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Frequently Asked Questions

Why choose a “Cost Plus / Fixed Fee” house?

This type of system is best suited for someone who wants a small custom home but doesn’t have the budget to pay a high end, large custom home builder. Because you are paying all of the cost of the home (as you would with any new home), you are essentially hiring us to put the house together as you requested. We do not bear any burden of overages or price fluctuations during the building process. Consequentially, we do not charge as much for building the house because we do not carry as much risk.

How much am I saving by building with a “Cost Plus / Fixed Fee” system?

If you were to build a house of 1500 sq.ft., at a cost of $80 to $90/sq.ft., you would be paying RVR Builders a markup of approximately 13% - 11% respectively. As you can see, the more you spend on your house the less percentage our cost is as a total of the project. Our system will save you anywhere from 5% - 10% on the cost of your home.

I have heard of the “cost plus” building concept, but how is the “fixed fee” idea different?

The “cost plus” building process is not a new concept. What is unique is the “fixed fee” idea. The usual “cost plus” process involves the total cost of building the home plus a percentage added as the General Contractor’s fee. The problem with the percentage method is that the more you spend on the home, the higher the General Contractor’s fee becomes. With this method, there is no incentive for the General Contractor to save you money. In fact the opposite is true. He would have more incentive to spend more money. With the “fixed fee” method our fee is “fixed” based on the size of the house. This removes the concern that as the "General Contractor," RVR will run up the price of your house to increase our profits. Our focus in the home building process is to get you the most quality for your money.

Why are “generous allowances” for things such as lighting and flooring, important to me as a home buyer?

Many times homes are bid with allowances for things such as lighting, flooring, cabinets, and paint. This is because many times the homeowner doesn’t know exactly what they want until closer to the installation time for these items. With generous allowance provided during the bidding process it allows a more realistic idea of what the homeowner will spend on the items that really make up one of the most important aspects of the home. These are the items with the most emotional and aesthetic value to the homeowner. As the homeowner you don’t want to be surprised that you ran over your budget and have to settle for less than you imagined your dream home to be.

This also allows for an accurate accounting with the bank when you apply for a loan. Many times any overages come out of your pocket at the end of the process and cannot be incorporated into your home loan. With the allowances incorporated into the bid, you will already be approved on the amount you spend without any personal financial burden outside of the loan. Any allowance amount not used goes back to you.

Why a 5% overage allowance?

As the building process goes on and the homeowner thinks of something not discussed in the bidding process that he/she might want to add, change, or move, the 5% allowance will typically cover that. The allowance is also in place to cover anything that might have been only an estimate in the bidding process. Some items will be submitted as estimates and the final cost will be known at the completion of the work. Some examples of this would be concrete flat work, or anything where the actual amount of material is not known until the job is completed.

Because our fee is fixed and isn’t hidden in the total bid, it does not include a cushion that most conventional home construction bids will have. A conventional bid includes this cushion because the General Contractor doesn’t know what will come up in the process. He includes this cushion to protect his profit. With our system, if any of the allowance isn’t used it goes back into the homeowner’s pocket. Likewise, if the homeowner exceeds the overage allowance, they are responsible for the overage. REMEMBER, you pay all of the costs, we do all of the work.