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Builders are actually in an extremely competitive marketplace, with a race to the bottom culture on costs. They also bear a huge amount of risk, usually committ

• xyzzy_plugh 7y ago
  Except when the developer is also the builder, which is becoming more and more commonplace. And fixed fee contracts? What planet? I don't know of anyone who has built anything in the last decade or two that hasn't gone over budget. If you're buying materials through the developer they're taking a margin.
  • bluGill 7y ago
    Developers are taking their margin on materials, but houses are easy to bid to an exact price. Many developers are building houses before there is a buyer. As soon as the hole is in the ground it goes to the real estate market, at any time you can buy it, and they will make changes per request - they assume you will choose paint color (any color is the same price), if you want to add a fireplace that will cost you. Often these houses are finished without before they are bought and go on the market at market price. Of course the point is no builder would take the above risk unless he could estimate his costs with enough accuracy to ensure that he makes a profit on the deal. Edit: Note that builders build enough houses to have processes and procedures to estimate them. If you build anything to a standard such that it is like everything else that is vastly cheaper than if you build something unique. There is a lot of ways to make a house custom within the standard, but if you want a round tower that will cost because builders don't know how to make round (but settle for octagon and suddenly you are back to standard)