Howdy, Ags. So my wife and I are building in the hill country close to New Braunfels. We have finally finished our final home plans and the builder is sending the plans out for final pricing. I expect to get the final contract and pricing in around late November or early December.

However, we are extremely concerned with the supply chain and labor issues we are seeing and hearing about. There is also an escalation clause in the preliminary contract that I do not like seeing in today's economy. We would likely start the actual build around January or February. They estimate 10-12 months for the build to reach completion. So here are my questions:

1) What are the odds that the builder would take out the escalation clause? I am highly doubtful that they would, but does anyone have any information on this?

2) Does anyone that is in the industry have any general information and advice on this issue? Would you still build or would you hold off, and why?

The price has already increased $50,000 in the last 6 months. We do not want to sign a contract and then be hit with a $100,000 price increase in March if things in this country take a turn. I used to think once you sign the final contract then you would be locked into that price no matter what, but that clause changes everything.

I would like to point out that I bought a nice house in South College Station back in 2019 for a great price in today's market. We have no issues staying put and not building, so right now we are really torn on what to do since we do not know the future. But the house plan and lots we are building on are more of "the dream" place for us. Any advice is highly appreciated. Thanks!

I am going through a similar experience, but I'm hoping my timeline isn't as long as yours. We're currently drafting house plans and getting ready to go to pricing. Won't sign a contract until we have plans and upgrades finalized. We're being told that once contract is signed the house will be finished in 6-7 months.

My wife and I are becoming hesitant of the process. Just the drafting process has taken almost 3 months now, and we're always waiting on the builder. We've actually started looking at existing home inventory to see if we'd rather buy an existing home instead of building at this time. At this point we've only put down $5k with builder, so if we have to walk away from that so be it.

My wife is due with our first kid on April 1, we were originally hopeful that the home would be completed prior to baby girl being here, but at this point there's no chance; which is another reason we're looking at existing homes. We'd like to be settled into the home pre-baby rather than trying to move with an infant.

I would amend the contract to state that any further price increases after signing the contract with the agreed upon price must be submitted with all back up included to indicate exactly what caused the price increase.

any reason to not go cost plus if the contractor is up for it?

With the demand for new housing specifically in that area and the volatility in the supply chain etc there is no way the builder is going to agree to that.

Not a builder, but we are in the process of a custom build. We've had to endure the last 9 months, and it's been exhausting. We signed our contract in February and opted to go cost plus - I still don't know if that was the right move at the end of the day, but the intent was to mostly protect both parties specifically with the lumber market. Unfortunately for us the price continued to go up.

My advice to anyone building a house is to make sure you have a lot of cash on hand. The cost estimate our builder gave us was awful - we have blown by the amount we initially were comfortable with and signed a construction loan for. At this point we don't really feel we have a "budget" anymore. We're just viewing it as what it cost to build the house.

If your timeline and budget are wide open, building a custom home shouldn't be too big of a deal. If schedules and budget are big drivers, buckle up!

Thank you all for the replies. It certainly looks like all of the evidence points in the same direction. I am going to wait for the final bid to come out, but this feedback helps a great deal to support my current thoughts on the matter.

Heck, my preliminary bid price for the house (by itself with no land and no features) was the same amount I just saw another home for sale. That same-price package includes a pool, extra exterior garage, land, and other nice things that the wife and I like. I am likely to buy an existing home or stay in my current home, but my past history shows that sometimes I tend to gamble with things like this.

We love our plans and while I doubt we will move forward with the build, it is still not dead in the water. I hope to decide before December 1st.

10andBOUNCE said:

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Not a builder, but we are in the process of a custom build. We've had to endure the last 9 months, and it's been exhausting. We signed our contract in February and opted to go cost plus - I still don't know if that was the right move at the end of the day, but the intent was to mostly protect both parties specifically with the lumber market. Unfortunately for us the price continued to go up.

My advice to anyone building a house is to make sure you have a lot of cash on hand. The cost estimate our builder gave us was awful - we have blown by the amount we initially were comfortable with and signed a construction loan for. At this point we don't really feel we have a "budget" anymore. We're just viewing it as what it cost to build the house.

If your timeline and budget are wide open, building a custom home shouldn't be too big of a deal. If schedules and budget are big drivers, buckle up!

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We are building a custom home now too and this post is spot on. Made my wife and I laugh.

10andBOUNCE said:

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Not a builder, but we are in the process of a custom build. We've had to endure the last 9 months, and it's been exhausting. We signed our contract in February and opted to go cost plus - I still don't know if that was the right move at the end of the day, but the intent was to mostly protect both parties specifically with the lumber market. Unfortunately for us the price continued to go up.

My advice to anyone building a house is to make sure you have a lot of cash on hand. The cost estimate our builder gave us was awful - we have blown by the amount we initially were comfortable with and signed a construction loan for. At this point we don't really feel we have a "budget" anymore. We're just viewing it as what it cost to build the house.

If your timeline and budget are wide open, building a custom home shouldn't be too big of a deal. If schedules and budget are big drivers, buckle up!

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It was almost certainly the right move because your counter-party was never going to eat a big loss. The choice is cost plus and know what fee you're paying or have to deal with a contractor walk off of the job or enter bankruptcy with countless liens left for you to deal with - and every replacement contractor disclaiming any responsibility and charging a PITA fee for dealing with a half finished project.

If you own the land and the neighborhood allows it (vintage oaks? Copper ridge? Somewhere else near NB?) I would just sit on the raw land, stack cash, and wait.

Might be 2 years until there is some calm waters in the building world. Not calm pricing, but just confidence in supply and price forecasting.

We're embarking on the process in Mystic Shores. Luckily we don't have a strict timeline for needing to be in the house. May the supply chain spirits smile upon us all.

Do yall have a builder and if so, care to share who? Just curious. We looked at a beautiful lot there but ultimately decided it wasn't the right time for us (and not sure if we wanted a place that far from home/Houston).

<Redacted>. Apparently we're "cheap" because we don't want to pay $250/300 sq ft. We want to retire early so we won't be building a museum. We will kick off the design process in a couple of weeks. We don't have a timeline for having to be in the house so hopefully the patience will pay off with all of the lead times.

Nice! What are you expecting to be at $/ft if you're comfortable sharing. Either way, good luck with it!

Allllllllllllllll in, around $215-$230/sq ft but we have some contingency wiggle room beyond that and need to save some for furnishings. And a boat. And I'm told a truck.

So you haven't done design yet and you are expecting $215? I haven't seen anything lower than 250 that's not just a track home

I'll be interested for the update after design to see if you could accomplish that and still have anything you wanted in the house

We'll see

shhopkins said:

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10andBOUNCE said:

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Not a builder, but we are in the process of a custom build. We've had to endure the last 9 months, and it's been exhausting. We signed our contract in February and opted to go cost plus - I still don't know if that was the right move at the end of the day, but the intent was to mostly protect both parties specifically with the lumber market. Unfortunately for us the price continued to go up.

My advice to anyone building a house is to make sure you have a lot of cash on hand. The cost estimate our builder gave us was awful - we have blown by the amount we initially were comfortable with and signed a construction loan for. At this point we don't really feel we have a "budget" anymore. We're just viewing it as what it cost to build the house.

If your timeline and budget are wide open, building a custom home shouldn't be too big of a deal. If schedules and budget are big drivers, buckle up!

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We are building a custom home now too and this post is spot on. Made my wife and I laugh.

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Yep…….exactly the same here. Poured the slab in January and looking like we will move in by Christmas. It's "just what it costs." We did fortunately lock in our lumber package last November.

It all depends on so many factors. I can tell you I am working on concrete quotes now. There's a 30-35 dollar per yard difference between 2 places I'm building which are only about 30 miles apart.

The market for everything is insane.

wait for what? a price drop? i wouldn't hold your breath. nothing has gotten cheaper and so far we have no indications it will any time soon.


we are moving most of our builds to specs right now because believe it or not we don't like telling people their dream home is now tens of thousands of dollars more than originally bid.

i get your snide comment but on the escalations we have done. the people that want us to go down every single line item end up costing themselves more than the ones where we tell them "hey there was an escalation in lumber and concrete." almost every single line item is costing more by the end of the build and we eat a lot of it.

we are trying to push our custom clients to cost plus but people think you're instantly trying to screw them when you show them the margin. but, our clients going cost plus have much clearer insight to the bids and some control over what they want to do.

this doesn't even go into who holds the construction loan.

Furlock Bones said:

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wait for what? a price drop? i wouldn't hold your breath. nothing has gotten cheaper and so far we have no indications it will any time soon.


we are moving most of our builds to specs right now because believe it or not we don't like telling people their dream home is now tens of thousands of dollars more than originally bid.

i get your snide comment but on the escalations we have done. the people that want us to go down every single line item end up costing themselves more than the ones where we tell them "hey there was an escalation in lumber and concrete." almost every single line item is costing more by the end of the build and we eat a lot of it.

we are trying to push our custom clients to cost plus but people think your instantly trying to screw them when you show them the margin. but, our clients going cost plus have much clearer insight to the bids and some control over what they want to do.

this doesn't even go into who holds the construction loan.

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Built 23 years ago using a fixed cost with allowances. Building now with a pure cost plus fixed fee (not fixed % fee). We are part of every major purchase decision/issue. I review every invoice…..have found about $10K in errors. I would never build fixed price again…..especially if it is a very custom home.

I'd be very interested in how everything concludes with everyone who shared their building experiences on this thread. If you remember to come back and update when your builds are done and what your final thoughts are then that would be great. I'd love to read about it later so we can all compare. I'll do the same when I have any major updates during the process.

Every contract has price risk.

Firm Fixed price- the contingency is built into the line item estimates, it's fat. Also the allowances may be estimated low to lower the initial final price. You want nicer items or prices go up- you pay.

Cost Plus- labor & material are estimated closer to reality but may actually be estimated lowto get you to sign.

Fixed price with contingency. This gets interesting since most banks and builders don't have process built in for approving the use of contingency funds.


We are in design & estimate stage for a custom home. Went ahead and bought the land.

Our bank loan rules are now requiring a 10% contingency added to the final estimate.

I asked who approves release of contingency- they just looked at me , I'll work it out with the builder.

It will adjust. Always has.

I'm pretty sure if it comes in less than bid (including the contingency)…what is left reduces your principal balance….but not your fixed payment if it is a one time close. No different than coming in under price during normal times…..they just want the bid price to consider likely increase. You should actually want this too.