LOL! Your situation is so similiar to mine that I thought I had written it!

I just got back from a meeting with my attorney who said exactly the same thing. My builder is just like yours and I feel about him the way you feel about yours. He's a good guy and a great builder, BUT he is a builder, not an attorney and his standard contract is a bit too generic for my attorney's comfort.

What he advised me to do is to take a look at the AIA and BIA construction contracts for the specific wording in the items that bother me. For example - cost overruns. Then he told me to put together a list of the materials that I expect to see in the finished house with as much detail and specificity as I can. For example - I want a specific front door package that I've already picked out, so I would include the door model number, color and describe exactly how I want it installed. He told me to do the same thing with expected finishes, i.e., "baseboard to be 5" wide poplar, painted white, eggshell finish".

He told me to go room by room and put in all the details I can. Then we submit this list to the builder, who then either agrees to it as it is by signing off on it, or re-works his "numbers" and give us a new bottom line number.
Anything that I haven't picked out yet gets an allowance ans the contract says "To be chosen by the buyer". Then there is wording that all changes to matterials or finishes must be approved in writing by both the buyer and the contractor and no substitutions can be made without the buyer's written permission.

I am very uneasy about things in the estimate labeled "Materials" if there is not a specific list of what that included. Although I know he's always making sure I get the most for my money and he's as honest as the day is long, I feel like you do - it's my money and I need to protect my own interests.

It may be awkward initially when I bring this legal stuff up to him, but if he's a businessman, he'll understand that I'm not saying he's not honest, I'm just doing my best to be perfectly clear in my expectations and avoid future unpleasantness.

But I do understand exactly where you're coming from on this. Using a smaller, custom builder sometimes means more "informality" than using one of the big, national builders who have teams of attorneys to write their contracts. But in the end, you'll both sleep better at night knowing both you and your builder are equally protected and both of you knows exactly what is expected.

What do you care more about, protecting hundreds of thousands of dollars that you have worked hard for (or will work hard for to pay off the mortgage) or protecting the feelings of some builder you don't really know? You should both be fair, but the contract should protect you as well as him.

Contracts should always be negotiated. "Argue" is not the right word or attitude. Remember, if it isn't in the contract it doesn't exist. If you care about it, it should be in the contract. What happens when the white paint you specified for the trim ends up being Walmart and not Benjamin Moore? Of they do it in satin instead of semi-gloss?

Read some of the posts here to learn where things often go wrong:
- allowances
- completion date
- issues with subs
- cost overruns
Etc.

Make sure the contract is VERY clear. Mentally go through all the "what ifs". What if you change your mind and want a different tile? How will it be charged? How will you be charged for things you decide to add later (e.g., crown molding).

How are the payments broken out? Do the payments cooincide with percentage of work actually complete? Builder contracts are notoriously front weighted. If you haven't yet, get the banks disbursement schedule and make sure the contract does not pay sooner than the bank allows. If the contracts says the builder gets 7% when the foundation is complete, and the bank says 4%, YOU have to come up with the difference.

If you are so afraid of the builder that you won't negotiate a contract then you should just buy a house and not build one.

Also, PLEASE make sure all disbursements go through you only. The builder SHOULD NOT be giving a request to the bank for money. This is how the builder gets ahead of the bank (where the house is only 30% done but the builder has been paid 50%, for example). You do not want this. You want to always be in a situation where if the builder walks (or dies, get injured so he can't continue, has a heart attack, etc.) you will be protected. The builder should give the request to you and you should verify the work looks complete (I'm not saying do an inspection, just make sure the furnace is actually on-site and installed if you are paying for it). Then give it to the bank and they will send out their inspector (who inspects that it is complete, not that it is done well, by the way).

Oh, and make sure there is nothing in there forbidding you from having a private inspector look at the house.

Sorry this is so stream of conciousness, but I'm in a hurry.

Yes, we negotiated our contract...the arguing came after the contract was signed (mostly a joke!)!!!

Anyway, try not to immediately think that a negotiation is a contentious event. It is simply a function of a business transaction. I have always thought that a homeowner who negotiates a contract (even if it is only one very small part of the contract) sets a proper tone for the building relationship. It shows that you are intelligent and diligent individuals who demand equal standing in the relationship. I think that homeowners who accept whatever is given to them in the contract will, generally, accept whatever is given to them during the build. I'm surprised that your attorney would give you the advice that you are paying him/her for, and you would be concerned about starting off on the wrong foot.

I'd be honest with the builder. Just tell him that the attorney who reviewed the contract had some concerns, outline the said areas that the attorney was concerned didn't provide enough protection for you (I feel this is an important point...give examples), and then give him a chance to respond- preferably through his attorney as well.

If he is a small, custom builder then you will surely not be the first client to say something to him about the contract...

Thanks! And you're right - I don't want to argue anything, just negotiate. THere are only a few minor things anyway, so I will use the exact wording "my attorney looked over the contract, and has some concerns, I'd just like to change some of the wording to make things more clear and to make sure we are both protected under this contract, etc"...

THe hundreds of thousands of dollars is exactly what worries me! We DID work hard for that!

You should absolutely negotiate the contract. You are investing at least $100 psf and probably 9 months or longer for the build out so you want to be sure you are covered in case of over runs, delays (there are always delays) and anything else that comes up.

My wife drafts contracts for commercial builds and they have all sorts of out clauses with the GC's and penalties if they are late. Not that her company does not still end up with buildings not opening in time for the marketing people though.

Protect your invest from the start since you will not be able to renegoiate later. Once it's signed the contract will control everything.

We are doing a cost + 10% contract with a minimum of $20K for the builder. My wife has picked almost every detail down to the wall colors for each room, the wall lights for the bathrooms, the light fixtures for each room and even the faucets.

We are still going back and forth with the builder we like best regarding a budget/cost breakdown to submit to the bank. It's been a few days of back and forth. The builder put in $10K for the landscaping line item so my wife took that job out of the contract totally since we found a well known landscaper (works in our subdivision all the time) who can do the job for $5,000. The GC was not upset about losing the 10% on that line item (but my wife could care less if the GC was upset). We also got two bids for the HVAC work that are $3,000 less than what was in the GC estimate. My wife changed that line item amount to reflect the lower pricing. Just know that if you put $10,000 in landscaping in your budget (even for cost + contracts) your GC will pick a sub that will do the job for $10,000 and not $8,000. There is no incentive in a cost + contract to shop for the best price and many GC's use the same subs over and over. This can be a good thing if the subs are willing to work within a budget but not so good if the subs don't budge.

My wife has been into construction for a while so she is of the opinion that a sub will work for the price in the budget (reasonable profit and overhead included) or they will not get the job at all.

I'm hoping this GC does not walk over the negotiations. My wife plays hard ball. We have a set budget and if we go over it will not be for landscaping or HVAC work.

We will control the draws and only submit after we recieve lien waivers for each part of the job and receipts (cost plus contract). As stated above, make sure you do not let the builder get ahead of you in payments i.e., 50% of work done but GC has 75% of money. This happens more than you can imagine and many people get taken for their money and the job is not complete. But they are left holding the bag to come up with the money to finish the house and to pay back the bank! My wife had to sue a bank over that - giving a GC money for work that was not done. The bank settled and the homeowner got back 100% of the money AND the interest on...

Tell us more about your contract. Is it a fixed price, cost-plus?

We're negotiating a fixed-price contract, so any changes in selections/specs after we sign will require a Change Order. Meaning we pay a "penalty" for that. Sometimes selections are no longer available, so you have to make a change; other times you just change your mind. Therefore, we're in a dilemma about how specific to be on specifying things in our contract.

I always heard to be specific in the contract down to model number, etc. But then there's that change order problem. So, we're thinking of describing things generally, then allowancing everything (in accordance with what our selections actually cost) to avoid change orders. The contract will indicate that the owners make all the selections.

Ex: "Siding: All sides shall be all new brick set in a running bond pattern, with trim per plan."

Ex: "Master tub/shower: acrylic one-piece module with manufacturer-installed grab bars. Installed per manufacturer's recommendations. No holes may be cut in module."

Don't know if our approach is correct or not.

If you are lucky and have everything go well in your build like your friend, it won't matter. If you are unlucky and have a problem, then you will be very glad that you listened to your lawyer and ended up with a contract that was FAIR to both you and the builder. Each build is different. I bet that serious problems arise in less than 10% of new construction, but if you are one of the 10% with problems, then it's 100% for you. Just because your friend didn't have any problems doesn't mean that you won't have any either. A house is a huge investment and I know that I would want to protect it with a good contract. Of course your builder would start out with a contract that is favorable to him. That doesn't mean it should not, and cannot, be changed.