Remodel & Renovate in 95129>Question Details

Oscar Wong, Home Owner in San Jose, CA

Building a new house in West San Jose.

Asked by Oscar Wong, San Jose, CA Fri Apr 25, 2014

I want to knock down an old house in West San Jose, zip code 95129. I want to build a brand new house, 2,000 square feet living space and 400 square feet garage. I have talked to 12 licensed contractors. The lowest turn-key quote is $150 per square foot. The highest is $375 per square foot. Why so much difference?

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Answers

13
Be sure to check out the "leave one wall standing" option with the city. This can make a big difference in the process.

The home values are so strong in 95129 that you might want to go with the "right" construction with references and recommendations -- look at homes they have built. It is probably somewhere closer to the $375.

And, be really clear when you are getting your plans done! My neighbor added an upstairs washer-dryer mid-way and the changes really end up hitting your bank account hard.

Good luck!

Erica
2 votes Thank Flag Link Thu May 8, 2014
Looking at your name and the way you are approaching your project, I would venture to guess that you are a first generation Asian immigrant residing in the West San Jose/Cupertino/Saratoga area.

I have seen many people in this general area handling the construction project in the similar fashion. I have seen many cost overruns. Asians like to save face. Even when they get taken, they want to save face by pretending everything went OK. They may under report their monetary mistakes to look good. I have seen more than once where the homeowner under stated the construction cost greatly to save face.

If you are talking about “turnkey” project cost, in the construction field, this is typically the cost of the whole project to be move-in ready. The project cost starts from design of the new house, tear down the old house, permits, school fees, frame the structure and finish the interior. Everything is completed down to the cabinets and flooring. The utilities, sewer, driveway, walkway and landscape, etc. are all done. When the project is done, you are handed the house key; you open the door and you are ready to live in the new house.

In the Asian community, I have noticed in a typical low bid, the “turnkey” cost is an empty shell, from the foundation and up, rough finish only, not even close to move-in condition. The owner is expected to separately purchase or pay for the finishing materials inside the house that at the very minimum, bathroom, kitchen, doors, lighting, trim work, appliances and often, upgraded windows. Permits, design/engineering, driveway, walkway, landscape, sewer, utilities are all excluded in the bid. This is not close to the construction’s turnkey definition. In the end, when all the costs are added, the total is way higher than the initial expectation. Among the people that I know, in the past six years, I have yet to see a completed, true turnkey project at $150 per square foot. When all the costs are added up, they are way more. If you think you are going to build a 2,000 square feet house with a 400 square feet garage at $300,000 to $360,000 all-inclusive, ready to move in, I have my doubts.

The key to negotiation is getting competitive bids. When I buy a new a car, I scope out the maker, model, color and options; after that, I contact at least five car dealerships’ fleet managers to get the best possible price. I make them aware that they have competitions. I ask for apple-to-apple bids, I do not change my requirements. If a dealer wants my business, he will give me his best price. If he does not have the exact car in the lot, he will contact other dealerships to trade for the car with the exact options that I want. I had a San Jose dealer trading with a central valley dealer to get the car that I wanted. I do not walk into a dealership, give the dealer a blank check and ask for the best deal. If you enter into a construction contract without a clear scope of work, by signing the contract, you lose the chance for future competitive bids. You are at the mercy of the general contractor (GC), and you are in essence, opening up your bank account for future change orders and cost overrun.

By following other people’s typical project approach, you may end up experiencing their untold hardship. If you sign with a GC, before even having a set of city approved building plans, you are merely signing a ballpark estimate. The contract is likely loosely written, subject to change orders. Those change orders would cost you dearly.

I am happy that you are asking for public input. I am concerned that you are falling into the typical pattern that many people in the area have experienced. Many ethical GC I know will not give bids unless they see the city’s approved building plans.

My advice is, do not talk to the GC at this point. Select a good architect, get all the design done, get a clear scope of work done, get a clear materials list done, get the building plans approved by the city. After all these are done, get apple-to-apple competitive bids.

Good luck!
2 votes Thank Flag Link Wed Apr 30, 2014
If you have an architect drawn up a completed design. You can probably narrow the contractors to a lot of less. Roofing materials specification(tile, composition shingle, solar reflector taping), type of windows specified gas filling type, insulation specifications, flooring type materials, cabinets.
Appliances, circuit panels etc.

While some contractors hinted theirs are lower than others. They often over run the price. Are you controlling the schedule with fines per diem if not completed in time?

Also the reputation of the builder is everything. It appears a lot of features have not been fine tuned.

Sam Shueh
Keller Wms Cupertino Realty
1 vote Thank Flag Link Wed May 28, 2014
That depends on your design and materials used. The $150/sf will look like a modest rentals while the $375 may have more than you need.

I suggest you specify the materials and quality required as opposed to say I want a good kitchen.
Cherry, engineered wood. I also suggest it has as much green features including solar to the grit.
Insulation and cooling is important. You need to consider R31, below floor insulation, reflective tape on the attic.

At the moment most contractors are busy with new homes and many now demand higher compensation and longer time for project completion. Suggest a penalty clause as many contractors tend to drop everything off work on other homes in the midst of your home.

Sam Shueh
Keller Williams Cupertino Realty
1 vote Thank Flag Link Sat Apr 26, 2014
$155.00 sq/ft is a "hook" quote, that is how the hook you. a realistic cost is around $275.00 for a standard house. but I have a feeling you are going for the $155.00 scam good luck
0 votes Thank Flag Link Sun Jun 28, 2015
You should talk to architects/structural engineers before you talk to contractors. You need to know what designs are possible and choose one. Once you have your design plan you can ask different contractors how much they would charge you for finishing the remodel based on your plan. That way you get apple to apple comparisons when you compare the contractors' quotes..
0 votes Thank Flag Link Mon May 26, 2014
Timber Creek Construction, is $155 per square foot really turn key cost? What's included in this cost?
0 votes Thank Flag Link Thu May 22, 2014
Oscar, feel free to get in touch with me and we can discuss your needs.

Raymond Sinsley
Timber Creek Construction
raymond@timbercreekremodeling.com
Flag Thu May 29, 2014
Feel free to get in touch with me if you like.
I have built 2000 square foot houses for $155 per square foot.
4400 square foot houses for $244 per square foot.
6800 square foot houses for $398 per square foot.

Raymond Sinsley
Timber Creek Construction
raymond@timbercreekremodeling.com
TimberCreekRemodeling.com
408.718.8657
0 votes Thank Flag Link Wed May 21, 2014
Highly recommend this Contractor. Does exceptional work at reasonable prices for the quality provided.
Flag Sun May 25, 2014
Timber Creek Construction, is $155 per square foot really turn key cost? What's included in this cost?
Flag Thu May 22, 2014
They are giving you quotes for different final products. I would recommend you to start with an architect, develop the plans and then get contractor quotes based on the same design. I am sure the price spread won't be as wide as what you are getting now.
Web Reference: http://talisrealestate.com
0 votes Thank Flag Link Thu May 8, 2014
Hi Oscar:

We live in San Jose too.

Right, at $150 its very likely you are getting a build that is rock bottom and in the end it
will show.

At $375 its high end construction, such as Marble, high end kitchen, a $75K kitchen
with say Thermador or Wolf appliances. High end Body spray showers in the Baths.

So be careful and good luck.

Perry
Web Reference: http://ruthandperry.com
0 votes Thank Flag Link Sun Apr 27, 2014
No design. I am talking to contractors. Most people I know, they sign with a contractor first. The contractor takes care the whole process.
0 votes Thank Flag Link Sun Apr 27, 2014
Oscar,
this is exactly WRONG for many reasons. First the Archetect and contractors are different professionals. The contractor has NO idea what he will build for you. Any contractor that refers you to an archetct will refer you to HIS architect only. He will probably recieve a referral fee. The two may charge you for design etc that is already existing in thier files…not custom.
Pre-existing designs can be purchased with wet stamped engineering for local codes etc.

The main thing is that the plans MUST be VERY specific regardin EVERY detail, exact appliances, exact locations, exact tile and floor coverings..or at least the square ft value of the cost for such items. For instance, floor coverings at 10 per square ft, installation by contractor. Cabinets and other items can have a value of materials stated in the contract. If you spend less you owe less, if you upgrade you pay the difference.

I hope this helps.
Flag Thu Apr 16, 2015
When you say "turn-key", are they all apple-to-apple? Do they all include the same items? What I have noticed is different contractors may have different interpretation of "turn-key".
0 votes Thank Flag Link Sat Apr 26, 2014
How far along are you in the design process?
0 votes Thank Flag Link Sat Apr 26, 2014
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