Mightyanvil, Thank you for the contract breakdowns, I really appreciate that. That is definately part of what I was looking for, ways to create a win/win for us and our eventual builder. We have someone we are interested in using but have not talked specific contracts yet. There seems to be some perception that 1. I am not interested in quality and 2. that I don't realize the potential costs of quality and the unforseen. I appreciate that you are trying to warn me -thanks. I do understand these things and am trying to be prepared for them. What I was trying to get at is that somewhere out there there is a good contractor who will look at a project and take into account our site, our materials choices, our plan, etc. and come up with a bid or projected budget and a price to build our home based on all those things plus whatever he/she needs to make it work, do the job and continue to run a business successfully. Fine with that. There is also someone out there who will do all the same things and will take opportunities to increase the profit he/she takes from the job without offering any additional quality or service to the owners. My whole point is that from my point of view the second scenario is not okay with me and I was wondering what others had done and how they felt about their experiences. I would like to guard against scenario #2 if I possibly can. I know if I choose more expensive materials I will also have to increase the labor portion because it will take more skill from the tradesperson required to do the job. We do want a well built home and know that we will have to make choices and potentially sacrifices to get the things that matter most to us. When I was projecting our budget I took the averages from about 5 different sources of information and then depending on my ability to verify how that would apply to the home we are building I would either use the highest number if I didn't know or the amount that seemed to fit best with our project. There were some items that I was able to verify by actually going out and getting real numbers others by saying 'we are building a home next year it will be (description)if I am looking for 'x' and I budget 'y' is that reasonable? In the 'unknown' areas I spoke to a friend who owns his own concrete flatwork company, he has built several of his own homes. One of his sites was in our neighborhood and similar to ours, so in my basic labor and materials budget I took the amount he paid for excavation and tripled it for safety. I compared that to the prices others have paid in 'hairy situations' and my number was always the highest. We have already dug some on the property as we put in the septic and the excavator at that time did not feel we would have a problem *from what he could see and had experienced on our site* digging the hole for the house. I took the highest foundation cost and added 50%. We have city water, septic is in and we have electrical ready to go. This home will replace a manufactured home so our permits are inexpensive-about 1/3 of what it would be otherwise. When I got my budget together I looked at the overall total and added 10% to the entire thing. I did find that some numbers varied more than others and were harder to pin down. Other times the same number kept popping up so I felt I must be close and the 10% on top of that should cover it. I actually showed this budget and the plan to the builder we are considering and she gave me the feedback that most of my numbers are 'conservative'- in her terms which meant 'high' and we should be fine. Even if our budget goes over another 10% from that we are ok -including the fee amounts she quoted us for her services. At the time the plan we had been considering was built as a spec house nearby and we had gone through it several times. When I contacted the builder I explained that we really liked his house and were considering building that home ourselves. We shared with him information about our property and our time frame and we talked about the finishes in the house and the different things he was including. When he gave me the price for the home as built but on our site it was about 16% higher than our highest number and it did not include everything. Based on comments some have made, maybe it was still a 'fair' number but then again maybe not...in our county you can look up valuations on permits and the price he quoted for house only was $100k over that amount and it was $200k over what he told the county his cost was. In talking with my concrete contractor friend who has built his own homes he told me that builders usually underestimate their expenses for the county but that the county gets very close and they include approximately a 10% 'contractor markup' in their valuation. Enter builder #3, nice guy, only builds turnkey, fixed price. Not sure why he was interested in us as we were very up front that we did not think we would go that way. He was trying to convince us why we should I think. He was very helpful and actually wanted to see our site. He has just finished carving half a hillside out for a huge custom home which we toured so he knows about 'hairy excavation' and he looked at our site and said it was about average for our area and he didn't see a problem. Famous last words I know... anyway he ballparked a price about 10% less than the higher guy and about 9% above our 'cost plus' budget. This makes sense as he does need that 'coverage' in there, but...we had already added that to our numbers so...either we are still way off or...make of it all what you will. The highest number is out of our budget, the middle number is doable and the low number means new furniture, nice landscape etc. Guess which one I am planning on? Guess which one I am HOPING for?! :) So perhaps some will say this all bears no relevance to an actual project and maybe it doesn't. I am not trying to control every aspect, just educate myself and be prepard so that hopefully we make a good choice when we do finally sign that contract. I just wanted to know what everyone else was thinking about builders, pricing and contracts and how to best go about building a home for a 'fair' price. We are committed to building a house, it will be interesting to see what it will actually cost. Thanks all.

Thanks luckymom23 & juniork! We are building in VA. We are talking to the builder today and have a list of questions to ask. The main one (after we hammer out a fixed price contract for the bank) will be adding and addendum that spells out the terms of the cost plus idea. The bank is fine with an Addendum, or at least the VP said as much by e-mail last night, so long as it's clear that the bank funds are separate. We can deposit our own money with the bank and they will release it along with the bank draws. It's not really cost plus 10%. It's cost plus 10% plus the fixed fee which is allegedly an incentive for the GC to not shop for high bids to charge the 10% on those high bids. But if the GC normally uses the same subs all the time then they know how much all of this stuff will cost....or at least they can project pretty close except if materials sky rocket again. The cost plus builder wants to make sure they are covered, which we understand. They don't want to do a true fixed price in case costs change dramatically like they did with hurricane Katrina. Looks like we will do a hybrid contract if they go for it, fixed price but with us getting receipts and requesting draws based on those receipts + 10%. The budget will already include the 10% so i.e., it's $16K for sheetrock, insulation and labor and the budget says $20K then the draw will only be for $17,600 (cost +10%). The budgets are all being projected based on bids from the usual subs. I know that the painter for the GC we prefer charges $3.25 psf and he does not spray but uses rollers. That is because if the GC has to touch up then it won't look horrible with their brush marks over a sprayed wall. The $3.25 psf includes labor so we don't need to worry if it takes him and his crew 2 weeks to paint our house. We will not need to be involved in selecting the subs. The GC's all use the same subs for every job. The GC we like best has used the same subs for about 7 years and the finished (and under construction) houses we saw all used basically the same subs. The trim work was AMAZING!! I wish I had taken photos. Our builder friend was very impressed - especially with the california closets (varnished bars) and the trim work behind the toilets (molding around the toilet valve instead of just sheetrock and paint). They just seem to do the little extras and that is why we like them best. We do count the garage when calculating the price per square foot, right? If we count the garage then we are paying (depending on which builder) $123 - $130 psf for 3705 sq ft assuming the cost plus contract comes in at budget and not one penny over. This does not include the payment for the lot though. Builder # 2 gave us a fixed price contract estimate that includes a $40,000 GC fee. And the 3rd builder wants a $24,000 GC fee with a fixed price contract. So yes, the builder we like is in line with all the others - right in the middle in fact as far as final price (assuming the estimates are dead on). Another thing we are requesting is that certain items NOT be on the budget. We see no reason to pay 10% extra for an appliance since the whole point in buying it on our own is to save money. I found a great deal on a 36" gas cooktop and it would defeat the purpose of me getting the deal on it if I pay the GC 10% of my cost in addition to the labor I know we need to pay for the install. I also plan to get my own kitchen cabinet hardware so we plan to ask that those items not be on the budget. I'm not sure if that will fly but we are asking. Thanks so much for the advice!!

Thanks dixie and sue for your responses. I appreciate your information. In the end, I paid the interest charges and all the invoices that he has provided. I didn't agree with all of them but we decided it was worth it to just pay and get him out of our lives. The anxiety of having to deal with him just became too much and I need to focus on other things like my family who have lived in 5 different places (3 hotels!!) in the last year. We just need to get settled an move on. The only outstanding items are the 10% hold back which we will pay when the 55 days is up and the lien is removed. There are a few things that need to be completed on the house but we have arranged to get done. There were 10 outstanding items noted on the Oct 25th inspection but no safety issues so the city inspector allowed us to move in. The items were things like completing the tile tub surround, caulking around the tub, installing a range hood, inspecting the attic and installing a timer on a bathroom fan. We still don't have a CO and he is blaming that on us but it is because the cabinet guys haven't shown up to install a piece that is required before we can install the range hood despite us contacting them every 2 days. Everything else is done but only because we arranged to have it done. "Your GC must have been a delight to work with through this experience..." The fact that he cashed the cheque for final payment and then filed a lien against our house 3 hours later because we held back the legally required hold back is a good example of the sort of stuff we were up against. But to be fair it was a learning experience for us too. I wish I had found this board before we signed the contract. Our last build was easy and not stressful at all so although we did a lot of research we should have focused on different areas. For example, he has built a number of different homes but we discovered after the fact that they were all spec homes that people had bought while he was building. We were the first cost plus contract he has done. Looking back it is so obvious that it was a question that we should have asked but we didn't think of it. We were too focused on the quality of workmanship etc. Guess we will be smarter and more prepared if we are ever silly enough to build another home. :-) The most important thing is that over all we are happy with our house and in a few months I am sure I will be able to laugh about what an ass he was/is. I did tell him that I could not and would not budge on the holdback amount and if he wanted to sue me over it he could fill his boots. I pointed out that it would cost him money and the holdback funds would most likely be tied up until the spring due to court scheduling. Until I pointed it out I don't think he even realized that he was arguing about a date that would be long over by the time we went to court. The money would have been sitting in trust all along and the judge would probably ask him why his was wasting his time.

The invoice from GC after lot clearing showed a 20% discount. New bill GC is asking for is for this 20% and cost of septic permit that was obtained. It is a proper amount if this had been a one time thing that would have been priced at Cost plus GC markup. terms of the verbal agreement between HO and GC has not been clear from the beginning so HO had one idea and GC must have had a different idea. In the end, GC claimed his discount was only in effect since he thought he would be the GC for a home building project and since he is not going to be the GC for the home build, its only fair he get paid the 20% markup he would have placed on that one job if it were to be his only job for the HO. In other words, GC priced lot clear as a seperate job with a discount from the rest of the build project since all was thinking that there would be a build project later on this lot for GC. Lot clear was paid in cash in full before actual build was to take place so build would be priced as only the build with no lot clear. Since no build project for this GC now, he feels like he should be paid the 20% markup he would have charged. It amounts to around 2k. Bad business on GC part. Shame on HO for not insisting on a contract with everything in writing so they would all be on the same page. HO feels its fair to pay regardless of lien since all were hoping to conduct a build project with the GC anyway. Its simply HO learned some things about GC that they did not like before any contract was made and felt the need to look elsewhere for a GC for the project.