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To: XBrit who wrote (53003)	7/3/2006 6:21:02 PM
From: Elroy Jetson	Respond to of 116555

Economies of scale and the associated discounts which a large builder can demand give them a much lower cost base than a small builder producing a single home. I hope that doesn't surprise you. Valueminded built his own home in Nashville TN for $67 per square foot. As he mentions he "got burned by a couple of subs", I assume he acted as his own general contractor - putting in his time for free. If a General Contractor charges a 25% mark-up, this would make the retail cost of his construction ($67 * 1.25%) $83.75. A large builder like Pardee pays top dollar for a Construction Superintendent to take the role of General Contractor. In California costs are higher, yet Pardee can build a really top quality home for $58.70 per square foot. I suspect Valueminded would end up with a price far higher than $67 building his own home in California instead of Tennessee - but you never know, he sounds pretty smart and he may surprise me. Of course these square foot numbers do not included the cost of the land, only the construction. A large builder like Pardee sets their sale prices to remain competitive with what smaller builders have to charge to make a modest profit. The price which gives the small builder a profit of 10% or less, gives the large builder who receives major discounts on supplies, and large efficiencies of scale, a much larger profit. If you believe major builders are ripping off Californians by charging what a small builder would instead of something close to their costs - then you are being ripped off. There is no law which forces a business to pass on all of their hard won efficiencies on to the consumer in the form of lower prices. .