September 22, 2016

After all is said and done, how much does your builder walk away with?

Do you wonder how a builder decides what to charge for a new home? You know that you pay for the lumber, carpet, fixtures and all the details, but how is the final price determined?

Buying a home requires a lot of money. The cost is based on many different factors, including the construction, land and the marketing and administrative costs for the builder. And of course, the net profit.

Does it sound any easier to understand?

Most builders will charge in a similar way. The construction of the house will account for approximately 50% of the base price of the home.

There are several costs within the construction factor. There are direct costs, which are the sticks and bricks. These are all of the materials that go into the home, from the lumber to concrete and windows to carpet.

The work is usually mostly provided by subcontractors hired by the builder.

Then there are construction labor costs. These are the costs associated with work performed by the builder’s employees. These go along with the indirect costs, which are usually performed by the builder’s employees. They include the correction work that is done to fix any mistakes by subcontractors.

You will also be charged the construction interest on the home. To finance the purchase of the lot and the cost of construction before you pay the builder, the builder takes out a bank loan. The cost of the loan, including all interest and fees, will be figured into the base price you pay.

The actual cost of the lot can be between 25% and 40% of the base price. With the cost of land constantly going up, especially near metro areas, the lot portion has increased over the years. Added to your land costs are any off-site improvements, such as water and sewer lines, street developments, curbing and paving and driveways and sidewalks.

Many builders offer a discount on the base price, often by paying for points at settlement, to encourage first-time buyers. A discounted home will often have construction costs that equal 50%, lot costs of 30%, a discount of 3% and a 17% gross profit.

Out of the gross profit, the builder deducts administrative costs, marketing costs and taxes.

If you choose options, you could add 10% to 30% to the base price.

Surprisingly, builders walk away with less profit than you would expect. Net profits on the sale of a home often ranges from 2% to 6%. In general, the larger the home, the higher the net.

You can easily find out the net profits for builders that are publicly traded companies. You simply have to read their annual reports.

When you are contemplating the building of a home, sometimes you should shop around a bit. Compare the costs for similar homes offered by different builders. Ask the builder how much of the cost is construction. They may or may not tell you. …

Do you want to know how to make money online?

Articles that make a list of things that people like to read, or like to know about.

“Listicles” is an amalgam of “articles” and “lists” to get “listicles”, get it?


For example:

1. The top 10 vacations spots On Earth.

2. 3 things you should never do on a date

3. 10 foods that stop the aging process

4. The top ten selling toys of all time

5. 7 ways to make new friends in 30 days or less

6. 3 ways to drive her crazy

7. 5 neat ways to make money online

8. The 10 best actors of all time

9. 50 ways to generate traffic to your website

For each article that lists certain things you have to list those things that the headline talks about and then explain each of them in turn.

That is the essence of a “listicle”.

People love to read about lists.

Anything about a list.

“The Top Ten” format is always a good way to start an article. It could be the top ten anything. You can write about the top ten this, or the top ten that, or the top ten whatever.

You can write about the “7 best ways” to start an online business from home and then develop those seven different ways to make that money online from home.

You can write about the ten best recipes that your grandmother left you and how you enjoy cooking them. Each one would have to be summarized in short yet comprehensible form in the body of the article so that the reader’s attention can be attained and kept.

What you write about is irrelevant.

But if you write articles about lists, about anything that can be put on a list like the above you can command attention from your readers because we all love lists.

There is something curious about an article that has any number in its subject that talks about the top ten of this or the seven best of that or the three things you should never do in such and such a case.

We want to read articles like that.


We have gotten to love them as we see more of them.

Use this strategy when you next write an article for your business.

You don’t use articles in your marketing efforts you say? Well you should. Listicles are now on the fast track to becoming a popular method to drive traffic to any website. Any online business can profit from listicles. If you do not use them you are depriving your website of the lifeblood of what it needs to make you money. You are in fact at a disadvantage.

Listicles are being used by the most successful online marketers to drive traffic as well as by affiliate marketers who rely on new traffic to generate and grow their commission checks.…


A commercial bank is a business entity that deals in banking with a view to make profits. Every commercial bank aims to make profits in such a way that it does not compromise on its objective of liquidity, which is vital for its own security and safety.

• Meaning:

Since a commercial bank has to make profits in such a way that its liquidity remains intact, it diversifies its funds into various assets. A well – diversified and balanced asset portfolio ensures its sound and successful working. Various factors play an important role in determining the profitability and liquidity of commercial banks. These factors are taken into consideration while creating the asset portfolio of the banks.



1) Amount of working funds:

Funds deployed by a bank in profitable assets are the working funds of the bank. Profitability of a business is directly proportionate to the amount of working funds deployed by the bank.

2) Cost of funds:

Cost of funds are the expenses incurred on obtaining funds from various sources in the form of share capital, reserves, deposits, and borrowings. Thus, it generally refers to interest expenses. Lower the cost of funds, higher the profitability.

3) Yield on funds;

The funds raised by the bank through various sources are deployed in various assets. These assets yield income in the form of interest. So, higher the interest, greater the profitability.

4) Spread:

Spread is defined as the difference between the interest received (interest income ) and the interest paid (interest expense ). Higher spread indicates more efficient financial intermediate and higher net income. Thus, higher spread leads to higher profitability.

5) Operating Costs:

Operating costs are the expenses incurred in the functioning of the bank Excluding cost of funds, all other expenses are operating costs. Lower operating costs give rise to greater profitability of the banks.

6) Risk cost:

This cost is associated to the probable annual loss on assets. They include provisions made towards bad debts and doubtful debts. Lower risk costs increase the profitability of banks.

7) Non – interest income:

It is the income derived from non – financial assets and services It includes commission & brokerage on rencittance facility, rent of locker facility, fees for underwriting and financial guarantees, etc. This income adds to the profitability of banks.

8) Level of technology:

Use of upgraded technology normally leads to decline in the operating costs of banks. This improves the profitability of banks.

9) Level of Non – performing assets (NPAs):

The profitability of a bank is inversely related to the level of NPAs. Hence, over the years, the NPAs of commercial banks have greatly declined.

10) Level of competition:

Increase in competition generally leads to higher operating costs. This leads to lower profitability.



The extent of liquid reserves held by banks depends on the statutory requirements of the Central Bank (i.e. the RBI) …