I want to clarify the original bid from the builder was in Jan of this year. Then when we received the blueprints a couple weeks ago, he jacked it up 50%.

You got a ballpark estimate, not a bid. And, it's not at all unusual to have a custom floor plan be far more expensive than the ballpark the builder is used to building in. If you want to contain costs, built something he's built before that's simple.

Yes, bid your plans out. But, be sure you are doing it correctly. You need to specify every detail down to the tile brand and style to the exact plumbing fixtures. Don't be surprised if everyone else comes back even more expensive than your first guy. That's usually the way sticker shock works. You think, "No way is it that expensive!" and by the time you get more bids, the original looks like a real bargain.

Yes, a ballpark estimate is very different than a final bid.

Talk to the contractor let him know your concerns and then get more bids.

Any good contractor will understand the situation.

The house didn't change though and he submitted the first plan to the lumber company and other subs. We already caught a few errors that WE had to point out to him and he just was like oh and fixed them (such as the original being double the actual cost of siding and windows being more than we personally bided out without him knowing) . We are doing all interior finishes ourselves (fixtures lighting flooring etc)

Another thing we noticed this morning is he raised his % fee. Didn't discuss it with us. This is a cost plus fee and he just raised it a percentage and didn't tell us.

Thanks for your replies!

First of all, the ground rules changed when 1) you got the official proposal and 2) the effective date of the proposal changed. This is not unusual. Get competitive bids and evaluate them. Why the builder prices how be prices are none of your "business". Only the bottom line price. Get another quote at the same specs and evaluate which is better. Beware, though, before the build is complete, you WILL have numerous upcharges and change orders that will end of costing you thousands (or tens of Ks). Most times, builders will gouge you on these other things after the contract is signed. It will happen, and there's little you can do about it.

If you truly did not change much from when you got your original estimate then one of two things happened. He either intentionaly "estimated" low to get the job, or did a very poor job estimating in the first place. There is no excuse for raising the percentage without telling you. I agree with what was previously posted. You need to be 100% specific with the details to get an accurate bid. After shopping out the job to a few builders myself I learned that nearly everything I wanted was an upcharge. I eventually decided to GC myself since I had already done half of the leg work for them anyways. Glad I did.

rethree- We are paying all invoice plus a % to the GC. He has to show us all the bids/invoices. That is our setup and that we will do all floors/baths/fixtures

chad- I think you are exactly right. He gave us a figure too good to be true the first bid. The lumber doubled in a matter of 3 weeks. I don't see how that is possible, I think he originally priced it himself because only gave us the estimate the last pricing from the lumber company. Good on you for being your own GC! Wish we were closer to do so. We also learned this does not even included the finished basement even though he originally said it did!!

Changing the fee % is something he should have talked to you about before surprising you. He knows he owes you an apology for that.

Otherwise what you call the price is actually a budget and it is normal for it to rise as the construction information and sub bids are finalized. But 50% in two months is too high. It's probably time to show the drawings to another builder if you own them otherwise you've got a problem.

The original builder shouldn't be at all surprised or offended that you are not willing to go forward unless you promised him the job at whatever it might cost.

If you only just presented him with the final blueprints, then he just now gave you the actual bid. Whatever drawings or prints he gave an initial price on weren't the same plans, and had a incomplete level of detail. Only someone who has seen both sets of plans (and knows how to read them and develop a bid based on them) can really give you the answer. Maybe take both sets to another builder, pay him a consulting fee, and have this third party explain the possible reasons for the discrepancy to you.
I don't think any of us have the information we need to condemn your contractor, or to defend him.
Casey

Pure conjecture....but my guess is that he needed your business in January and currently, he does not. Maybe he just landed a big job?

Your bid should be lower than that of two years ago. People need jobs and I'm willing to bet that his subs are willing to work for less than they would two years ago. Yes, the price of some things have gone up-lumber for one, but labor should be down. I would get some bids from other contractors.

Shoelvr, Anyway, like someone pointed out, he may have landed another job and be near maxed out. I would raise the price too. Its the way the business works. Be aware though that, while Invoice plus % seems like a way for the homeowner to keep a tight lid on excesses, the builders are expert at playing shell games. Kickbacks from suppliers and all sorts of things. Its a little talked about practice except among the builders and suppliers themselves. One way or another, you will be paying the builder whatever profit he wants... whether you like it or not.

he raised his % fee. Didn't discuss it with us. This is a cost plus fee and he just raised it a percentage and didn't tell us

OK, he didn't tell you. He put it in writing!

I get lots of requests for estimates with no plans, no specifications. Just talk. Don't try holding me to that.

Now that you have real plans and specs, by all means shop them around. You're not bound to anything until it's in writing.

Thanks all for the replies. We severed ties with him yesterday. He said he only works with one lumber company and denied changing his % fee saying he recently had a computer virus and that is what changed it. LMAO! Anyway, moving on thank you for letting me vent here and for all your insight. I know the prices go up and there will be extras. My Mom has a builder friend with a boat named 'Upgrades'.

Another thing so you don't think I'm being -- about this..

He did admit the lumber company priced things out for a category 5 hurricane area when we are really in category 2. For the midwest they priced out category 5. He said it would decrease the lumber by a lot. My question is why did he submit that bid to us with the home priced out as a category 5 when the house is being built in the Midwest? $$$$ Isn't the reason we hire a GC is to watch these things?

Sounds like you did the right thing.

He sounds like the typical "lowballer", get the job and then find a million ways to up the price.

It hurts all the good contractors but happens to be a part of the business.

He sounds like the typical "lowballer"

I once gave an executive a quote on a complicated reno/addition. He had been so classy and businesslike till he heard my price and timeline. The mask dropped: "Sh**!! No way man!"

A couple months later he called me as if nothing had happened, wondering when I could start.

"Sorry, I'm so busy now I don't know when I could get to it."

Please make sure to include as many specifics as possible as you get bids/quotes from builders, it's even more important for people wanting to do cost plus on a budget. The more you let the potential builder know, the better they can estimate the costs and have bids get closer to the actuals.

Also, the more details you provide to the candidate, the more you'll get a feel for their level of detail. If their quote/bid comes back ignoring your detailed specs, you know that the build will be a nightmare, with every detail being re-done. It's what ultimately pushed us to OB'ing. If you can't get my specs worked into the quote, how can I expect you to get it right made out of wood, steel and glass?

Finally, if you've already bid out aspects of the job on your own, why aren't you considering being your own GC? And maybe hiring a builder to do some oversight for you? Especially during framing and rough in stages?

And be careful of the cost plus contracts. No matter how specific you are (we had a 20 page bid sheet, detailing all flooring, windows, walls, trim, paint, built-in's, plumbing, roofing, brick, stone, hand forged iron work) if the builder does not do his job your price just went up, PLUS the % he gets, even though he didn't do HIS job.

Our builder did this, couldn't even be bothered to call the supply companies to get our pricing, therefore the house ended up being underbid by $500k!!! Which meant his fees went up quite a bit.

It took a long 3 year legal battle to rectify. My best advice would be to have a specific bid sheet, and make him initial & date each item and date and initial the cover page and mark it as the Addendum to the contract.

That's where we went wrong, it was difficult to prove that we gave him the spec's when he never initialed them. We won in the end, but what a mess.

So make sure that your new builder initials and dates each item to say that "Yes, this price included this".

Better yet, do a fixed price but do all your leg work and don't make any changes. That's the only way I would build again.

Thank you for the advice, much appreciated. I like the idea on having the builder initial and date items.

bdpeck- would love to GC on our own, but we are out of state. I have thought about renting in the area during that time, but with family obligations I would still need to travel back home once a week at least.

We've built second homes out of state. It's not easy to find a decent builder when you don't know anyone in the area - residents or subs.

Seeing that your guy's guestimate was so far off, I would be hesitant to use him. He should be able to give you a closer ballpark than that. Based on your plans/finishes and his recent building experiences.

I don't have a clue how Cat 5 vs. Cat 2 would impact lumber costs. 2x6's instead of 2x4's? Or 2x8's? I think typical hurricane zone building regulations are for Cat 3 hurricanes - 120 or 130 mph, if I remember correctly. Hurricane rated windows would certainly add substantially. Sounds fishy to me.

"Sounds fishy to me."

Exactly!

"Our builder quoted us an original price as an estimate ..."

You never had a bid to start with, you had an estimate.

Sort of like offering to quit claim the Brooklyn Bridge to you.

You can always scale back on thinks that can easily be upgraded later to shave costs.

Getting multiple real bids would also be a very good idea.

"Estimates" are worth the paper they are not printed on.

time to GC yourself.. you should save enough to be back on tract with your budget