How Allowances Work in New Construction
Author: John Kaltenbach; Published: Aug 22, 2013; Category: Albuquerque, NM new home construction; Tags: Custom Home Contracts, Homebuilding contract allowances, New Home Building; Comments Off on How Allowances Work in New Construction
Q: How do allowances work in New Construction?
A: Building a custom home in Albuquerque or Santa Fe, New Mexico is different than purchasing a production style or “tract” home. You are not picking a floor plan and using the tract builders standard selections. Allowances allocate funds to parts of the job that haven’t been fully specified at the time of contract signing. For example if the homeowner has yet to find the right kitchen cabinets, the allowance permits construction to begin by specifying how much can be spent. It sometimes sets a date when final selections must be made. Most projects include some allowances, but because they can be a source of uncertainty and potential stress, builders work with the homeowners to minimize their number.