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I have always used allowances in my design-build custom home projects. The allowances always include specifications and detailed estimates. For example, the plumbing fixture allowance would include a list of the fixtures included, the manufacturer and model number of each fixture, and the cost included in the allowance. If the manufacturer's cut sheets are available, they would also be included. The same for appliances and light fixtures. For finishes like flooring, the allowance would include the species and grade of hardwood, the manufacturer and product name of the laminate or vinyl flooring, or the manufacturer and style of the tile. Each allowance would be accompanied by a room by room quantity estimate and square foot cost of both labor and material.. For carpet, it would also include the grade of pad. The allowance sheet includes a note that the style of carpet could affect the cost, i.e. berber or carpets requiring a pattern match would cost more. The client is given a 3-ring binder containing a copy of the contract, specifications, budget estimate, and allowance information. The clients are instructed to take the notebook with them when visiting our suppliers showrooms.

This system has worked well and has never "blown up in my face."

Allowances always get me in trouble!

Completely disagree with their take on the allowances. Prior planning prevents poor performance. Before the job starts all of the allowances are already chosen. If they want to linear drain then that can be done and additional costs are incurred. That is brought up with our in-house designer. Our designers are experienced and know how the work is being performed in the field.

We give all of our clients allowances on certain finishes, not all of them. Specifically cabinets' countertop Plumbing fixtures electric fixtures tile materials flooring shower doors and a few other things. This does help us control our cost and keeps the communication clear with the clients. Also, all allowances are required to be chosen prior to construction being started.

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