Bid cost vs. contract costs
lapsangtea
7 years ago
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Bids and Typical Costs
Comments (7)I would not attempt to estimate your project via computer ... I would get a few more estimates. Prices can vary by quite a bit by region ... I'd guestimate in my market that would be high but I don't know your project details. However .. your system of estimating is a bit optimistic ... the kid next door might use such a system .. not a full time contractor. How about over head ?? ... phones .. trucks .. insurance .. equipment ect. .. a technician at $10 an hour on the books is going to cost a contractor no less then $104 dollars a day and thats NOT a plumber .. Warranties cost money and so does standing behind your work. How about profit ? .. contractors don't work for wages ... retirement ? .. Health insurance ? ... on and on .. have you checked the price of gas ?? .. driving for one project might cost as much as three valves ! Again .. get a few more estimates and check references and local contractors board. Good Day ......See MoreCost to build vs cost of material
Comments (4)You will have to break it down by each individual component to get a good idea. Also are you going to do any yourself?. A bunch of the components will be close to 50% material 50% Labor. That is what I am finding here in Kentucky, not sure about Canada. I would guess your insulation and HVAC will be considerably more than here both in Materials and labor. By subcontracting yourself you have already saved a chunk! Hope someone responds that can give a better answer :)...See MoreWhat kind of contract is this--fixed or cost plus?
Comments (4)It appears to be a turn-key (not owned by you until finished) Fixed Price contract with Allowances for some items. Allowances are like small Cost of the Work contracts within a Fixed Price contract. These Allowances should be well defined in the contract. I've never known anyone to be responsible for permit fees other than the owner of the project but if the builder owns the project until the end I guess the permit fees would be part of the Fixed Price unless specifically excluded or listed as an Allowance....See MoreFor those that used a Cost-Plus Contract...
Comments (7)Use me as your "what not to do." We built our house in a cost-plus arrangement. I asked, and asked, and asked for detailed specifications and a detailed control cost estimate. The builder essentially said, "I don't do those, trust me." He is the most talented builder in town, and we really wanted him to build our house, so we trusted him. It worked out for us, but we did end up spending almost $100,000 more than we intended. Before signing the contract, the builder gave us a number that he thought we would spend in building the house. Then, we made him put a clause in the contract that effectively says for every item we chose that will affect that # (up or down), we will get a change order. That way, we would be able to track where we were in relation to the initial "estimate." As anticipated, that didn't work. The change orders amounted to about $25,000, yet we ended up almost $100,000 over that initial number. The builder also gave us a copy of the estimate that he gave to the bank. That estimate was about $35,000 more than he told us he could build the house for and told me, "Don't use these numbers; they are inflated." Inflated? Then, why did we exceed those inflated numbers, by a large margin? At about the 3/4 point through our build, the builder recognized that our costs were skyrocketing, and changed his "plus" component from a percentage to a fixed amount. That did save us a little ... but we were still almost $100,000 over the original estimate. Lesson for you to learn: Do not sign your contract or begin your build until you have a real estimate in hand that the builder will stand behind. Also, realize that all of those $1,000 - $5,000 upgrades that don't seem so much individually really add up. Did I really have to have the $6,000 bathtub or add the steam shower to the master bath? In hindsight, nope, but at the time I made those individual decisions, it didn't seem like that much money. Now, changing the hardwoods from oak to walnut ... that's a cost worth it because the hardwoods now make an incredible impact. I love my new home. It's perfectly built and exceeds my expectation. Fortunately, we saved like crazy during the year that we built and were lucky enough to sell our prior house early and fall into a house-sitting situation where we lived virtually rent-free for a good 7 months. That enabled us to still close on the house, even though we were way over budget. There were a few very stressful weeks when it looked like we were going to have to walk away from it because it ended up so expensive. Our builder gave us copies of all receipts and invoices every two weeks, so we were able to track the mounting expenses. We just didn't have a real control estimate to use to gauage when and where we had exceeded budget. Good luck and learn from me!...See Morelapsangtea
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