Construction Bargain Strategies Part 2

"Construction Bargain Strategies for the Commando Shopper"

Author's note:

This list is a continuation of "100 Construction Bargain Strategies" available in the Third Edition of The Owner-Builder Book, copyright 2003, now available. The first 100 strategies are printed in the book and in our Special Report number 25 (See Bookstore).

151. Buddy Up

Sometimes a price for construction supplies breaks sharply above a certain quantity.  Maybe you can save $1,000 on needed drywall sheets, for example, if you order a third more than you're planning.  You don't want to pay for the extra materials and take the risk of finding a buyer for them later.  In this case, you could buddy up.  Call down your list of other owner-builders you've networked with and see if anybody needs a savings on drywall.  With a willing partner, you may find more deals on carpet, cabinets, fixtures, paint, roofing materials, or just about anything that goes in a house.  Maybe you can share an extra discount from some of the subs you line up. 

If you don't have a buddy in mind, you could advertise for one.  Not just newspapers, but maybe the bulletin boards at supply stores, home center stores, or distributors.  Maybe the vendor has knowledge of a potential buddy building now.  As always, network broadly to give yourself the widest window of opportunity possible.

152. Price Out Alternative Approaches

Once you get good at getting prices for labor and material, the first step to savings is to get multiple bids in every category.  Nothing makes prices fall like competition for your business. 

Once you've reached that step you can push the edge of the envelope by pricing out alternative to your planned approach.  For instance, after you have prices for a concrete foundation, you may look into an insulated concrete forming system (ICF or an all wood foundation, or building on a post tension concrete slab.  Or maybe you price out full custom cabinets, then semi-custom, then manufactured.  Or maybe panelized or SIP framing as well as standard.

By thinking out of the box you find possibilities that you hadn't considered, which may lead you to surprise savings or improved quality, reduced maintenance or operating costs and improved resale value for your property.

 
153. Written Comparison

Maybe you weren't too good of a student in school, but when you build its time to shine.  You are entering the province of full-time professionals who have experience and systems to make the job easier.

Or if you were a good student, bring out your skills of learning and organization for this task.  Write notes.  Lay them out consistently for comparison when you are getting pricing on house components.  Don't be afraid to retype the whole hodgepodge into a computer to make it clear what you've got.

This is particularly handy when you are considering bids.  Nothing brings up questions for clarification quicker than to recopy the information from a bid into computer.  You note that various parts have been left out, mistakes were made, portions are glaringly overpriced.  Subcontractors are very willing to clarify and explain after they have bid.  Your call shows you are for real and worth their time.

The high road is to enter the information you gather into computer spreadsheet for valuable analysis.  Since the spreadsheet offers calculation and sorting capability, you have new power to understand and discover good value in the marketplace.  You can total your figures and get immediate recalculation when you learn of a change or negotiate a concession. 

Another plus is that your written information makes you a better bet for lenders.  They live in a world of reports and spreadsheets, so you'll fit right in:

" I put together different bids, three for each section, except where we have a friend.  We added on what he's going to do, and still put money in for that, and for our own labor.  Last time we didn't get everything in writing.  Like sidewalks for $900 and the bid came in at $1,500 on the last house.  Make sure you get prices from more than one person also.  HVAC and plumbing was $15,000 on one and $8,500 on a second one.  Both reputable companies for the exact same thing. I always added extra to everything, and added 5% at the end.  It is a lot more paperwork to get funds from the bank as an owner-builder.  And they give you a higher interest rate as an owner-builder." (Melissa and Brad D., Hanover, PA)

• Be neat and organized, take notes and use a spreadsheet to compare sources. The little items you lose track of can waste your time and money.

154. "Cherry Picking"

"Cherry picking" is selecting the best of each lot. When I laid out on a spreadsheet the various kitchen appliances we had sourced from vendors in our region, I saw that each source had one item priced lower than the other vendors. I made ready to buy the range from one source, the microwave from another, the disposal, refrigerator, and wall oven from others. I told my preferred vendor what I planned to do, and he surprised me by matching all the low prices.

One O-B told me he was breaking down and cherry picking his cabinet installation by buying skeleton cabinets from Home Depot and buying door fronts and hardware from friend who has a custom shop.  The friend couldn't match the price of the skeleton cabinets at the home center store.  By cherry picking custom door fronts and hardware he was able to pick up on isolated styles - remnants and returns available for almost nothing and use them in different rooms.

155. Show Your Spreadsheet to Salesmen

A further benefit of putting your information on spreadsheet is the magical power of written figures to exact better prices from vendors.  Most have a general policy of beating direct competition.  Once it's in writing it's actionable, and the subs and vendors will react to almost anything that's in writing. It's like a red flag to a bull. They will cut prices to beat competition if they see any documentation.

156. High Priority

To my mind, as a "civilian" owner-builder (this isn't you normal job), you have two mountains to climb. The first is figuring out how to build a house.  There's lots of help available on this, and it is essentially a management task, which may not be far from what you do now, even if you are a homemaker.

The second mountain is building your wealth. Owner-building is the quickest route to financial independence I have ever known. 

It is very possible to climb the first mountain and ignore the second.  The only one who will know is you.  You can build a house without building wealth and no one will ever know. 

Therefore it's up to you to build value by assuring quality and by lowering costs on your project.  To do this we counsel you to make saving money a high priority.  It is very easy to be dissuaded from this purpose and to go the easy route of procuring materials and services for convenience rather than savings.  After all, people will tell you 'no' all the time and try to extract bigger margins from you as a customer.

Don't be surprised if the path to saving money is the one less traveled by.  Contractors generally go for convenience.  After all they build with other peoples money and "time is money" to them.  But the big builders get incredible prices on construction components, and so can you if you work at it and make it your business to do so.

Remember that dollars saved in constructing your home are worth ten times more to your wealth than salary dollars.

 
157. Select Items that Maintain Value

Shop for quality. Think of cost over the life-cycle of your purchase. It may cost more now, but will pay for itself in reduced operating cost or upon resale.

By life-cycle cost I mean the overall cost of an item over the life of your home.  For instance, we bought name brand plumbing fixtures when we built, though at a healthy discount.  These items all carry lifetime warranties, which we have exercised repeatedly while living in the Riverbottoms house.  The jets on the master tub had problems, as did the pump motor.  All replaced free of charge.  We've replaced the kitchen faucet twice and it needs it again.   Free.  Various valves, handles, and trim pieces have needed replacement.  What would have happened if we bought bargain items for this purpose?

We would have paid half as much, but replaced twice as often, and at our expense.  This is over a less than ten year period.  When you contemplate components over a hundred year life, you must replace many of them many times.  Carpet, for example has rarely more than a ten year life, while tile is generally forever.

Another life cycle cost is operating cost.  Our 90% efficiency furnace costs a bit more but requires less fuel to do the job, thus paying for itself in ten years or so.  Some items like efficient refrigerator/freezers and compact fluorescent light fixtures can pay for their added cost much sooner. 

In some cases we found that built-in items like drawers and custom shelving in closets saved money and space elegantly versus expenditures on furniture.  Since a homeowner is reimbursed for a built-in on resale, it's cost is less than temporary furniture over the life-cycle.  

158. Question Bottom of the Line Products and Bids

• Some commercial construction companies reject the low subcontractor bid automatically. They tend to get more bids than residential owners do, and have more freedom of choice. If you insist on bidding in detail, you will have more assurance of getting what you expect from a very low bidder. But the only reason to buy a bottom of the line product is that you can't get a favorable price on an improved version. Keep trying.

159. Serendipity

You run into values by being at the right place at the right time. Be alert to unexpected opportunities. This is one of the reasons we suggest stretching out your planning to a full year before breaking ground as a first-time owner-builder.  You have more chance to run into good buys and good answers the longer you are out there trying.

160. Use the Internet

Time after time we hear of non-internet deals that beat cyberfinds.  Don't rely too much on the web until you know your way around.  This will change, eventually, as everybody gets on-line.  For one thing, the web hooks you to people non-simultaneously who have left their wisdom for you to find easily, as on the Forums at our own site.

For another, you need answers to many questions when you build, and search engines like Google can turn up relevant information in abundance in seconds.

Some sites, like ours, are actually dedicated to helping you save money.  As we find sites of this type we capture them for you on our Links page.  Give it a try to see if it expands your horizons.

 
161. Telephone Comparison

• Once you have studied the purchase you are planning, you can often make a few phone calls to alternate sources quickly to verify that you have found the best price and terms.  I did this with the refinance we recently accomplished for our home.  After getting my best deal I quickly ran it by the others I had been dealing with.  They said, "If you can get those rates and fees, go for it."

But very often the opposite occurs.  O-B Jay Sevison called his friend the plumber before locking in a plumbing deal for his project.  The plumber said he was too busy to bid, but would match Jay's lowest deal and throw in a free water softener. 

 
162. Long Distance Shopping

Don't limit yourself to local sources. Extend your search for components and materials to other markets where different conditions might prevail. Occasionally, even remote subcontractors can be found who will travel to your region, lodge there temporarily, and provide lower overall costs at equal or greater quality than available in your market.

Your internet search does this, and brings in prices for items from a wider base of competition.  Sometimes the internet quotes are impractical because of distances and the cost of shipping or travel.  But they will almost always serve as comparative bids for local vendors who will often match or beat them.

 
163. Out of Town Labor

One advantage to choosing a subcontractor from out of town is that the sub will finish the work faster because they are not distracted by other local obligations in your area. Dan M. of Green River, Wyoming said, "Roofing guy locally wanted $60 a square labor only. My brother said he knew guys who were at $25 a square, and they buy the nails, (coming 375 miles from Gillette) and we offered to pay the Holiday Inn. But we told the local guy, and he did it for $30. Don't let geography interfere."

164. Sales

Buy what you want on sale. Grocery shoppers do. The majority of department store purchases are also sale items. If you watch and anticipate, the service or product you are buying may come on sale at a given time or season. Ask, 'When is this coming on sale?'

This is another benefit to taking your time to plan.  Take a good year if possible.  The brickyard in our area that holds a cash and carry sale of discontinueds, returns and overstocks only does it once a year.

 
165. Close-outs and Floor Models

When products are discontinued or vendors are dropping the item, you may find a clearance price. Floor models that are for display are sold periodically at cost to make way for a newer display. We've heard of owner-builders getting cabinets and appliances this way.  When the local home center stores go out of business, we see tub and shower enclosures, tubs and toilets, front door packages and window displays going for pennies on the dollar. 

166. New Guys

Sometimes a supplier is introducing a new product line and will discount it heavily to get market share. Sometimes qualified subs are just entering a new specialty. They will offer low prices to gain entry to the market, and still guarantee their work. My framer was very qualified but had worked for a general for years. I got him just as he went into business for himself.

167. Shop Distributor Supply Houses

As you are the contractor for your house, and have taken the trouble to set yourself up as a business with a state resale number, (see page 36 of The Owner-Builder Book) you can open accounts at local supply houses just like other contractors. If you have credit references from other trade sources, they will extend you credit. They may accept your credit cards as references. If not, you can set up your account as cash only. You may or may not get their best prices.

If I didn't get good prices under my name at the supply houses, I used someone else's name. Several times I mentioned my plumber, HVAC contractor, or construction advisor's name and bought at their prices by paying cash for the purchase. The custodian where Elaine worked had accounts at several places and permitted us to buy under his name, paying cash.

Sometimes the prices at the supply houses where contractors shop are higher than sale items at home center stores. Their credit or delivery services can make up for this. On other items, the supply house had much better prices. Generally the quality we were able to get was higher at the wholesale supply houses.

168. Shop Distributors in Other Cities

Using your phone, national CD-ROM telephone directory, and fax or internet connection, you can get good prices from supply houses in other cities. A plumbing supply house may say they sell to licensed contractors only, but will quote you prices over the phone. ('Hello, this is Mark Smith with The Consensus Group. I need a price on some items.')  If you like the price, you can pay by credit card over the phone and have it shipped to you.

169. Buy Wiring Supplies at Home Depot

Buy wiring stuff at Home Depot, because the distributors admit they can't touch the price.

170. K-Mart for Ceiling Fans and Doorknobs

The Home Essentials brand they now carry isn't as good but is lower-priced than the Hunter fans they used to have.  For some reason, they always have much better door hardware prices there than the home center stores and door places we tried.

171. Shop Other Tradesmen - Piggyback

Suppose you have set up a labor-only deal with your plumber and need to buy parts and fixtures off a list he has supplied you and quoted at $4,500. You can go to another tradesman and say you need to get these items for under $3,000 and can you buy under his discount?  You would be willing to handle the paperwork, pick up the supplies, and pay cash. Some tradesmen will help out. If not, try retired ones. You could offer them an immediate commission of $100 or $200 and still come out ahead.

We used the piggyback technique to get a $5,000 savings on our lumber.  I invited a busy custom contractor to lunch, fed him prime rib (this is a reliable contractor food) and asked if he'd mind letting us buy under his account at the local lumberyard.  He set it all up for us and ran through the plans for pricing. He was a decent guy, and it didn't hurt him to do it as it pumped up his volume and thus his customer incentives with the lumberyard.

172. Negotiate

Without moving from source to source, you can often improve your price or features by negotiating with a chosen vendor: "Could you do it for this much?  That's all the budget will allow."

Owner-builder Jeff R. of Derry, NH, who is a professional purchasing agent, uses this technique to advantage:

"I got the best price on a well, $3,500, and the pump portion was $1,500. Then I said I need to drill two wells, and what would be the price for doing two?  I got $400 off. Then I didn't  need a pump on the second well, which saved me $1,500 more. Then I asked what the terms were for payment in 30 days.  'Net', they said.  10 days?  One of the companies gave me 5%. Then I said what about instant cash. And I got 10% off."

Also, when you are quoted a flat rate, break it down into units and get the sub to honor the price per unit if units change.

 
173. "Throw in something free and I'll use you."

Another negotiating technique used by Eric and Ember M. of St. George, Utah is to talk to the vendors or subs on the short list of those you are considering and ask them to throw in something free.  This usually doesn't have a high cost for the provider, but may be huge for you. I used it when we printed the third edition of The Owner-Builder Book, and got an $800 concession from the printer.

174. Help Your Tradesmen

Owner-builder Clinton B. of Anchorage, AK told me: "Negotiate, negotiate, negotiate - there is always room for negotiation with all contractors even if you're the one to sweep up after they leave every day. There is always something you can do to cut costs." O-B Earnie Callender said, "I will do the grunt work for the expensive tradesmen to reduce their cost."

You can offer to:

• Be a helper to your tradesman for a lower price.
• Run your own flex tube for HVAC, install switch boxes for the electrician - perform repetitive tasks for a high value tradesman in exchange for a reduction.

 
175. Boneyard

Many of the big suppliers have places where they stow their returns, damaged and discontinued items. You can find good prices on doors, windows, countertops, tile, brick, and other items this way. Make an offer on something, or counter any price that is offered to you.

176. Buy in Quantity When You Find Low Prices

If you know how much you need, get that much. But it doesn't hurt to buy extra if you are uncertain. Check what the return policy is. Sometimes if you need more time before returning items the manager will initial the receipt upon purchase to give you more time. This assures a cheerful refund later.

177. Save Your Paperwork 

With receipts you can get refunds on items you don't need or decide you don't want. You will have a very large stack of receipts after you build, so you need to organize them for convenience. The receipts provide model numbers and technical information that can come in handy later. Check your receipts. I found errors of $350 in my favor in an hour of checking one evening, and got refunds. After we finished the house I gathered up all the excess material (tile, balusters, unopened painting supplies, caulk and adhesives, etc.) on-site and matched it up with receipts in my file. I got nearly $300 in refunds from various vendors with no questions asked. 

On my first home a receipt came in very handy because the fence installer had charged sales tax on the labor and materials, and state law didn’t allow sales tax on services. They said the mistake was mine, that the right amount had been charged, but the receipt showed sales tax on the entire transaction, which resulted in a nice refund. 

If you have doubts about a material purchase, because you aren’t sure of quantity, or you are buying far in advance to take advantage of a discount, get the manager to initial the receipt to indicate there is no time limit on your return. This worked for us at a home center store when we brought back things a year later, and waited while they told us all the reasons we could not return the item. Then we showed the signed receipt and the discussion was over. The old manager was gone, but the signature indicated a store commitment. Very easy to get this at time of purchase when they will bend over backwards to get your business.

178. Shop for Credit Terms 

Some suppliers will take two percent off your bill if you pay within ten days. Other suppliers will give you generous credit of 90 days or more without interest. We got our carpet and wood flooring under a 'one year-same as cash' arrangement. Oftentimes that same supplier who has given you 90 day terms will accept your credit card at the end of the period as a “cash payment” which allows you more time and frequent flyer credits.

179. Ask for a Cash Discount 

Many tradesmen will agree to take ten percent off the bill if you pay immediately upon completion. You need to inspect the work carefully first. One owner-builder got three or four bank credit cards for this purpose that charged no fees for cash advances. He paid his tradesmen immediately, got discounts, and was reimbursed by the construction lender in time to avoid interest on the cards. 

One caution from The Complete Guide to Contracting Your Home (see our Bookstore): “Make sure when paying cash for work that you keep documentation of the work done for the IRS. Write a check in the sub’s name and have him cosign it. Then cash the check. This way you have an audit trail to prove that you paid the sub for the work done.”  

180. Be Flexible 

If you find superior items at prices lower than your intended items, you may be able to modify your plans to take advantage. For example, if you have hardwood flooring available at $6.50 per square foot installed, and find ceramic tile you like for an installed cost of $4, you may consider reducing the hardwood and increasing the ceramic tiled areas in your plan. 

Owner-builder Kevin Clausen bought transom windows priced at $200 for $60 each and saved some money versus his intended budget. Not a problem to adapt the size. He remarks: “It used to be that windows were made to fit the openings. Now openings are made to fit the windows.” 

House designer Dale Booth tells of a client who got a granite countertop, a 5’X8’ slab of green Vermont granite for $1 a square foot. They revised their design to include a kitchen island of that size to take advantage.

181. Builder Tricks 

If you tour tract homes you can spot some interesting builder economies that may work for you. We’ve seen items like: 

• A normal flat door, with added raised moldings on it that make it fancy, and have a solid core door for very cheap. 

• Fake wainscotings that people do where they do a little different paint under a molding at waist height and have a “poor man’s wainscoting.” 

• Fluted moldings downstairs, standard upstairs 

• Fully cased windows in public areas, sheetrock cased in bedrooms. 

• Wooden window blinds in public areas, vinyl elsewhere.  

• Tile in master bath, vinyl floor covering in kids baths. 

The Complete Guide to Contracting Your Home (see our Bookstore) talks about two by six inch framing on lower floors and two by four inch framing on upper floor, with corresponding reduction in upper floor insulation.  

182. Annual Sales 

To simplify things some vendors like our local brickyard have a once yearly sale to clear out inventory. The price reductions don’t have to be explained to regulars very often, and the preparatory work is limited. But you have to know when it is to take advantage. Just ask.  

Other retail oriented vendors do sales much more often. Some of the stores that carry building materials rely on continual sales to create excitement. The dates are established well in advance, and are often stored in the computer transaction system. They can tell you if a sale is imminent, and often can get you a sales price so you don’t have to come back. It pays to ask.  

183. Buy Your New Furniture from Factory Outlets 

For many guys like me, a new house project is a great excuse to buy more tools. For some people it’s also a perfect reason to buy new furniture. This can be a $50,000 proposition, but heck, you saved money on the house, so why not?  

When it gets to be a complex purchase, you may be justified in going to the North Carolina furniture markets to get fine quality at drastic reductions from list prices. Books like the Furniture Factory Outlet Guide by Kimberly Causey or our Special Report on buying furniture (see our Bookstore) tell you how. Of course, you don’t have to go to do the job. Our Special Report gives you web sites and phone /fax numbers that should enable to make discount purchases if you have an idea what you want.

184. Use a trade consultant 

If you are doing a trade have an expert advise you and maybe do the most difficult tasks for an hourly fee. We did this with painting and electrical. And we went to class to learn how to tile. There is undeniable know-how in any of the trades that will save you time and money. Like the building of your home itself, the process benefits from careful planning. We had no trouble running up $1,000 on our electrical guy before we knew it. Better to have your questions written down, try to research them first on the phone, the Internet, or at the library, and make very prepared use of the time you have to pay for. Also, avoid letting the consultant do actual work at the high rate charged for consulting.  

185. Don’t Pay Until Punch List Items are Done 

Evidently some tradesmen believe that the little details slow them down and cost them money, and if you don’t call them on it, they will take the check and go down the road, details undone. This was the way it was with our restoration contractor after a house fire in Ohio. He wanted and needed his last couple of installments, and said he’d be back. I gave him the first one, but he didn’t come back very quickly. I decided to wait on the last check and document the “punch list” items that needed to be done before the final check. 

His guys came back one day, and when they saw the detail on my list, they puttered a bit and disappeared. They never returned, though the last check was to be $4,000. They tried to collect it over the phone, and even with a nasty letter or two, but you wouldn’t fall for that either. I did a number of items myself over the next few months, let some others go, and kept the $4,000. 

Jeff Lewis did the same. He had $4,000 withheld on his drywall contractor but insisted that the last of the items be finished up. He tried to make it easy for the sub, offered to trade him his pickup truck for the work (the sub had admired the truck, which was for sale), and thought that the guy could do the work in a day. After many failures to show up, Jeff set a deadline. The sub missed the deadline, and Jeff was paid $4,800 to finish up the punch list himself. 

The risk is that the sub then claim that you didn’t pay for work actually done, so it is important to get lien releases for the checks that you give them that document that you are paid up to date on work performed. It can be very expensive to get a lien released if the sub has grounds to lien your property.  

186. Selecting Strategic Features that are Desirable in Your Market 

It can be very slow and therefore expensive to sell a house that doesn’t compete well against others in your price range. You may have to bite the bullet and put in a few features that are “conspicuous by their absence” in your plans, even if you don’t want the items. Sometimes it’s a certain kind of roof shingle, or vaulted ceilings, or swimming pool, or jetted tub, or first floor master bedroom, or X number of car garage.  

Part of doing your owner-builder homework is determining the features that make your house fully competitive in your market. The difference in equity may not prove out until it comes time to sell, but to lock in your savings, you must make a product that is saleable at need. Make sure your features match up to your market. 

We did this by developing a list of possible features and having Realtors evaluate them over the phone in a very simple five-minute conversation. We asked them to give a number from one to ten with 10 being an absolute “must-have”. We averaged out the numbers. After that the issue is planning your project to stay under budget with essential features intact.  

187. Developing a Good Cohesive Design with Drama and Curb Appeal 

At the same time it’s good to remember that your house is more than a collection of strategic features. The whole is “greater than the sum of it’s parts” in a well designed home. The experience of the home is pleasing and satisfying. The house has a “Je ne sais quoi” that makes it work. This is rarely achieved with a self-drawn plan. An owner-builder risks being a committee of one when undertaking to do all the design work from the ground up. Usually it’s a first-time effort and you don’t have the experience to hit a home run on the first try. 

I drove around town with a house designer from Arizona and he pointed out to me his first several designs from years before. His emotion was rueful. When you pick out a house design you can do so from many examples, and you can probably tell what really works from among many choices. When you pick a designer you can likewise view his or her portfolio and decide if this artist has reached the level of art you are looking for. 

A special note to the design-impaired: Hey, don’t feel bad if you lack in taste. You probably have many special strengths that will contribute to success as an owner-builder. But have the sense to run the design ideas you are considering past people with undeniable taste, and past the test of the market itself. You can check the latter by meeting with several Realtors and showing your preliminary floor plans and elevations. Realtors have the unique perspective of witnessing what makes buyers part with their money. They are also the nicest people in the world. As one told me, “You think you have it rough. I have to be nice to everybody.” 

188. Clean Job Saves 5% 

Yes, we actually believe that if you run a clean job, you can save 5% on the project. By being on-site frequently and keeping order, you change the attitude of tradesmen who work faster and with less waste, you reduce rework and theft, and the cost of buying supplies more than once.  

By being close to things you also get ideas that save money. Salesmen call on new construction projects with regularity, and they are in the posture of trying to sell you something, which makes them eager to fill your needs. We got our granite countertops for a song from one such salesman. 

One of the pioneering ideas of the landmark management book The Art of Excellence was the technique called MBWA, or management by walking around. When you are there, accessible and reinforcing your expectations of order and cleanliness, good things happen.  

189. Grow Your Own Wood 

Some readers have told us they picked up on free hardwood flooring material by having trees cleared from their land milled into planking for their floors. Cabinetry, furniture, and trim material can come from this source. In some parts of North America beautiful useful hardwoods and fruitwoods are available as a free resource.  

You can also have the trees cleared from your land cut and split into firewood for your use. 

One suggestion from The Complete Guide to Contracting Your Home (see our Bookstore) for those who cut down trees themselves:“Cut them four feet from the ground. The bulldozer needs a good piece of the tree to pull the roots out of the soil.” 

190. Regular Concrete Instead of Gypcrete for Poured Floors for Radiant 

Reader Jean-Michel B. of Chelan, Washington opted for in-floor radiant heat instead of a forced air system. He made quite a study of one of the costly aspects of the typical system, pumped Gypcrete as the matrix into which the radiant tubes are laid: 

“We did in-floor radiant heating as well. I’m an engineer. Gypcrete sets very quickly, and the heat transmissivity is very poor. I choose to beef up the joists, and use true portland cement, one and ahalf inches thick. We put double plates on the deck to make the door threshholds. We did it in the daylight basement as well. First I put pink rigid foam, laid in the pipes and poured the basement. We just anchored the pipes in the foam. Semirigid white translucent pipe, which ages very slowly. You need no couplings in the concrete. We filled them with water to make them heavy and stapled them to the foam. Upstairs we put visqueen over 3/4” OSB board, over silent joists that were 12 inches and stronger. We laid down the pipes, clamped them by screwing through the subfloor, and poured concrete using wheelbarrows.” 

“We used a very soupy pea graveled six bag mix plus fiber. We only got hairline cracks at two doorways. My HVAC was going to be $6,000. And I did whole-house radiant for $8,000 with a 24 KW boiler. We used 3-4 yards of concrete in an 1,800 s.f. area. We did half one day, and half the next. It took an hour and a half per pour. Only $70 per cubic yard for this special concrete. The chute from the truck came inside the house. We set pathways to go across with OSB sheets to keep from squashing the pipes while we moved the concrete. They even did the slope for me in the shower. We put the membrane on top of the cement and then I will tile.” 

MaryAnne and Allen Davis told us the same thing: “My sister and brother-in-law built their own house in Green River, Wyoming, where it goes to 20 below, and they did all the radiant themselves. They used regular concrete.” 

191. Buy Land for Back Taxes 

Owner-builder Jeanne D. of Navasota, TX did it: “I’ve got a lot on the 8^th hole of a golf course, which I got for $2,800, the amount of back taxes. I went down to the courthouse, got a plat map, and called the school district to see who might be in arrears. Then I called those people to see who wanted the land taken off their hands. I also did this for my parents and got them two lots for $500 each. They were so grateful, they paid for mine, too. So I got a free lot.” 

192. Don’t buy plans on the Internet 

Reader Candy M. of Washington, DC is one of several who have contacted us about the unexpected expense of buying plans on the Internet: “I spent $700 on plans that I bought off the Internet. Now I find out that they have to be signed and sealed by someone in my area, an architect, I think. Where do I start?” 

Naturally the architect must be paid for his involvement. And the plans have to be customized usually for local conditions, as designer Don Borne of Bend, Oregon explains: “I have been designing homes for many years. People have always brought me plans for years that don’t comply with local codes. The techniques, materials, and labor are different. Some places you have seismic risks, some places wind, some places snow load. You differ by ten miles and you change your snow load up here.” 

193. Save Real Estate Commission When You Owner-build 

We found an interesting correspondence between our book and The Complete Guide to Contracting Your Home (see our Bookstore) regarding owner-builder savings. The Complete Guide points out that you save 7% in real estate commissions when you owner-build vs. buying an existing dwelling. He says you save 42% owner-building overall. Take away 7% and you have 35%, which is the average savings we turned up in surveys of owner-builders. 

This is a somewhat invisible savings garnered by owner-builders, but can be a large savings for you. Real estate commission on a $300,000 averages over $20,000 in the U.S.  

194. 15-Year Mortgage Saves More than the Entire Value of Your Home in Interest 

I love this one. You can save more than the cost of your home in interest charges by signing up for a 15 year mortgage after you build. You know how the 30-year mortgage costs 3 times the value of your home over it’s life? (depending on prevailing rates of interest). Well, the 15-year mortgage costs half that much! 

The problem is that most people calculate their construction budget against what they can afford for a monthly mortgage payment, and the 15-year loan is a bit more per month, $100 to $200 on average. So for the “plan-ahead” O-B who can restrain his building appetite to allow for a shorter loan, this is an awesome benefit.  

People argue that you move every seven years on average, so who cares about a loan that they pay off anyway? Well, over a thirty year period, most people lived the entire time under 30-year mortgages and pay all that extra interest in spite of themselves.  

Another advantage is that the loans for 15 years are considered less risky than the longer ones, so the interest rate is about a point better.  

Elaine and I lucked out here. When rates went down recently, as they do every five years or so, we refinanced a 30-year loan to a 15-year one. The rate on our mortgage fell from 7 and 3/8 to 5 and a quarter percent. With that difference the monthly payments worked out to nearly the same as before. Our amortization of principle increased from $185 a month to $525 in the first month of the new loan. That feels like an extra $340 a month in the bank to me.  

Another way you can beat the system is to pay the equivalent of one monthly house payment extra per year in balance reduction to your mortgage holder. The power of compound interest cuts more than ten years off your mortgage this way. Or you can divide your mortgage payment in two and make a half payment every two weeks, 26 payments in a year. This has the same effect on a 30-year mortgage. 

195. Eliminate Halls and Walls 

Want more usable space for the same cost? Take this tip from The Complete Guide to Contracting Your Home (see our Bookstore): “Eliminate as many hallways and walls as possible. Hallways waste building materials and add to heated space while making a house seem smaller.” 

196. Get the Brickyard to Waive Minimum Returnable Quantities Rule 

Ever seen a big stack of bricks left over when a new house was completed? It’s common practice for brick vendors to refuse returns of product unless on a full skid of 1,000 bricks. It’s pretty hard to have a full skid left at the end because the masons break skids into bundles for staging convenience when they lay them. You might have 1,500 bricks left over, but no full skid. This is all well and good for the brickyard who participate in estimating quantities and sell more that way. The mason, too has some responsibility if you are left with needless product that you paid for.  

When choosing your brick, when the vendor wants to make you happy to patronize him, ensure returnability of small quantities. You may have to choose a style of brick that is a good seller. Or make sure the mason will absorb the extra brick if he has overestimated quantity. 
 

197. Have Excavator Make a Nice Pile of Topsoil for You 

When your land is first cleared for construction, there is a good chance that the top layer of soil is rich in organic matter and can be used later for lawn and garden beds. Save it in a safe area of the lot for later spreading and grading. Saves cost of good soil and hauling. We had 30 loads of topsoil hauled in over our rocky soil with a value of $3,000. You may be able to avoid the cost. 

198. Make the House Pay You 

We know we are pushing the edge of the envelope here, but when you think about saving money on your housing, you eventually get to the concept of your house paying you. Not just saving you money, mind you, but handing you some. One of the most well used strategies is to rent out a part of the house as an apartment. A variant is to rent out a room in the house. Both of these would benefit from some forethought. 

Owner-builder Dave Cabanilla looked into the possibility of not renting out a part of the house, but using it as a nanny apartment. That brought a storm of protest from his neighbors who wanted no part of a renter’s neighborhood and overreacted to Dave’s plan. The whole thing required a zoning change to accomplish in his neighborhood, and the zoning meeting was a circus of argument and protest.  

If you’re serious about doing something like this with your house, you may need to plan ahead and seek variances or change locales. But if you can, you join the ranks eventually of millions of older homes who pay mortgage or taxes and utilities from rent proceeds, thereby living free of charge. 

More ambitious efforts include specifically designing for a bed and breakfast or a reception center with a part of the home as owner dwelling, and part as a profit center. Owner-builder Dorethy Hancock got herself a much bigger house this way.  

If you are interested, you can do much with design to comply with zoning laws and with the logistics of your needs to create an environment that works for you and works for profit. 

199. Set up Your Loan for 12 Instead of Six Months 

By setting up your construction loan for a bit longer than you think you’ll need, you can avoid the need to file for an extension and pay additional fees to the lender. These fees set us back $250 on the Riverbottoms house. Ask while you are shopping for loans and the lenders are competing for your business.  

200. Finish a Month Earlier 

O-B John Norton, whose construction diary is found on our web site said that the last month of construction was stressful because interest charges cost him $6 every hour, whether productive or not. Delays on John’s house were caused in part because of the self-work he planned to do but had some difficulty completing, a very common problem.  
You can speed things along if you plan your self-work carefully in advance, provide a written schedule for the entire project, and keep after all the players. You may save a thousand dollars or many thousands by bringing in your project ahead of time.