Builder Charging Flat Fee Question
Beth LaPenna
11 years ago
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Comments (20)
david_cary
11 years agoUser
11 years agoRelated Discussions
Builder's fee
Comments (15)@hawkeye2256 I'd be careful in signing that contract if you truly don't understand exactly what you are being charged for. It does not sound like a lump sum contract from you last post. I am a licensed General Contractor. There are (3) main types of contracts out there. 1. Lump Sum (Or Fixed-Price) Meaning you are agreeing to pay that General total amount of "X" for your project. With a lump sum the GC can do anything he wants to reduce costs as long as you receive everything on your drawings and in your contract. 2. Negotiated Fee (Or Cost-Plus) Meaning you pay an additional "x" % on total of the material and labor costs. A Builder's Fee is not usually the same as his markup, if you are paying 15% on top of materials, labor, and builder's fee. A builder's fee is the labor he puts into managing your project, the administration, scheduling the subcontractors, etc. For instance, I have General Conditions (i.e. site supervision, project administration, temporary toilets - everything it takes to run the job excluding the people building the project and the material), than I have overhead ( which should be the same as a builder's fee) which is his cost to keep the lights on in his office, to keep his insurance and bond up, etc (to keep his company running - that doesn't not come out of profit) this is normally called "Overhead"; And lastly there is profit, just like you pay everytime you buy toothpaste, or a latte. Every business needs to be making more money than it puts out, or it wont be around very long. 3. Lastly, there is a "Not-To-Exceed" Contract, which is what yours sounds like. Typically this is a cap that a GC will put on the costs of a job. I've never done one for a ground up house or major remodel. Thats pretty risky. Especially with the cost plus aspect of it too. A not to exceed wont be me telling you it wont cost more than $500k to build your house period. And then if it comes in at $450k you keep the remaining $50k. If it costs $510k, the builder eats it. (Same with a lump sum bid, except if the builder charges you $500k and only spends $300k, he keeps the remaining $200k.) I hope you sought legal advice or advice from an outside contractor. Well, I hope this was educational. Let me know if you have any questions. I truly hope your project is successful. N.K. Hero Construction Co....See MoreFlat fee MSL sites????
Comments (6)Yes, we used flatfeelisting.com, and was satisfied with the results. You set it up yourself (pics, description) and they put it on the MLS. We used it to sell a house that was 5 hours away. We had a combo lock on the door and if anyone called us directly, we advised them to contact any local realtor to show it. This worked well except for one time when a very rude man said he was sitting in the driveway and wanted to see the house NOW and didn't not want to fool with a realtor. I didn't lose sleep over him. You do need to be available by phone to give agents permission to show the house. This was our only problem. I had just started a new full time job, and expressed to our group (3 couples) that I could not take the phone calls. Three others said they would. Well guess who ended up taking all the phone calls..... I would recommend setting up a google voice number so you don't have to give out your home phone number. Plus you can have it try to find you on your cell etc, and you can screen the calls. I kept track of the realtors that showed the houses, and eventually referred inquires to them. We paid the standard 3% to the buyers agent. We are going to be selling a house next year and I may use this service again. This house is only 1/2 hour away, so I may show it myself if the situation comes up....See MoreListing opinions needed - FSBO w/Flat fee MLS
Comments (36)Photos tell story about a house. Very likely your house is not like that yet your photos loudly convey this property is suffocating, cluttered, lacking of regular maintenance and needs tons of work. Average buyers tend not want to be bothered seeing a dreary property if there are others available. Savvy buyers will treat it as an opportunity to get a bargain as these photos say the seller does not have professional acumen. In essence, FSBO is the owner does the job a realtor usually performs in order to earn the commission. Without realtors' professional knowledge, experience, network and supporting infrastructures, the owner has to work a lot harder to compete with other houses. It would be good to give critical thinking of the comments you received from "fellow realtors" before passing them along. There are many top notch realtors on this forum (NC is one of them), I bet none of them would have this type of silly opinions....See MoreKitchen designer: hourly rate or flat fee?
Comments (5)This is a perennial question. I'm a KD and I sell cabinets. Nowadays (more in the past year or so) I also do freelance design and drafting (heavy on the drafting) for other professionals (not homeowners). Here's a bit of rambling- bit of a summation at the end if you want to skip the drivel. When I first went out on my own I expected to be emphasize just design, not sell cabinets but quickly gave that up for a lot of reasons. In this region the business model for selling cabinets is "the design is included". There are those, myself included, who require a retainer which is credited toward the cabinet purchase. But the design fee as such does not change. So how does that work for the consumer? Depends. First let me say that It can be very difficult to find a good designer-of any kind using any business model. I find that many cabinet sales designers do minimal drawings (which is where my other work comes from) often lacking in detail. Many do not work with more than the walls that the cabinets are on (don't even ask my opinion of that). Is there incentive to charge more? I don't think so, making budget is always an issue. Don't make the budget you don't make the sale. BUT I know that some KDs will up the charge if things drag on-of course that is well within the clients control. Will a GOOD designer do minimal work-by definition NO, pride comes into play. Still, I can only speak for myself and I don't really care how long it takes so long as we move forward not backward. Some take less, some take more but it's all pretty much built around the best possible project for the budget. I don't think I'm alone in that. Freelance kitchen designers who does not sell cabinets can be difficult to find and there is no guarantee they are good. The good ones often charge between $75 and $130 per hour which adds up quickly. That can quickly reach several thousand dollars, especially if there are other spaces involved. Drawings alone can be a couple of thousand for a complete set on a full reno. Flat fee- I do flat fee work for some of my pro clients but in those cases: drafting is the major component, there is a clear idea of the scope of work, how it will proceed, AND they are regular repeat clients (so it comes out in the wash) Alternatively "Some" architects do well with kitchens, as do some interior designers. but many not so much. Very few are familiar with all the possible cabinet specs. Rarely for manufactured brands. Most often they are leaving the fine details of the cabinets to the "cabinet person". In either case the net cost is higher since very few cabinet dealers or makers will give an adequate discount for coming in with plans drawn. They still have to write an order, double check it with the client, check it with the factory acknowledgement, assume delivery and be responsible for it all. Professional certification may or may not help in selection. II personally don't put any stock in it on it's own. Summary-if you are a pessimist thinking that everyone is likely to be out to overcharge you, if you have a hard time trusting. No professional will solve it for you. That is always a relationship of trust. This forum-if you know what you want and are willing to invest the time then using the good folks here on the forum may be your best option. Realize it will take longer and that the "design" you end up with is incomplete. Someone still has to turn it into an order of some sort and do final drawings. That is likely easier taken care of with a custom builder but again YMMV. A good KD that sells cabinets. This can be the best value for the average consumer is to find a really good KD that sells cabinets, knows something about space/structure/building, supplies thorough drawings, and is capable of keeping you on budget. You will find none selling low end brands and only a few selling base semi custom. It gets to a question of being lucky. Region matters but that too has no clear indicator. Shop for the designer NOT the cabinet. Most people work the other way and many suffer for it. Architect- will always supply good drawings, that's what they do. I know two who are very good with kitchens, many without a clue. A good one will be great with space. Some architects have a good KD they work with all the time. It would be wise to interview both. Interior designer- I know fewer of those that are good with kitchens. They should be good with finishes, may or may not care what you like. Some are paid to be tastemakers. Beware of the artist/houseperson/SIL... with taste. Many of the better ones have a good KD in their pocket and some are also excellent with space making them a great choice. Design Build firm or person- the biggest advantage is one stop shopping. Again all can be hit or miss. The best are pricey. They too will have a cabinet person they deal with- be sure to interview both up front. (essential) A freelance KD- find one, shop the same way you would for one who sells cabinets. Whichever way you go always - have a budget, supply it honestly up front, and always, always shop for a person not a product....See Morerobin0919
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