Q: What are allowances?

A: The purpose of allowances is to allow the builder to quote a specific price for a home that is not yet complete and where it is expected that the prospective homeowner will make allowable selections based on personal preference. As the house progresses, the builder may make some of these decisions, thereby reducing the number of items, which may be selected by the buyer. It is therefore important that a buyer check with the builder to obtain an up-dated allowance quote. When the house is complete, the actual cost of allowance items is calculated and the buyer is responsible for any excess or is credited, if the costs are less. In some cases the buyer will be asked to make additional deposits in anticipation of expenditures which are in excess of an allowance or which involve items that the builder would not normally install.

Q: How are allowances used by the builder?