When Economics Trump Good Sense

posted Feb 8, 2013, 11:03 AM by Keith Groninger   [ updated Feb 15, 2013, 6:19 AM ]

As a home builder, I spend way too much time worrying about construction costs. Price is of course, the most common criteria used when a builder is selected for a project. The purchase of a custom home is different from any other buying experience. I wish we could base the decision process on value, function and performance, with an understanding that costs are important, but not the driving force of our decisions. Too often economics trump good sense and decisions are made that conflict with the best interest of the buyer.

Every single component of a home involves a potential cost versus value decision. There is a “cheapest way” or a “better way” to do everything. Sometimes they are the same, but often the buyer isn't given the better choice. In an effort to appear less expensive, many builders go the cheapest way because the buyer really doesn't understand the difference. This increases the chances of being selected as their builder and creates an opportunity to increase profits with change orders, when the buyer asks for the better way.

At Groninger Homes, we work with an “open book” project management system. We charge a flat fee for our services and share every piece of information with our customers. We create a cloud-based website for each of our projects and every buyer can choose their level of involvement. With the cloud of secrecy removed, our buyers can weigh the cost-versus-value benefits of all the various choices available for the home. We research to provide information and make recommendations in the best interest of the buyer. Because our fee is fixed, we don’t make decisions that affect our profits and can focus on providing the best service for our customers.
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