When making an “apples-to-apples” comparison of the proposals from modular general contractors, look closely at four things.
Modular General Contractors: Scope of Work
Make sure the modular general contractors’ proposals list all tasks required to complete your home. If one proposal has a substantially lower price, it probably does not include all the tasks. If you sign a contract that doesn’t include every task, the modular GC will come back to you for more money after he begins construction of your home.
Modular General Contractors: Building Specifications
Look closely at how the modular general contractors’ estimates propose to complete each task. A modular GC can offer a much lower price by selecting less expensive building specifications or by not listing any specifications at all for some tasks. If you sign a contract that doesn’t list the construction specifications for every task, the modular general contractor has the right to select whatever materials he wants when it comes time to build your home.
Modular General Contractors: Exclusions
Ask all of the modular general contractors to document in writing which tasks are not included in their proposal. The most complete estimates include these “exclusions” so you aren’t left guessing what you could be responsible for. (If you were an expert in new home construction, you might not need this list because you would know everything you need.) For example, it is fine if building permit fees and landscaping are not included, but each proposal should tell you this.
Modular General Contractors: Allowances
Make sure all modular general contractors only use “allowances” when they cannot know the cost of a particular task. An example is the cost for drilling a well, since the GCs can’t know in advance how deep they will need to drill. Many modular general contractors prefer allowances – especially for things like excavation and flooring – for two reasons. With allowances, they don’t have to spend as much time preparing their proposal, since they don’t need to know the price. More importantly, allowances protect the modular GCs’ profits, since they make you responsible for all additional costs. If there are too many allowances, you are at risk for significant cost overruns.
Modular General Contractors: How Compare Proposals
In my experience, most customers have a difficult time sorting through modular general contractors’ proposals. This is not surprising, since there are hundreds and hundreds of details involved in building a home. Comparing proposals is made even more difficult by the fact that each estimate is likely to define the scope of work differently and provide very different levels of detail.
But there’s no reason for you to make this comparison on your own. First, make a list of the differences between modular general contractors. Then ask each of them to explain what’s in their proposal. This will give you a much better idea of how the proposals compare. You may be surprised at how much is missing from each competitor’s proposal, but it is better to be surprised now than later. If it turns out that one or more of the proposals need to be improved, ask those modular general contractors to make the changes.
For more information about how to compare modular general contractors, see Selecting a Modular Home Dealer, Selecting a General Contractor, and The General Contractor’s Responsibilities for Building a Modular Home in my book The Modular Home.