What Is a Pre Construction Services Agreement? Why Is It Better?
Maybe you’ve never heard the term “Pre Construction Services Agreement.” If you’re building a custom house, you should change that.
So what is a pre construction services agreement?
Many residential builders offer a free estimate upon the homeowner’s request at the very start of the custom building process. In fact, Bluestone did this up until about 10 years ago. It’s basically putting a total sticker price on a new home and letting a homeowner say yay or nay. Like anything else fast and furious, it’s not very effective.
For one thing, builders don’t price apples-to-apples. For another, builders are never of equal caliber.
Building a house is one of the largest investments, in terms of both time and resources, that you’ll make in your lifetime. You’ll have to live with the decisions you make today for years to come.
When You Go With a Free Estimate Rather Than a Pre Construction Agreement, You’re Setting Yourself Up For Failure.
Or rather, you’re setting yourself up for budget problems down the road.
Pre Construction Agreements are less commonly used, but at Bluestone, we truly believe it’s the right way to select a builder. When a homeowner selects a contractor based on an early estimate, they are shortchanging the hiring and overall construction process.
Our Pre Construction Services Agreement encompasses:
- Drawings
- Specifications
- Allowances
- Budget
- Architecture and design
How Does a Pre Construction Services Agreement Work?
1. Develop a relationship with the homeowner.
And anyone else already involved in the project, such as an architect.
2. Assemble a team of experts.
This may include:
- Architect
- Subcontractor
- Structural engineer
- Interior designer
- Landscape architect.
3. Provide our professional insight.
- Constructability
- Material choices
- Preferred vendors
- Design details
4. Help with selections for your new home.
Our goal here is to define as many building materials and details as possible.
5. Create an initial budget.
We use starting cost inputs. Then we revise the budget through conversations with homeowners and project leads, to arrive at a final budget we can adhere to.
6. Draft a custom home project schedule.
This way the homeowners and the building and design professionals understand what to expect and can commit accordingly.
7. Work up plans and specifications.
- Draft a set of construction plans
- Meet cost goals
- Detail expectations for various inputs and labor
Sound like a process? That’s because it is! But we think it’s worth it.
Our Pre Construction Services Agreement is drawn up for a fee, which covers the costs of our time and resources. It can take up to 2–3 months to complete.
Why We Use a Pre Construction Service Agreement
1. A Pre Construction Service Agreement is useful for cost management.
A free estimate or a construction bid will ballpark costs. A pre construction agreement allows for more exact cost estimation, better decision-making, and a detailed budget to follow.
This also provides more transparency into the actual costs of building your new house. With detailed insight into labor and material costs, a homeowner can make good decisions with their builder and team.
If you are building a five-million-dollar home, you want to know what you’re paying for, right? The Pre Construction Agreement provides this in spades.
2. A Pre Construction Service Agreement pulls a team together and acts as a filter.
Building a house is not like a commercial project. A homeowner and builder need to have rapport. It’s a year-long process, and you’re going to be talking multiple times each week.
Compatibility is incredibly important. And values should align.
Bluestone’s priorities are quality, schedule, and price, in that order. If this doesn’t suit a homeowner’s style, they may want to choose a different builder. With a Pre Construction Agreement, we are able to discover irreconcilable differences early on and avoid wasting time and resources.
At Bluestone Construction, we take pride in offering fantastic service before, during, and after your custom home build.
As we complete the Pre Construction Services Agreement with you, we provide cost, value, and schedule expertise, to help you make sound design decisions and meet your goals. We also use it as a cost effective way to begin our relationship with you and ensure we make a good fit. If you have questions about the Pre Construction Service Agreement or about how we work, please take a look at our process page or contact us directly.
