Here's a dirty little secret about home builders: you can always find one who'll tell you they can build your dream home (with everything you want) for your budget. Why?
There are two main reasons.
First, there are lots of builders out there who are desperate for a deal. They'll tell you anything you want to hear. And because you want to hear it, the emotional side of your brain will convince you it must be true.
Second, once you've signed a contract and started to build, it is nearly impossible to fire the builder and find another one who'll finish what the first guy started. Why would you want to fire your builder? Because he reeled you in with lofty promises, started building, and then started hitting you with change orders.
It sounds like this: "Oh, you wanted those kind of cabinets? That's not what we budgeted for. That'll be an extra $5,000." Or, "We put in a $2,500 allowance for tile, but what you picked costs $4,000, so I'll need an extra $1,500."
Here's how to be mindful of these traps and avoid a builder who will take advantage of you. Before you start the journey of finding the right builder, take the time to sit down and rationally create the list of your must-haves, like-to-haves, and could-do-withouts. Prioritize the list. Know what you'd be willing to give up and what you refuse to compromise on. Sit with the list for a few days, then revisit it. Think through what it will feel like to give up some of the things on the list, since you know it's unlikely you'll fit 100% of your list within your budget. Doing this helps you to prepare emotionally for those decisions.
Armed with your list and mental preparation, it's time to talk to some builders. Listen for transparent talk about what's realistic and what isn't. Ask for details. Ask about how the estimating process works and how the builder comes up with the price. If you hear the word allowance used a lot, it means that the builder doesn't really know how to estimate the cost and will low-ball the allowances to get you on contract.
Go home and compare the conversations. Then narrow your list of builders down to the ones who gave you straight talk and didn't paint an excessively rosy picture of what you can afford and how pain-free the whole process is going to be. Trust your instincts and the information you have. Knowledge is power, and remember, you are also the customer.