Receiving invoices/receipts

11 years ago

My husband and I are just starting our new build. We have a fixed price contract. There are already several areas where we know we're going to go over budget (i.e. upgrading fireplaces, etc.). My question is, should we be receiving some type of invoice/receipt for these overages? As of now, he's just giving us a number (i.e. "to upgrade to the fireplace you want, it's an extra $3000"). I guess we're just kind of confused about how this should work. This process is starting to make us feel like we're at the mercy of our builder. We think he's a trustworthy guy, but don't want to be taken for a ride. Can someone explain to us exactly how this process should work. What type of invoices should we be receiving, if any?

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Comments (6)

brickeyee
11 years ago
You need a written change order that he then prices and also signs.
User
11 years ago
Change order procedures are written into your contract. And yes, to a certain extent, if you want something different than you agreed upon in the contract, you are at the mercy of your builder. He is not obligated to look for the lowest price for your upgrade, and indeed may just look for the most expedient supplier which he has used in the past and which he has confidence in. It's better to stay on schedule with a higher priced product than to wait six weeks for a cheaper special order. Also, the way the change order process occurs, you undoubtedly also incur the 20% markup, plus a change order fee on top of the actual labor and materials to be changed. That can take that $400 toilet and make it $600 extra by the time the change order is done. So, think VERY VERY carefully about changing anything that is in your contract and reserve the change orders only for items that are not easily upgraded after you own the title to the house.
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Honestly, we just don't have that much stuff. I keep a hanging file of booklets. DH has a separate file on all of his office equiptment. I do staple a copy of the receipt. New receipts these days fade within a year, so I just make a quick copy, since most items like a fridge are part of our home in the office deduction anyway. I never buy additional warrenties and I just call my local fix-it guy if something goes wrong anyway. On my new fridge, Whirlpool will take 2-3 weeks to get someone out to the house. I'd rather pay him $45 an hour and since I trust him, I'm more satisfied with his level of work. Like clink, I don't keep the manuals on the small stuff. Our TV is 20 years old. My stove is 60 years old. I keep my sewing machine manuals handy in my sewing area. Once I've put together the lamp or whatever item it is and make sure it works properly, out the stuff goes. I make sure I purchase items from stores with good return policies. Many of our stores just tell you to bring the defective item back and they either give you a refund or replace it with a similar item. I probably only get in that file every couple of years. One tip I've read here several times is to pull off the foreign language part of the booklet. I don't need French, Japanese or Spanish taking up space. I also just thumb through the file before putting it back and pitch anything not needed. This would fall under talley's chore clutter for me. Gloria
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I am sorry to say that your story is very much like the ones we are trying to educate homeowners about. First and foremost, if he did not provide you with an allowance of the cost of the tile in his budget, then you should not be obligated to pay. The contractor discount is not the issue -- it's about his allowances. If the contract says "furnish and install at $1,540 then that is what you should pay. If there is other language in the contract that allows for changes, then he may have the right to charge extra -- though totally unethical if you did not approve those extra charges. The extra $650 for the "tile membrane" should also be included in the install price. If he did not add it in his original quote but is a needed part of the project, then he should eat that. Overall, your expectations are reasonable. However, if your contract allows the contractor to bill for extras WITHOUT your approval, then you might be liable for the additional charges. If nothing is stated in the contract, it could go either way. I also recommend asking for receipts of additional materials he purchased without your approval. Definitely check with the tile flooring forum for the particulars. Finally, when we price out a job, small or large, we provide one fixed price. Period. The project includes installation and materials. If we miss materials, shame on us. Replacing the entire subfloor would depend on the age, tile, etc. Those are unknowns for any contractor until the area is exposed. When the types of changes you describe are required, we will issue a "change order" for final approval and signature. Nothing is done until the homeowner signs off. Here is a link that might be useful: Hafer Construction, Inc.
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Hey Christy! Glad to hear your project is underway. Sophie Wheeler is on the right vein for taking a hard look at your project right now. With all of the changes in the market from Harvey to steel costs shooting up with new tariffs in place everything has gone up in price all the way down to the nails. So what you had a year ago is critically off course today, so a meager 10% contingency is going to get fully depleted before you get to the end. Even a 10% addition for a total of 20% will likely not be sufficient. I know you are building your dream, but you should consider taking a hard look at the scope of work and either A) find additioanl funds to increase your budget, or B) table some big ticket items in the scope that can be done once you have been able to comfortably replinish your funds...Since you are just at framing, another idea would be to hire an outside "consultant" if your builder has hit a wall and is having a hard time seeing an alternative solution for cost cutting on the project. We did it back in the corporate environment, so I see no reason why you could not use this tactic here. We work on contact thus would honor our original price, but also have a built-in contingency because we expect overages and in a case like this would probably pull from the contingency. Best of luck! it is a tough market out there!
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Shmomey
11 years ago
I feel ya.. on the invoices. We are at cost plus . I too feel like we are at the mercy of the builder. The builder lists out the cost of each vendor item on a spread sheet to make a draw. But what is to stop him from adding $100 or $200 there and here etc... without an actual comparision of the vendor reciept.. I get a little paranoid. I think I will ask for a copy of the vendor bills and see what response I get...
loafer80
11 years ago
You should get an invoice from the GCÃ¯Â¿Â½s supplier for the new fireplace, then a change order form showing the change cost, markup and total cost. Also ask for breakdowns for each item, cost of new fireplace, cost to change framing if any, cost for change in gas line fitting, and check to see if you get any credits. like bigger fireplace will need less surrounding tile?
Even for a fixed price contract, you should always ask for breakdowns and know where your money goes. For example 1st draw after foundation completion, ask for breakdown of foundation concrete placing and formwork cost, excavation cost, backfilling cost, etc.
pbx2_gw
11 years ago
To piggy back on the OP's question: do the GC/Builder work on the premise that we can reconfigure the allowances to cover for the change order?

Or do they want to money up front & work out the netting of the allowances later on?
lindsay221
Original Author
11 years ago
Thanks, everyone. Our builder does not charge for change orders. We just pay the difference of what the item & any additional labor costs. But like loafer mentioned, we would definitely like to know where our money is going. As of now, we do not know numerical amounts of anything (i.e. cost of framing, cost of concrete, etc.). For example, many people on the forum talk about how much they're spending for windows. We don't know what our total window cost is. We sat down with the window rep and made some changes, so we know going from "x" window to "z" window will cost $1000. I don't want to put our builder in an awkward spot asking for dollar amounts, but I would like to know where our money is going. I can see being entitled to such information with a cost plus contract, but wasn't sure if the same is true for a fixed price contract. For those of you with fixed price contracts, how did this process work for you? Did you know fully where your money was going? Did you get invoices?

Receiving invoices/receipts

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brickeyee

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Receiving invoices/receipts

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brickeyee

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