Your builder COULD use the subs you found and still be the GC. He just needs to talk with them, get an idea of the quality of their work, and then hire them himself instead of you contracting with them. Apparently he does not want to do that.

I suspect that your agreement with the builder is a cost-plus agreement. That is, the builder's profit is based on the cost of the materials and labor it takes to build your house. So, his incentive is to see that the materials and labor cost as much as possible because that way he makes the most money.

With a fixed-price agreement your builder would have an incentive to use less costly labor. Problem is, a fixed-price agreement also incentivizes him to cut corners where-ever possible.

It is also possible that, instead of hiring the cheapest sub available (who may be using undocumented workers with little or no real building experience as his "crew") your builder has a set of great subs that he has come to rely on to do really good work. Craftsmanship doesn't come cheap.

It doesn't make sense tho that you would be able to get a materials quote that is significantly less than the one he got. If anything, the quote he got should have been quite a bit lower than the best you could find. Builders often get a discount that isn't available to the rest of us. It is possible that he may be jacking up the quote b/c that way he gets to keep the extra PLUS he gets a higher amount for his percentage. Don't believe that just b/c he showed you a written quote from the lumberyard that that is the actual amount that he was quoted.

There are some busineses that will collude with builders by giving them two quotes... a high one to show their customers and a lower one that is the actual amount the builder will pay. Others operate on a kick-back basis. These kinds of thing is pure and simple fraud - but they happen. And, I know of a situation where the builder took a material's quote, scanned it, went to photoshop and changed the numbers on the quote, then presented the higher amount to his cost-plus customer. His fraud came out in court when the businesses records were subpeoned and the original quote was compared to the copy builder had presented to his customers!

Only YOU can decide whether you want to go forward with this builder, find a different builder, or go the GC route. If you decide to GC it yourself, in some states there are some businesses that assist homeowners in building their own homes. For a fee, they guide you along, tell you what permits and inspections you need and how to deal with getting them, tell you what needs to happen and in what order in the building process, help you find reputable subs, etc. You can basically think of these kinds of companies as paid mentors to you as you learn to GC your own project.
But, whether or not you are the GC, you (or you significant other) NEED to be able to be on the job site practically every day that any work is happening. The more you are on-site, the better built your house will be.

Good luck.

Thanks for your input. Just to clarify the lumber quote our builder got. We were at the lumber yard at the same time picking the quote up, so we both saw it for the 1st time that day. The only thing I can think of and I've discussed this with the builder is I may have answered some questions wrong that the lumber guy was asking and that may have affected the quote. for instance, I forgot to include false corners and am now going back to get the cost on those. But still, the difference in the two lumber yard quotes for all materials and windows was ~$30,000. Maybe the builder's lumber yard has a big markup?

I'm not sure if the contract will be cost plus, but it would seem that the only thing he'll be getting paid for is just labor. I'm expecting he'll jack the cost of that up a bit to make some profit. Overall, I think he is looking at this as a small money maker, since there aren't a lot of places for him to tack on additional money either through materials and/or subs. This is partly why I think his attitude has shifted a bit from one of easy-going, laid back to more apprehensive and a bit defensive.

I'm not sure if the contract will be cost plus

You might want to decide what you're doing and if it means hiring a manager/gc/ whatever have a contract drawn and checked by a lawyer and stick to it.

From the sounds of it, you want to be the gc with control over subs and suppliers. In that a case, hire a manager to implement your plans and decisions.

Frankly, I've been building and renovating for years and will not work with clients who insist on "their" trades, except for minor or peripheral ones, e.g., landscaper at the finish of the project.

worthy,

I wouldn't have minded if our builder would have bid the project out such that we culd have had at least 2-3 quotes for each sub, but he provided one and that was it. Not much choice. We never met his electrician and had no say, at least on the plans where light switches, outlets, etc were going to go. I suppose eventually we would have met up with his subs, but not at least giving us a choice amongst a couple quotes is bothersome to me. We have a budget and can''t just throw a bunch of money at subs. It's not to say they aren't good tradesmen, but I know I can get quality work for less.

We are 5 months into our build. I am serving as the GC. Back before we started building, we were considering using another builder. At the time, we really wanted to have him build our house. After getting a few preliminary quotes (some that were submitted to him, some from subs that were sought out by me and submitted to me) I encountered many of the issues you mentioned in your post: major discrepancies with number$, preference for certain subs (one was a sub that didn't even bother submitting a formal quote... sent him an email with an overall total price and no breakdown of items), preference for a certain lumberyard which gives GCs a kickback, etc. My window quote from this aforementioned lumberyard came out to a $30,000 difference in price. Lumber and materials were almost a $50,000 difference. Long story short: we ended up going with another builder who was fine with us serving as GC and arranging our own subs. By the time we approached this builder we already had all our quotes lined up (HVAC, electrical, lumber, windows, foundation). Note: all the subs we went with were those whose quotes were submitted directly to us.)

We saved quite a bit of money because of this....let's just say it basically came down to us not being able to build the quality of house we wanted to build had we gone with Builder #1. In addition to the huge discrepancies with sub quotes, his labor quote was considerably higher, and he was far less experienced than Builder #2, who has about 30 years more experience and a rock solid reputation. Builder #1 was estimating at least 10 months til completion. Builder #2 said 7 months and has a very experienced crew.

HOWEVER, there are huge differences between your case and mine. I work for a family business and can take time off whenever I need to take care of GC responsibilities. I work 5 minutes from our build site. I live in a small town where all the subs I chose are guys that my builders have worked with before, would have chosen themselves, or at least know. Being a GC is a full-time job, and I wish many many atime I had just let my builders handle all of it. It's stressful. Do NOT even think you can take this on if you can't be there everyday, or at the drop of a hat if a question arises. Especially if you currently live or work in a different city than the area you are building. BIG mistake.

Not sure what others think, but I suggest getting your quotes from the subs of your choice, and approaching a builder who would be okay with using your subs but serving as your GC. You could handle the money end and have the bills run through you and just pay the builder/GC a flat fee or a agreed upon percentage for serving as your stand-in GC. Whatever the case, you need someone who will be physically present and handling things on a daily basis. You showing up 2-3 times a week is NOT gonna cut it...your subs will quickly figure out they're not being held accountable and will come and go as they please...which will end up costing you more in the end. Even if it's a good sub, when they get busy (and trust me, the good one's are always busy), someone's job gets pushed to the side and guess who's job that will be? The job where the GC is nonexistent and/or a non-present homeowner.

I think you are best off having the GC hire all the subs so there is no disputing who will supervise and take responsibility for the work. The subs need to work closely with the GC to determine just how things are supposed to be done and come together. GCs prefer subs they know and trust because it means a lot less work and risk.

The question is whether the GC is willing to work to get you a better price. This may not happen until you decide to get another GC to bid. Stick to your budget now, because there will be unexpected costs later.

I GC'd our house in 2008-2009. My job is 45 minutes from the site, but can be flexible for me to take long lunches, leave early or show up late. My Father-in-law built his house in another state and some other houses, but is not a GC. He came and stayed with us throughout most of the build. I'd call him a Site Manager, I answered questions, but he was there to make sure the materials came and could get some items on a moment's notice.

We tried builders, but none would follow our spec list. And I wasn't going to pay someone six figures to not follow directions. They couldn't get the window color right on quotes or the ceiling height correct (when it was on the plans).

Other than project management ability, I still tell Owner Builders that you must know what good work looks like from the trades, or you won't do a good job. You don't have to install any tile, but you must know the right way to do it and what it should look like when finished, and watch the sub while they do it to make sure it's done right.

Oh you poor thing. I am in the middle of the 2nd DIY build in the past two years. The first house was ours and the second house is my parents and only 1 mile away. First of all I am a stay at home mom who can be there all the time but I warn you it becomes exhausting work and headaches. You think it's easy to sign a contract, check on the work and then pay the contractor - oh no I can't explain but it never happens that way. Plus they want you there sometimes to answer quick questions right now about this or that and if you can't be there then it slows down construction. My husband works FT and every night for two years now goes to the house and does some of the work himself to also save money, he is burned out and we are 4 weeks away from being done with the 2nd house. It's very time consuming.

Also we almost went with a GC on the 2nd build but $$ again was the issue, so that is why I am doing this again for my parents. The GC also a good friend of ours only wanted to use his contractors and some were out of our budget so I went elsewhere and hired others. Every single contractor that I hired was a PAIN to work with. They did 2nd quality work. I should have listened and took the advise of the more expensive contractors. You do get what you pay for seriously it is true.

I wish you the best of luck in any decision you make.

yes she is correct too about contractors showing up late or not at all if you don't ride them to be there when you say so. also it is rare any contractor finishes on time when they say they will, always pad the calendar and your pocket book because NOTHING stays on budget no matter how hard you try.

get a third quote on your lumber, it is very important to be correct on quantities. I would honestly ask around your area for the best lumberyard to work with, nothing like a low ball quote and having them off by $5K like what happened on my parents house...

My DW and I were forced to become our own GC after our GC abandoned the job at about the 75% mark. What I can tell you about GC'ing is that it's like being a junior-high school teacher. With a couple of exceptions in the skilled trades, the subs are completely untrustworthy and require constant supervision. Absolutely anything they can get away with, they will. You'd be stunned. We actually wound up doing most of the work ourselves (with the help of a few family members) because we couldn't be on the job site constantly to stay on top of the subs.

The other thing you have to keep in mind is that as your own GC you're going to have to deal with all of the permit, inspection, and other government paperwork hassles. There's more to that than most people realize. For instance, one that surprised me is that in our city, after the job has been underway for a certain amount of time you have to write a letter to the city every 30 days in order to keep power turned on at the site, until you get your C.O. Ours got cut off once because I didn't know I had to do that.

"I guess I don't understand why he can't use my subs and still be GC."

My guess has to do with profit and liability. You are taking away some of his profit, while increasing his liablity. I wouldn't be willing to do that. I would not oversee and be liable for a project using subs that I don't normally work with, nor would I be willing to take that risk for less money.

If you don't have the time/knowledge to GC yourself, then I would negotiate prices with the builder or shop around.

Good luck!

This may be a really stupid question, but if you're building your own house, what is then the practical difference between being the builder and the GC? What does the builder do?

I am in the midst of my build right now, and this has been my experience. I was planning to GC my house but was counseled to get a builder by friends who had been the GC for their builds. As a compromise I hired a builder who was willing to do everything up to the dry-in and then let me hire out the subs for the rest of the job. I had worked with all of the finishing subs before and I was planning to do some work myself (electrical, painting, trim, some flooring) as my and my family have done extensive renovations in the past.

Things started out pretty rocky with the builder. He didn't follow the basement foundation plans (! I know, crazy, right?) which thankfully the inspector caught. This and a few other things had me thinking that I was going to be so glad to get rid of this guy once his part was up. Then, my subs started to get flaky. Bids came in at twice what we had paid for similar work in the past, two were no longer doing their trade due to the economy and others didn't get back to me. My builder was right there with quotes from his guys which were competitive, some higher, some much lower than bids I had received. And the best thing? Every issue that comes up with one of his subs? I tell him about it, or he tells me about it, and it gets resolved. For some of my subs it's a painful process every time to first get them to realize that I know that X is a problem and that they need to fix it. I'm young and not in the trade so a lot of people assume they're going to just blow me off. I only had to work through that with the builder once or twice, with shorter term contractors though once or twice adds up.

Doing the split GC thing has worked okay for us. There have been a few communication misses that set back the schedule, but I was planning on a much slower build anyway due to me doing some GCing and some of the work while working full time and teaching college online part time. Thankfully my parents live next door to the build so my dad can check in or talk to subs since he works from home occasionally.

Some of the downsides of this situation though is that I have to deal with the builder telling me how he would never do x or y if it was his build. He's a professional and obviously has his way of doing it. Sometimes it's great advice, sometimes is just crotchety moaning. In the end though I do trust him to do good work, and he will do what I ask so long as I make it clear that I understand what I'm asking for and that I'm sure of my choice. Getting to that point of knowing that about your builder though is tough. This guy was recommended to me through my brother who has worked construction before and now works in a cabinet shop often building cabinets for my builder's homes.

Personally I'm very thankful that I didn't attempt to GC the entire house. It would have been an expensive, long, painful process that would have taken all the joy out of the new house process. I enjoy managing what I am managing, and I love getting to do actual work on the house. I loved having the freedom to buy every fixture / appliance / whatever ahead of time and make the changes necessary to accommodate them. While it hasn't been perfect, so far this situation is working out as well as I hoped it would.

This may be a really stupid question, but if you're building your own house, what is then the practical difference between being the builder and the GC? What does the builder do?

My guess is that a builder can be one that owns a large well known company and builds many homes and a GC can be on a much smaller scale overseeing the project. However when you build yourself you can call it what you like. We were the builder, the GC, the flooring guys, the finished plumber etc etc... When I think builder I think more expensive large scale and GC a one man show that oversees everything.

Thanks for everyone's advice/input. My wife and I met with our builder this past wknd and had a long conversation about the build. We again emphasized that we were on a budget and some of my subs were considerably lower than his. Obviously, he was tacking in some profit via the subs. I reassured him that mhy subs were solid guys and very meticulous, but can still understand his apprehension.

We basically agreed to split the subs. I'll likely hire the excavation/site prep sub, electrician and heating/plumbing and he will take care of drywall, insulation, painters. There are a couple other subs like tile guys and masonry and I've been getting quotes from them as well.

He will provide a cost on labor + 10% markup, which he will apply to the lumber yard material cost. This, in his words, covers the cost of his overhead. He agreed that he would still act as GC, but in realty, is just another sub at this point. The bank will also see him as a sub for the construction loan. I did reiterate that I really need someone to handle all the subs on a daily basis since I couldn't be there every day. He was ok with that. Overall, I think we're all feeling more comfortable. Obviously, it's not exactly the way he wants it, but he is more used to people essentially writing him a blank check and having their house built, whereas we are on a fairly strict budget and need to save money, without sacrificing quality.