How to negotiate with a builder

Updated February 21, 2017

Hiring a builder to complete a construction project is an expensive endeavour. Whether you are constructing commercial property, building your dream home or just adding an additional room to your house, hiring a builder is the most important decision you will make. If you are straightforward and let the builder know exactly what you want and how much you will pay, you are more likely to get your project completed within a reasonable cost.

Get an estimate from several builders. Before you choose a builder and start the negotiating process, be sure to get estimates from a few companies in your area. This will help you determine the going rates for the type of project you want completed and help you to negotiate with confidence.

Decide which factors you want to negotiate. When it comes to building, you can negotiate price of the project as a whole, price of individual components, time-frame for completion of the work, how much the builder can deviate from the estimate and warranties.

Figure out the minimum and maximum results of your negotiation before hand. For example, the minimum might be the minimum amount you want to pay and the minimum time-frame you'd like your project completed in. The maximum might be the most you're willing to pay and the longest time-frame you're willing to except.

Negotiate with the builder. Always try to negotiate in person when possible. Share with the builder what aspects you'd like to negotiate and clearly spell out your terms. Start with your best case scenario terms, such as the least amount you'd like to pay, then go from there.

Be clear with the builder that you will walk away from the deal. If the builder doesn't believe that you'll hire a competing company, it will have more power in the negotiating proceedings. However, if you're confident and make it clear that you've done your homework and you know what you want, the negotiation is more likely to end in your favour.

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About the Author

J. Johnson has been completing freelance writing work since September 2009. Her work includes writing website content and small client projects. Johnson holds a degree in English from North Carolina State University.