What’s a Reasonable Carpet (or Tile) Allowance?

As a quick followup to my earlier post about construction allowances, I just wanted to touch on the topic of “how much is enough?” when it comes to flooring allowances. For our project, we have allowances for both carpet and tile. The oak hardwood is included in the base contract price.

The agreement that we’ve reached with our builder includes a carpet allowance of $19 per square yard (including padding and installation). For tile, the allowance is $2.25 per square foot for the tile only (install is covered by the builder). Are those allowances large enough?

For the carpet allowance, the short answer is: probably not. The longer answer is: it depends. For the tile allowance, the answer is: yes, probably.

Carpet allowance

For context, we’re talking about a relatively high budget (for the area) custom build. Sure, $19 is plenty to get carpet installed if you’re not too worried about quality. But if you want something that will last… Well, it will likely cost more than that — at least around here.

For example, when we built an addition on our current home a few years ago, we had a carpet allowance of $25 per square yard. At that price point, we got decent (not great, but pretty good) nylon carpet. This time around, I’m guessing we’ll spend at least $25-$30 for a suitable carpet (and pad).

Tile allowance

For tile, I tend to think we’re in a more reasonable ballpark. From what I can tell, we can get suitable tile for pretty close to that price range. But a word of warning on that “free” (or included) installation thing… If your builder says he’ll cover the tile installation, be sure you know exactly what’s included.

In many cases, they’ll only pay for the simplest possible installation. If you want any sort of fancy tile work that goes beyond a standard layout (e.g., accent tiles, etc.), you may have to pay extra. This isn’t a huge deal, but you need to know what you’re getting yourself into.

What if your allowance is too low?

If you realize that an allowance is too low, you have two choices. You can either negotiate a larger allowance, or you can plan to pay the difference. That’s it. There is no middle ground.

Hopefully you’ll be able to get a larger allowance at your preferred price point, but that’s not always possible. In some cases, the only way to get the builder to agree to a higher allowance is to increase the contract price. Of course, in that case you are essentially paying the difference.

The benefit of building the added cost into the contract is that it’s more readily finance-able, as opposed to paying the difference as an out-of-pocket cost. But just because you can finance it doesn’t make it a good idea…

Construction, Financial
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