Do all GC charge 25% markup on material and some labor?
raineygirl
15 years ago
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mightyanvil
15 years agojustnigel
15 years agoRelated Discussions
Understanding Material and Labor allowances
Comments (4)Let me guess, you didn't have an attorney review this before you signed it? It sounds like the contract is vague, big surprise there. Assuming the contract doesn't say that installers, subs, etc., have to be approved by the builder, or that the builder gets to do certain labor, etc., I'd say you can use who ever you want to perform the allowance items. "Material and Labor" just means that the material AND labor are included in the allowance amount. This is to cover the case where you pick out the tile, under the allowance amount, but then try to claim the labor is included as part of the contract and doesn't have to be covered by the allowance amount. So, if the allowance amount for carpet is $6000, that means you can't go over $6000 for labor AND material (if you go over then you pay the difference, and no change order is required for the builder to bill you that amount). Assuming carpet, cabinets and hardwood floors are all allowance items, then you can use whomever you want AS LONG AS there is nothing in the contract that contradicts you choosing your own subs. The builder drafted a vague contract and now wants to insert what he intended for it to mean. Too bad for him. Vague clauses are construed against the drafting party. Assuming it's his contract form that was used, then if there is a reasonable disagreement about what something means, it will generally be resolved in your favor since he had the opportunity to make it clear (to his favor) when it was drafted. "No change order needed" on the allowance items just means that if you go over the allowance amount he doesn't have to get a change order from you in order to bill you for the difference. Let's say the brick wasn't an allowance amount. But you change your mind and want a different brick. A written change order would presumably be required (I say presumably because it is possible he included that clause in the allowance section and yet did not include a change order process elsewhere. Conflicting clauses in contracts happen all the time). But if you pick a high allowance amount he can just bill you for the difference EVEN IF YOU ARE UNAWARE you went over. Watch this carefully. Let's say you picked a carpet where labor wasn't included, and he said he'd install it. If you follishly didn't ask what the labor would be, he could bill you whatever he wanted for that labor because no change order is required. Also, cabinets should not be stored in the basement. They need to be stored somewhere that is humidity controlled. We used our garage, with 2 dehumidifiers running. Good luck....See MoreGC markups
Comments (28)My GC destroyed our house, so he was fired before his drywall subs could even start. He had his own employees - THEY were the IDIOTS who detroyed the framing, roofing and siding. He told us on day one that the actual electrician would run the wiring - WRONG! His morons did it and then I had to learn all about electric and fix it! We had to then hire our own electrician. Well, next time we are going with the higher bid from the company we know is reliable. The guy we hired was nice (at first)- and his bid was about $5,000 to map out the wiring the morons did, inspect it, have the electric inspector approve it and then hook it up and get final inspection. The highest bid for all new wiring was around $7,500. Well, that turned into "Oh, you wanted THAT?" YES! Do you not comprehend English? And on and on. In the end it cost us over $8,000 just for the electric, and I actually did the re-wiring (the original MORONS NAILED through the wires!) Then, AFTER the final inspection, the electrician came back because some breakers were recalled. When the guy was there he looked and said "Oh look, your breaker box (in the basement) has rust - it looks like water is getting in along the main line from the outside. You need a NEW breaker box and breakers. I'll get back to you with a quote." He wanted over $2,300. So, it just so happened that an electrician just purchased the old building my mother used to work in, and she stopped by to see how they liked it. She explained the situation, the guy came out and said "You do NOT need a new box. There is only a little rust. I'll clean it all up, replace any corroded breakers, clean and re-seal the main cable on the outside for $700. If you want a new box for added capacity you can do it later." DEAL! In and out in a few hours, two very nice guys. Not like the other electricians who thought they were God's Gift! We had to hire someone to rip down and replace all the cedar shakes. The original MORONS installed it with no double-course on the bottom and GAPS showing Tyvek behind the shakes. We found a local high-end GC who does almost all cedar. Yes, the bid included a few hundred extra dollars per day for the GC's "time" (he didn't do any work), but his cedar subs were true artists who usually do high-end work on the water. What a DREAM! They were very nice, one guy LOVED that my house has the old ship-lap plank sheathing, they replaced the Tyvek with tar paper (NEVER use Tyvek behind REAL wood siding), installed all the new (properly sized special order 24" tall) shakes in 3-4 days. They even left us the $2,000 worth of 18"h shakes that were ripped down to use as kindling in our wood stove. Normally they take them because they all heat with wood too ;) The GC even offered to give me cedar scraps in the future if we ever need them (that won't be for a few years though ;) -- Dianalo, just before the new electricans arrived (the rip-off guys), the ONE available outlet in our kitchen died. So yes, they replaced it the day they mapped the wiring. It cost a few HUNDRED dollars for that ONE outlet with new line to the box (a short, clean run). Had we just called in a local electrician for an hour it would have cost maybe $100 for an hour's work. I do not understand how your GC added an upcharge to items that YOU purchased?!?! Even my original GC told us "Buy your own light fixtures - make sure they are here by this date." The electricians charged $300 for each ceiling fan install, and $100 for each recessed light. If I had realized how BAD recessed lights with CFLs would light the rooms I could have saved $1,400 and put that towards the expensive sconces and pendants that match my triple-pendant and gotten 10x the amount of light in the room. Oh yeah, they wanted to charge $10 for each CFL lightbulb! We bought our own - this made them REALLY MAD! They claimed that customers NEVER buy their own bulbs! What? That is INSANE! -- Oh yeah, we hired our own drywallers. The GC was charging a few thousand. The bid was only $700 for labor - we already purchased the drywall because my brother's friend was going to do it (but he screwed up the insulation and I had to fix it, so that idea went down the drain). $700 sounds cheap, but it took only 1-1/2 full days, the other days they came between other jobs. I think it looks like crap, but I did some research (when deciding on paint sheen for the ceiling) and it turns out modern crappy drywall / spackling is NORMAL! I am SO glad I live in an old house with 1" thick plaster walls with smooth-as-butter like a baby's bottom finish. I had to fix a cracked ceiling (WORST experience - threw out my back for 2 weeks), but once I hit the original plaster under the gazillions of layers of paint I couldn't BELIEVE how SMOOTH and PERFECT it was. And someone did it all by hand! Oh yeah, people think that new construction has crown moulding as an "added value." That's BONK! It's because the framing and drywalling is so bad! You NEED crown moulding to hide the wavy line between the wall and ceiling. I haven't done mine yet because the cost of lumber has skyrocketed and the wood just to make the trim around my patio doors cost over $200. All I can say is Thank God I already do my own custom trim - there are SO MANY screw-ups that need to be hidden. The original MORONS cut the first plank of wood flooring between the dining room and the new kitchen. I looked at it and SCREAMED "WHAT ARE YOU DOING?!?!" They said "Aren't you going to replace that old floor?" WHAT?!?! I said "Are you CRAZY? That is ANTIQUE FIR! WHY would I rip that out and replace it?!" Cutting the flooring and installing a wide decorative strip between the two rooms is the job I am dreading most. That is the one thing I truly fear I can screw up, but I don't trust anyone else after all I've been through. Having to engineer and build new beams and collar ties and figuring out 3 different mitres and bevels to shore-up the roof so the original front roof doesn't collapse is nothing compared to facing that floor!...See MoreHow much $ can a GC save on materials?
Comments (12)I love this thread....and I will confirm that the era of the big material discounts for GC's has been over for a long time. We don't have an account that offers us a 10% discount. We do receive the occasional early pay discount of about 2% and I can assure you those vendors are paid before the ink on their invoices is dry. As for contracting your own project I can tell you this story. We were contacted by someone who was moving into our area to do some minor work. We did the small project at cost hoping for future work....she kept calling and asking for information and referrals to our subcontractors because she wanted to "save the markup". So we gave her some names. She calls back a few months later with an emergency water leak on a Sunday....we headed down to her house which is an hour drive each way, found the leak, shut down the water and went home. She calls the next day and wants the name of our plumber to "save the markup". Our plumber was busy and couldn't accomodate her needs that day so she calls us back complaining and we bail her out again by calling the plumber and having them onsite in an hour. The moral of this story is....with a GC you are getting long term relationships with the subs and material suppliers not just a friendly face on the job. Without our connections the response time is slower and the job isn't as efficient... not that subcontractors are unresponsive to homeowners but their bread and butter is GC's In closing...the client is still calling and asking for information. We have spent countless hours on the phone with her explaining construction process etc and helping her to "save the markup". Do you think our unbilled for time will pay off someday? Good luck!...See MoreMarkup on GC's own labor?
Comments (7)Your interested in the bid - because you like the way the GC represented himself, and his bid price. Questions on the cotract are fine... A possibly more serious question - a max amount price. A CAP on what you would pay? Some bids have percentages, and a non fixed total price... some bids have a fixed total price... and some bids can have a CAP on the total cost. You also need to be certain this individual is reputable. The GC can hire specialists - and you are not required to pay them... But if something happens - and the GC did not pay the specialists - those contractors can put a lien on your house. Those liens can cause you major headaches later on... So make sure whom your dealing with. Also - some contractors routinely put a lien on a house - when they start work on it.... Sometimes they then forget to remove the lien. So know his work pratices, and his reputation....See Moresnoonyb
15 years agoraineygirl
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15 years agoJon1270
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15 years ago
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