Go and just have them walk you through where they do their flooring and their cabinetry selections and, but you're gonna, more than likely you're gonna have to pay for that.

Oh, okay. It's their time. Yeah, yeah, yeah. Right. I mean, they're, um. But it'll help you a lot. Yeah. It'll help them a lot. Or you can sometimes do it on your own if you're really, really nice and you call up the showroom and you say, can we just come [00:53:00] in and kind of look around? So at least you are getting an idea of what the options are.

Right. So that you can, and then they to say, Hey, I say, Hey, I really like this level three cabinet. I really liked Walnut. Yeah. You know, I really want rollout trades and everything. You know, so they're going Okay, that, that helps me when I'm trying to give you an allowance. Yeah. Um, so every, every builder, even if they're custom, they have start somewhere because they have to be able to price something.

Knowing what you want to, to the most degree that you can know what you want. Mm-hmm. And being able to go to a builder and say, Hey, this is what I want. Right. Helps eliminate to the best of your ability. Those, oh, well there's, you know, we only had this much in the allowance for cabinets, and you want this.

Now you're mad. Now you're mad. So, but, but let's, let's play with this. So let's say I come to you and I know exactly what I want. Mm-hmm. And the builder still prices it low. What does the homeowner do in that situation where it's [00:54:00] like, so is it like the responsibility of the homeowner to do the research on the allowances?

Like, is that the advice to give? Like make sure you're checking your allowances, that they're reasonable. If you know what you want and they're giving you an allowance, then there better be something along with that, that you're gonna sign that says, this is what this allowance includes. And it's everything that you stated you wanted.

Okay. Aha. There it is. So there's something in writing that says, this allowance is to include this specific item, 5,000 foot cabinets. And it's, you've already picked, I want, you know, the Shiloh door style with Okay. Shiloh's manufacturer, but you know Yeah. Whatever it is. Yeah. In species with insect this.

And so when you have that in writing. Then when the builder comes back to you and says, oh, well we need more money, what happens then? You shouldn't give them money. Money. Unless there's, unless there's a very specific reason because you, you added, you added something in the de because you're gonna do a design process back and forth with the cabinet builder typically.

[00:55:00] Um, so you could, you know, you could go in and be like, I want the fanciest times you've ever seen. What will happen, especially with custom builders, like, um, they'll go ahead and get, if there's a set of plans, um, once you get to the plan stage. Yeah. Uh, they will give that set of plans to the cabinet vendor and they will give them a preliminary layout.

Okay. So where you're, you know, it's, you maybe get a stack of drawers and mostly base cabinets. Yep. But they'll say, okay, this gives them an idea for the allowance and it can show drawings to the homeowner to say, Hey, this is what this allowance includes. Okay. But then you can go, you know, you can go crazy.

Oh, you can go nuts. You can go nuts. Um, I did that. I do counter. You have hit what that baseline is. Does, I mean. Custom building is not for the faint of heart. It really isn't. Yeah. Because it takes a lot of time on the front end to determine what you want. Right. And how, how, how it can fit into your budget.

Right. Um, and things are gonna go wrong. Yeah. They're, but you know, I came also, we also came from the production world where [00:56:00] that's the trade off. It's like you go into, um, builders and especially now that they've packaged everything. Yeah. That's the big thing. You know, you go and you can, in an hour, you can pick through the Yeah.

You can pick through their selections and you go, okay, I know exactly how much my house is gonna cost. Yeah. I know exactly how much I have to put down. Yep. And then I don't pay anything else unless I change something. Yeah. Which most of 'em won't let you anyway, but, um, until read the contract until, until the very end.

Um, but that's the trade off. Like you're, but you don't get to choose. Yeah. You don't get to pick anything. Right. It know, it's, it's like, here's this package. You can choose this. That's your back splash, whether you like it or not, or this, yeah. Yeah. Somebody reached out to me about like, have you ever heard of this?

Like they, they, they had it the. Gold, silver, bronze package. I'm like, first of all, nobody wants to win the bronze. Right? You go for the gold. It doesn't mean to label them that because you try to label somebody label that doesn't necessarily, it's a bad connotation to the, this standard package. Yeah.

They're like, I'll take the participation award. Right. Uh, the can I, I can [00:57:00] afford that package. Um, and they had like, you could not change anything. No. So like, it was like this in the gold package, this is what you get. And I'm like, but what if you liked the, the what, what's in the gold? And you want, but you wanted, they're like, Nope.

Can't change anything. And I was like, oh. Because almost everything you've touched in construction changes something else, right? Yeah. You're not wrong. You've, they've gone through a lot of time and effort to not only pick those packages, but then price those packages for every single house plan. Yeah.

With every single foreseeable option that you could purchase that would change the square footage or change the linear foot. Um. And so they know what those prices are. Right. And that's, that's what you get. That's the, that's the pro the product production. Right? Yeah. But that's, you're like, I know exactly what it's gonna cost.

Right. Um, it's gonna look like my neighbor. It's Yeah. Right. It's gonna be like little houses made a box, but you know exactly what it's gonna cost Yeah. When you walk out of signing the contract. Yeah. And that, that, so that is kind of the, the [00:58:00] difference, like when you're buying a new home from a production builder mm-hmm.

You do know more what you're getting mm-hmm. From the, from the get go. Right. Like you walk in, they know how much all their houses cost and they could be like, Hey, uh, depending on the package, it'll cost this much. It'll cause this much, it'll cost this much. That works in new construction production like, you know, toll Brothers.

Um, usually the biggest variables there are going to be obviously the plan that you pick. Yeah. Um, and the elevation, but the lot premium. Oh yeah, the premium lots so long. Pro tip, you can usually negotiate the library. Okay. Lot premium pro tip, you can negotiate because they're kind that kind, you know? I mean there's obviously some lots out there that, that, you know, they go, would garner a premium price.

Right? Nobody, but you know, there's nothing behind you. You, it's to, you're on the corner. But some people don't like a corner lot. Right. Yeah. They don't want to be exposed on, right. On more sides. Um, but sometimes they're just arbitrarily, they're just like, we're just gonna charge [00:59:00] more for this lot. 'cause we like the way the grass looks little behind the scenes there you could probably negotiate the lot for you.

So note to sell you can negotiate the lot price with the big builders. Yeah. When you're, I mean listen, when you're buying a lot, you can negotiate that too. Yes. But like to what point you can negotiate that is different than when you're building from, 'cause these big builders, they buy massive amounts of land and they.

Develop them. Mm-hmm. Into a huge apartment or a not apartment. Oh, that's in my mind, community. A huge community of houses. So they've, they bought that lot for probably a couple million dollars and they're gonna make a bajillion gazillion dollars. Well, not always because the builder's not always a developer, so.

Oh, that's true. If they're buying it from a developer, there's all kinds of stuff that, you know, the lot costs go up with every phase as long as the mark. Yeah, as long as the housing market is, is going well. And then some developers have what's called a true up, and I don't even wanna get into that 'cause I don't wanna confuse people, but there is an additional [01:00:00] percentage, so the lot costs.

Fluctuates. Oh, how convenient for developers. I, based on how much you sell it for. Oh. So if you, if somebody goes in and adds a lot of options, oh my gosh. Yeah. Then you're paying more for the lot. Oh, shady. That's shady. Mm. I The developers are like, well, we're not coming on your podcast now. Well, you're not.

But they also, you know, on the flip side, let's be fair and balanced. We're gonna be fair and balanced. Could they spend an exorbitant amount of money upfront hoping that this community is going to be, you know, a, a place that people wanna live and you know where they're gonna keep, continue to be able to sell those lots at a premium price?

To give you guys like the, the, the best takeaways that, the one thing that we've said it before, and we'll say it again, is that controlling the money is the best way to control Absolutely. The, the situation. And that goes for a renovation, a new construction, build a, a custom home build, doing whatever you can to keep your [01:01:00] hands on the money for as long as you can until the work is completed, is the, is the way to protect yourself, um, ways, but don't be so difficult with it that the builder does end up walking on, on you.

Yeah, like, I mean, like there has to be some give, give and take compromise, give and take. But you know the one, the biggest thing is don't pay for something that you are genuinely not happy with, right? So if the tile was installed improperly, do not pay for the in properly installed tile. And no reputable GC should be asking you to pay for improperly in installed tile.

So also red flag, um. Know that like it is a process and really going into anything, whether it's buying a new home or a renovation and, and having a really clear picture or as clear as you can, as of what you want. And like, go big. Like start with I, this is everything that I've ever wanted in my dream home.

And then they tell you how much that costs and you're like, just kidding. Can't afford that. [01:02:00] What's the next option? So, and a good builder will also help you whittle those things down. Yeah. Right. And a good builder will and understanding what is worth changing later, what's gonna cost a lot more later or what, what you can do later with, with reasonable ease.

Yes. They will walk you through that and they will, because again, they're most are trying to make you happy at Yes. And product. Yes. So, so, but really just, it seems like knowing what you want. To to in order to get a good number, knowing what you want. And when it comes to allowances, putting it in writing, yes, you have a signed contract of what is in that allowance, what that is worth.

And therefore when they come back and they say, oh, well that costs more now. No it doesn't. 'cause I have a signed contract. Right? So huge, this is the hugest takeaway it when it comes to allowances is if you know what you want or you have a really close idea, you have that in the allowance. You have it in writing, what that costs, you have it in writing, what exactly what [01:03:00] items are in that allowance.

And then there is no change order because that, unfortunately, whatever happened from that point on is the builder's problem, not the homeowner's problem. So that there's that. So we had a GC on guys we're fair and balanced and I think you did a fantastic job. Thank you. Appreciate it. Of, you know, of not just letting me go on tangents.

You're like, well wait, listen. I did go on a few tangents. Sorry about that. Um, but thank you so much for coming on the show. You're welcome. Thank you for having me. And we hope to have more, you know, more of you, more of, more of GCs come on the show. Um, anytime. Please. If you have any friends that have homeowner horror stories, which I'm sure you do, or if you have your own, but you wanna be anonymous, Jess will never allow anyone's name to be used, even if they don't check that they wanna be anonymous.

Jess is like so paranoid about saying people's names. Yeah, I, I would agree with Jess. She'll always make people anonymous. So like anybody out there with a homeowner horror story, if you guys have anybody that have homeowner horror [01:04:00] stories, obviously not that worked with you because you're great. No.

Perfect but perfect perfection. Please go to chicks and construction.com. You can scroll down and there's a little, uh, form that you can fill out and you can share your homeowner horror story with us. And that is so helpful because we are able to kind of debunk, gonna go through and like we do like a.

You know, autopsy and we're like, love that. Oh, here's what happened and here's where things went wrong. Postmortem, yeah, the post-mortem. That's the word I was looking for, but it wasn't coming to mind. Um, so please check us out on, on our web website checks and construction.com and then on all the socials, um, I'm just gonna have Joe put, uh, all the socials on the screen because that's what Jess does and I don't, I know it's Chicks in Construction Podcast, Instagram, LinkedIn, I'm not sure Joe's gonna put it.

Please follow us. Please also subscribe to the podcast. And actually it really is important and it helps. We wanna do a store, a storefront, an Amazon storefront, but you have to have a thousand subscribers. So I [01:05:00] need a thousand subscribers so I can also show you things that you want in your house to purchase.

Okay? Come on guys, help, help me. That's a idea. Help you. Great idea. So thank you guys so much for watching. We appreciate and we will see you next time. Bye.