When Mark and Elaine Smith built their new home they wanted to beat the system.
Along the way they received an education they are offering as a class at Utah Valley State College in June. The couple is also writing a book on how to self-contract the construction of your home. The book will be self-published in November titled "The Owner-Builder Book: How You Can Save Much More Than $100,000 in the Construction of Your Custom Home."The class, "Build Your Own Home and Save Over $100,000," which runs from Wednesday through July 2, is a dry run for the Smiths. They then plan to take the concept on the road in a series of seminars. Fee for the class is $44, which covers both spouses. If only one attends, it's still $44. Each session is two hours.
The class, which begins Wednesday at 7 p.m., will cover such topics as saving money in constructing your home, how to develop room-by-room specifications, how to save money on an architect, how to bid the job, how to avoid change orders, how to budget the construction project and how to schedule the work while saving money.
One topic that is especially important is assembling your team, said owner-builder Mark Smith, a Harvard graduate and president of the Consensus Group, a business management consulting firm. Even though an owner-builder provides the impetus for constructing the home, it's still a team effort. And that team should include such professionals as an accountant, an attorney and a Realtor, he said.
The accountant monitors the costs, the attorney makes sure legalities are handled properly, and the Realtor offers suggestions so the house will be marketable to the next family that comes along.
Smith's wife has been with the Provo school system for more than 30 years where she is now a school librarian and media specialist. She is developing an Internet Web site in conjunction with the book.
As owner-builders, they found that by acting as their own contractors they could not only save a lot of money, they could also add more comfort and convenience that would have been trimmed had they hired a general contractor.
"If you're going to be an owner-builder, why not allow for comfort and convenience regardless if it's fully valued on the market," Mark Smith said.
But Chad Broderick, president of the Utah Valley Homebuilders Association, disputes that owner-builders will save that much. The general contractor fee usually ranges between 6 percent and 10 percent, said Broderick. And as the price of a custom home goes up, the general contractor's cut goes down, he said.
"Contractors don't have $100,000 (profit) in a custom home," he said. Much of the savings the Smiths realized were not in the contractor's fee but in their bargain shopping for materials and subcontractor fees.
The Smiths contracted directly with subcontractors and bought materials directly. "We did what a general contractor does, only better," he said. But Broderick said general contractors can get better prices from subcontractors "because we give them more work." He also expressed doubt that owner-builders can get the same subcontractor prices as general contractors.
Moreover, he said owner-builders may make mistakes that will take away from the savings they could realize.
In their class, the Smiths say they will teach how to avoid mistakes.
A general contractor coordinates the subcontractors and is responsible for mistakes that one subcontractor makes that affects the subcontractor's work that follows. If an owner-builder doesn't coordinate them properly, the owner is responsible for corrections, Broderick said.
A tour of the Smiths' recently completed home in Provo's Riverbottoms area reveals comfort-added items that are both simple and rare. Take the master bath, for example. Above the spa-tub in the garden-style bath is not only a ceiling-mounted heat lamp but also a reading lamp. Mark Smith, who enjoys reading while soaking, said he knows of no other home that has one.
Heating vents in the bathroom are under the tub to keep it warm. Another is under the vanity. Just open a vanity door for additional warmth.
Ever lay in bed with the fan on, then have to hop out of bed to turn it off? Not so in the Smith household. His-and-her light and fan switches are wall-mounted just above their pillows. The guest suite has the same feature.
Meanwhile an electric fireplace in the master has its own thermostat. The fireplace can keep the master suite toasty warm, while the rest of the house can be left much cooler. The fireplace also serves the family room on the other side of the wall. The large room has a two-story volume ceiling and a Romeo and Juliet balcony that looks down on it from the second story. The heat dissipates more because of its size.
Mark Smith said he got a bit of a bargain by buying a fireplace that serves two rooms, but not that much. The cost was one-and-a-half times the cost of a fireplace for only one room, he said.
Seeking a colonial-style home, the Smiths passed on brick and instead went for the more economic vinyl siding, which gives the house a clapboard look. That look, he said, is still colonial.
"You kind of go for the things that you can get bargains on," he said.
The couple did some of the work themselves. But for the majority of the labor they turned to skilled craftsmen. The couple tiled the floors where the design called for tile, while tradesmen put down wood floors and carpet in other areas of the home. But the Smiths bought the wood - a prefinished birch - at a bargain, paying about $3 a foot, then they hired a craftsman to lay it for $1.25 a foot. "He must not have been busy," said Mark Smith. The cost to buy a wood floor installed ranges from $6 to $8 a foot, professionals say.
They also painted the house themselves, installed the electrical and are working on the landscaping.
"We saved about $5,000 on each trade," Mark Smith said.
The Smiths purchased granite for countertops at bargain prices by going to stone boneyards and picking out discards for the smaller bathroom counters. The largest piece, which serves as the kitchen counter, was purchased direct from the supplier, who cut and installed all the granite for one package price.
The estimate for the kitchen countertop alone was $10,000, Mark Smith said, but they did all the granite countertops in the house for about $4,300.
They also found huge bargains in plumbing fixtures. Their brass faucet fixtures were estimated to cost $1,800. "We bought the same brand with a change in design for $650. We were already paying $35 an hour for labor." The savings continued into the yard where sprinklers were estimated at $3,000. The Smiths paid only $1,100.
But they spent a bit more on the garage, which Mark Smith calls a "man's garage."
Constructed with vaulted ceilings, insulated, heated and cooled, it's built to double as an indoor basketball court. "You can take a three-point shot" because of the high ceiling, he said. The garage door openers hug the wall next to the doors in an unusual configuration designed to keep the ceiling clear for basketball.
The house cost $50 a square foot to build but is a $90-a-square-foot house, based on contractor estimates of $85 a foot, plus interest, landscaping and window coverings, said Mark Smith. It took eight months to build, compared with the typical contractor-built house of six months. Broderick said a typical two-story house costs about $75 a square foot for the first level and $70 a square foot for the second level, depending on the roof lines.
"On the grand scale we beat the contractors," Mark Smith said. Then breaking into a whisper, although no one else was around, he said, "I can't understand why it takes contractors so long. I think it's a strategy for change-order profits."
The couple's bargain-shopping saved nearly $150,000 in construction costs, they maintain.
"The savings go straight to equity," he said. The house, which measures more than 3,000 square feet, cost over $150,000 to build. Broderick said he's built homes, too, that were worth more when he finished than the estimate to build. Using Broderick's figures, a 3,000-square-foot, two-story house would cost about $217,000 to build. Mark Smith values his house at about $300,000 with the lengthy list of upgrades.
Based on interviews for their book, the Smiths said general contractors nationally spend an average of only two hours a week at the construction site of a custom home. He recommends owner-builders spend about four hours a day at the site. But Broderick said that doesn't count the time spent in the construction office making sure the paperwork is done correctly. He said he spends about two hours a day at each construction site.
"Contractors are a lot more skilled than you - they can do it in their sleep," Mark Smith acknowledges. "But you care much more."