'marketing fee' in building contract ???
smlindberg
14 years ago
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swampwiz
14 years agolast modified: 9 years agosrercrcr
14 years agolast modified: 9 years agoRelated Discussions
Contracting to build with our money
Comments (5)Yes, YOU should own the lot. Ten percent at the end is not enough. GC's are famous for never getting the punch list completed; you need a bigger incentive. We bought the land then hired a GC. We paid in draws as we received lein releases on work completed. The contract set up the sequence of building and percentages due as work was done. This is the same way a bank would handle payouts, but you aren't paying the bank fees....See MoreCustom Home Build contract cancellation too costly
Comments (19)Good luck to you. At this point you should still take your contract to an atty for review. If you're going to continue with your build you need to understand what the scope of your contract includes, including timeline issues. If you're going to bail on this build, you also should find out what your legal obligation is re this contract. Understand that obtaining financing, even if you have enough liquid assets to build the whole house without financing, is a tough business right now. You should be prepared to look at more than one bank/credit union/ investment brokerage. In the end we ended up financing our new build through an arm of our investment brokerage. After all the hoops etc it just made more sense for us. And, our land, which we owned free and clear, did not count as part of our down payment, and the appraisal for new construction didn't come up to the cost of our build. So in the end we'll have 40% into our build. We could have compromised on a lot of things we wanted, or we could have bought existing, and gotten an 80% mortgage. Point is you need to be persistent in getting financing, and you need to have an attorney review your contract....See MoreWise ways to align incentives in building contracts?
Comments (17)The only reason to not use a GMP with a Cost Plus Fee contract is if your construction documents are not complete and you don't want to wait until they are. If you can't decide on the tile now, instead of listing the tile as an Allowance, put a tile unit cost in the contract or agree to provide it yourself. All labor should be in the contract price. It doesn't matter how often any of these contract options are used; you need to discover what the contractors you like have used. Even a plain Cost-Plus-Fee contract requires a certain level of project management expertise from both the contractor and the owner (or architect) so you don't want to force a contractor to use a type he has never used before. I would be surprised if any of the local contractors have actually used a Cost Plus Fee contract the way it was originally intended to be used. So, interview some contractors and see how they manage their projects and how they derive their fee. The fee is very important. Here is a description of the advantages of a GMP contract. Here is a concise description of construction contracts....See MoreFixed-price contract has Contractor's Fee % as well?
Comments (42)Vegiegardnr- Did you talk to you flooring person about thier hours? Not that it really should need to be any of your concern what it takes to run their business as long as you get the finished product that you are paying for (and of a reasonable quality), but there probably is a lot more to it than you seem to assume. You saw work from 10:30 -4:30 and decided that was lazy. There could have been other work that is necessary to their job that was happening during those "lazy off hours": Meeting other potential clients for quoting work, billing and paperwork for jobs done, billing and paperwork to pay supplier accounts, getting quotes or filling out forms for insurance and/or licensing, filling out forms for employees or past employees that need employment verifications for loans/apartment renting/new jobs, picking up materials for jobs or tool expendables, servicing of their truck or equipment that they use to do the work, researching and/or buying a new piece of equipment, going to a class about a new floor surfacing product, etc.. Based on how you present yourself here it seems you don't view contractors as human beings that "just might" be working hard to try to do good work. There are bad guys out there in all fields of work, but most contractors do not deserve the assumption that they are all just trying to find ways to overcharge and be lazy. Or maybe in your experience those are the only ones you've worked with - because as others have pointed out, contractors look at their potential clients in terms of risk of loss/stress/hassle/not getting paid/not getting sued, and the good self respecting contractors who have a good reputation and referral base don't need to take on risky/unpleasant work and probably steer clear of working with someone with those attitudes. Maybe next time - still protect yourself with reasonable due diligence, but treat the contractor as a human, ask (a reasonable amount) of polite and non judgemental questions if you don't understand where charges come from or why things cost what they do. Maybe then you'll have a better experience with your next contractor and start to shift your views away from assuming they're all bad....See Morecreek_side
14 years agolast modified: 9 years agodavid_cary
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14 years agolast modified: 9 years agoemilynewhome
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