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A Cautionary Tale re: Prefab Home Kits

Excellent article by Preston Koerner @ Jetson Green about “kit of parts” prefab homes versus all-in, turnkey homes like ours.
A Cautionary Tale re: Prefab Home Kit
By Preston on Apr. 23, 2012
A future homeowner inherits a chunk of land in Ulster County, New York and decides to put a dreamy modern prefab on it.  I can understand that.  The owner picks an LVL model home from Rocio Romero, and the kit costs $47,000, including such things as the plans, a construction binder, open wall panels, certain structural materials, and the exterior siding.  The owner budgets just over $120,000 to finish the 1,669 square-foot home and hires a contractor to do the work, but that’s where things go wrong.
Turns out, the contractor didn’t complete at the low-bid price, according to an article in the New York Times.  The prefab kit home was ultimately finished for ~$260,000 (~$90,000 over budget), but the owner had to tap retirement savings, credit cards, and friends/family cash to get a certificate of occupancy.  Ouch!
So, what went wrong?
It’s unfair to speculate, but let’s just keep a few things in mind, especially for those of you thinking about purchasing prefab in the future.
The Kit of Parts: First, the prefab kit from Rocio Romero is just that: it’s a kit of parts that still requires labor, transport, the land, windows, insulation, and various other finish items.  Other than perhaps the transport, everything is subject to local pricing.  So it’ll cost a lot more on the coasts than everywhere else.
The Ballpark Cost: Second, Rocio Romero informs purchasers that a LV home will cost anywhere from about $120-$195 per square foot to finish.  Thus, the LVL model home — which has an open living room and kitchen, three bedrooms, and two bathrooms –  should cost anywhere from $200,000 – $325,000 to finish, including the kit.  The owners mentioned in the NY Timesfinished their home within this range at $260,000, but not for the quoted low-ball from the first contractor.
The Prefab Builder: Third, all prefab is not in the form of a kit of parts.  Certain companies like Blu Homes andStillwater Dwellings work the entire process from start to finish.  So their pricing — and this is big a marketing point for these companies — comes with more certainty.  I think prefab from companies with a building division/program will have more pricing certainty.
The Late-Night Homework: Fourth, don’t be discouraged but also do your homework.  Browse our archives of green prefab and ask lots of questions before you move forward.  Soon we’ll have more resources available for those interested in prefab.
See the entire article here: http://www.jetsongreen.com/2012/04/cautionary-tale-regarding-prefab-kit-homes.html