Definition
An allowance is a builder-specified budget for choices in specific categories—flooring, cabinetry, countertops, paint, fixtures. Selections within allowance cost nothing extra; amounts over the allowance are your responsibility. Understanding allowances helps you budget for desired selections.
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Allowances are common for flooring, cabinetry, countertops, paint, and fixtures. Builder specifies allowance amount (e.g., $2,000 flooring allowance). Selections within allowance cost nothing extra; amounts over allowance are paid by buyer. Allowances manage builder costs while allowing buyer choice. Understanding allowance amounts helps buyers budget for desired selections. Insufficient allowances create budget surprises.
Pro Tip
Verify allowance amounts before signing your contract. Inadequate allowances require large out-of-pocket payments for quality selections.
Example
A contract includes $3,000 flooring allowance; buyer selects flooring costing $4,500, paying $1,500 additional out-of-pocket.