Getting To Know Builder Allowances

When you’re looking for a new home you may hear the term building allowance mentioned, but what is it?

Cheyenne and Homes By Guardian have seen great growth in this little pocket of Wyoming, and with more growth, new homes need to be built! Single-family homes are what we do best, and we’re currently building our new community of Whitney Ranch.

Whitney Ranch spans 580 acres between the northwest section of Whitney Road and Dell Range Blvd that will have 87 single-family lots and 24 twin home lots!

Whitney Ranch Specs

Our new home community is being crafted with an abundance of amenities that will make life in Cheyenne great!

  • Traversing 580 acres of pristine Wyoming land
  • Positioned in the northwest section of Whitney Road and Dell Range Blvd
  • Outdoor amenities include an exercise path, public park, and greenway connector
  • 87 single-family homes
  • 24 twin homes
  • Mixed-use commercial spaces
  • Valley views

Collaborate with Homes By Guardian today,  set roots in Cheyenne with a home that is of the highest quality construction and materials, and get to know more about builder allowances in today’s post!

Getting To Know Builder Allowances

What is a builder allowance in new home construction? This question often pops up in the quest for buying a new home.

A builder allowance is what the home contractor may offer you in the amount of what would cost them to provide the product or service. This allowance is subtracted from the total contract price in a new home build, both in custom and model homes.

For example, if you agree to purchase your new home for $400,000, the builder may give you an allowance for $15,000 because you bought your own appliances, so the final price would be $385,000.

Why is a builder allowance necessary?

Builder allowances are set up for a variety of reasons, including a cost that is not known prior to construction, already having appliances, and customer’s selections of products and materials.

It’s important to note that builder allowances are not new home upgrades; they are distilled credits for the amount that it would take the builder if they provided the item — labor and materials.

What are the guidelines of builder allowances?

When it comes to builder allowances, each construction builder will vary — there are no hard, fast, or concrete rules when it comes to allowances. Some builders won’t allow you to bring any of your appliances, while others will give you room for a limited amount.

The thought behind some builders is they see this as almost a custom build type of situation. If you’re bringing in a large amount of products or materials, you may as well hire them as general contractors for a custom home build.

Most building companies work with homebuyers and compromise a reasonable amount of allowances beforehand, from flooring to light fixtures and appliances. There is also no set list.

How are builder allowances configured?

Again, different home builders will all be slightly different — some will give you a dollar-for-dollar deal, while others will cut you a percentage of their original cost.

An example of the first instance would be a $15,000 allowance for $15,000 worth of a specific type of wood flooring. In the second scenario, you may only receive a rebate of $10,000, which is their cost, while the other $5,000 they keep as overhead and profit.

Builder allowances can be advantageous if you already own and love your appliances or other products and materials you want to incorporate into your new home build. Work with your building contractor to negotiate any builder allowances, and ask them what they’re willing to work with you on.

For more information about our new community Whitney Ranch in Cheyenne, reach out to us today!