December 12, 2011
When we last spoke, I had just filled you in on the process for completing my budget for Mesa Verde. I envisioned the house as a vaguely Spanish style, family friendly house. The house has a huge living room and four bedrooms, a limestone fireplace, tile floors, dark cabinetry and a dark front door with a glass and black wrought iron half-lite. Because of these features I decided the house had a vaguely Spanish vibe and I decided to go with it. I envisioned oil rubbed bronze or black fixtures and lights, dark wood floors, white walls, etc. I was planning on staging the house with comfortable contemporary furniture and lots of red or burgundy accents. The reason I work so hard to come up with a theme for a project is two-fold: 1. it helps to ensure cohesiveness throughout the house which makes a house feel more comfortable and inviting, and 2. the plan provides a framework and a structure for purchasing everything for the house. When re-doing a whole house at once it is amazing how many decisions I have to make. If I don’t have a focus it would be very easy to purchase a door that doesn’t match the others in the house or a light fixture in the wrong finish. If I were competing against other resale properties this wouldn’t be a problem, after all while living in a house updating tends to happen one room at a time, it’s a constant work in progress.
However, I’m not competing against resales, I’m competing against new construction. I want my properties to command the premium that comes from everything being done and blending seamlessly together, at least for this one brief moment in time. You see when I’m selling a house, I’m not selling a building, I’m selling a home, and a dream, and a lifestyle. I want people to walk into one of my properties and see their best lives (to steal a line from Oprah) because that is what someone wants to buy.
After I built my spreadsheet of all of the interior materials I started pricing everything. I gather prices by going to physical stores and internet searches. Once I located all my materials and entered them into the spreadsheet I discovered I was over budget. So I made some changes, I changed the finishes from bronze to nickel, the tile from porcelain to ceramic, engineered wood flooring to hand-scraped laminate and a bunch of other decisions that didn’t affect the quality of the house but did affect the cost. Making these changes reduced my budget for the interior about 20%. So I had my new budget.
But I’m still not satisfied. Why not? Because the budget I have arrived at is based on retail prices, and I think I can do better. Contrary to popular belief, contractors aren’t able to purchase things at 50 – 60 percent off retail prices. We are able to get better prices by buying in bulk and frequenting the same vendors over and over, but our savings are really only 5 – 10% on most items. I don’t count on that 5 or 10% in my budget though because it helps offset the cost of things that are impossible to quantify, like screws, that really add up. So how can I reduce the budget further?
Many contractors reduce their prices by purchasing off brand or lesser quality materials known as “builder’s grade” that look the same as the higher end materials but may have cheaper components inside or are mass-produced in China for pennies on the dollar. I don’t do that, I refuse to put anything in one of my project houses that I wouldn’t put in my own house, actually I usually put better materials in my projects than what I put in my own house. What do I do instead? I go bargain hunting. Tomorrow I’ll fill you in on some of my secret shopping techniques.