Permit overages?
kelly_143256
4 years ago
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Jeffrey R. Grenz, General Contractor
4 years agoRelated Discussions
Allowance opinions on an 850K home?
Comments (24)OK, I read the first several posts... and skimmed the rest. As a Realtor and someone who has built a moderately high end home with similar specs, and someone somewhat familiar with builders, tricks, and what-not; as well as, a person that has had to take a cabinet maker to court for failing to perform per a very detailed contract. I believe I have some serious insight. (This forum saved me from losing my mind.) First, you have gotten some sage advice above. Heed it. Secondly, I do not believe that I would EVER do a cost plus contract building. Why would you? There is NO incentive for the builder to watch out for your budget, build wisely, or serve you at any turn. The more he spends, the more HE MAKES! DUH!!! RESCIND that decision now! BACK OUT. Contact and attorney to get out of it. Best $400 you'll spend. YOU are taking ALL the risk!!!! (I know, builders are in my family!) Your lot is $165K +/-, which in the Midwest, I assume is a lot with a view or large acreage. At $850K, that's over $200/sf. You should be able to build an exceptional home for that amount of money. If I had a builder hand me that list above, I'd crumple and scrunch it into a tight ball and throw it away for someone insulting me and wasting my time. Ten years ago, we built and acted as our own General Contractors. We now have about 4,500sf finished. About 2,500sf is Brazillian Cherry and the wood and install was around $20,000, as posted above. The rest of our home is a combination of travertine, porcelain, and carpet. All flooring was around $35K. I have 5 bathrooms with Toto one piece commodes, 11 sinks throughout the home, and 4 custom shower doors. The frameless MBa door was $1,500 alone. (I got bids from $4,300 to $10K for the glass doors in my bathrooms, so BIDS are IMPORTANT.) Cabinetry: OH. MY. LORD. Bids were all over the place. Many companies literally demanded to see the entire home plan. They bid on the home based on the overall price of the home. How? They figured they'd charge 10% of the value of the home, not including appliances. I went with a custom guy that obviously was a CROOK and CAD. (I will not go there.) I have a terrific kitchen. Upgraded, yet not too extravagant. 48" Thermador Dual Fuel Range, Advantium 220v oven, Fisher Paykel Dishwasher, Compactor, Franke Pro 12" deep sink, $600 faucet, Franke disposal, Warming Drawer, And a standard fridge, and two separate under-counter U-Line fridges with icemaker and a freezer models. I do not have two sinks or a pot filler; but will in the next house. My kitchen is about 16'x28', with an additional 6'x6' pantry. It's a very nice kitchen. 4'x8' island, Beautiful granite and mosaic back-splash behind range. I think about 83sf of granite with a double ogee edge, and 1/8" metal plate under island granite. Granite is a Level 3 granite: Delicatus ��" Polished. Price for all of my home granite was around $8K. Appliances around $22K or so... and had I bought a 48" fridge about $6K more. Opted for undercounter fridges and other home cooling fridges spaced throughout for convenience. (Six in all.) Let's see: Cabinets in the house near $35-40K. Roof: I have a 50 year shingle, too. Shingles alone were about $4K, not including install. Prices to install the roof, with weather watch in valleys and 'cut up' areas, ran from bids from $4,500 to $22,000! Bids to install did not include the materials... only labor. I went with the group of guys that I found that were roofing all of the 'high end' homes around here. And...drywall finishing with a level 5 finish was pricey. We bought all materials. Contracted for labor that bid $6500. He tried to bill us twice that much... got a lien, etc. He wasted SO much drywall, since we were buying materials. I would rethink that next go around. ( I would also make sure that all electric, speakers, etc... was marked on the ceiling as soon as sheetrock was installed. I would also take pictures with two cameras BEFORE walls were closed up in case one camera fails.) GET EVERYTHING IN WRITING. (We did and won.) When you GC a project yourself, you front all the money and MUST MANAGE. If you want to use a builder's money and he fronts all the money, then HE manages the project. IF you do a COST PLUS, THE BUILDER DOESN'T CARE WHAT YOU change or spend BECAUSE HE MAKES MORE MONEY FOR YOUR IGNORANCE and every single change. Just Don't DO IT. Choosing a builder: Make sure you have a full understanding of every cost of every specified nail, screw, how your drywall is installed (nails or screws), change up costs, etc... Do not trust "your friend" from childhood, blood relation, guy from church, etc. I hate to say it, but at the end of the day, you'll get screwed. Just do not get into any building relationship unless you have your builder putting some skin into the game and manages YOU and YOUR money. Everything that you want and agree to do is to be in writing. (My bro is a builder. His policy, sad to say, is screw them first or he'll get screwed.) Many builders think that way. I hear their positions all the time. SOMEONE WILL PAY for screw-ups. Make SURE your finances are PROTECTED from their mismanagement. Make SURE you fully understand your contract and what is expected from you. Ask your attorney to make SURE that the numbers are fixed and you know EXACTLY what the home will cost and every single appliance model #, finishing item, cabinet quality, with half of a sample door in YOUR possession is written into that contract. IF it's in the contract, then you won't end up with an expensive home, but one as you expected. Because I had every light fixture, finish, model number, stainless screws, name of every single item, We won at every issue. I've had grown men CRY in my face trying to plea away errors and omissions. I had a contract and I will pursue it to be fulfilled. If you don't pursue, you will get screwed. Be prepared and professional. Every agreement with everyone is to be in writing. Also get them to sign releases when completed and you are satisfied. If they warranty an item or service, get that in writing, too. Blessings to you. Story: Gal I know hired guy from church to frame her home. He told her, "I'll charge you $20K to frame if you pay me cash. If you have to write me a check, then the framing costs will be $25K." She chose the former method. All was well until the last two draws. She stipulated that she needed 48 hours of when he needed a draw to get the money. He agreed. All of this was verbal. 2nd to last draw, he told her on Friday that he needed the money THAT DAY. She said, "I'll have to give you a check." Framer was fine with that. On the last draw, she expected to pay him $5,000. Framer said, "No. It's $10K, you didn't stick to our agreement." She balked. He threatened to file a lien on her property that afternoon and "all in the church would know she didn't pay her bills". She knew we had a few liens and she didn't want to be embarrassed... so she acquiesced and caved. She paid his demands. Later, I said, "Why would you allow him to bully you that way? It was HIS responsibility to prove your agreement to the courts. I wouldn't have paid him one red cent more than the $5K and let the courts decide. I am confident you would have won." She was more worried about her pride. I would have been concerned about my allegiance to my family and I would have told everyone that asked about that cad. I don't care if he did go to my church. He's a 'business church goer' and people needed to be warned of his tactics. OK... sorry for no paragraphs. I just realized I could. Back to pricing. Electric LABOR was $16,000, which was to include basic wiring. Electrician left an account open and did not pay it for our home wiring and we had to clear a $2K mechanics lien. (Yes, TRHEE issues concerning liens while building.) The lighting was also worth $18,000. And no, not gold plated. I have 64 doors in my home. Yes, 64. Windows are top of the line, triple glazed, argon gas, etc. All windows trimmed out, etc. Bricking, $40K. Stairs: Oh. My. Lord. WHAT A shocker. Labor and materials were around $25K+ and it was a Brazillian cherry stair and riser, wood rails and BC banister and turned at the finial areas. I've since forgotten all the parts. I was shocked at what it cost. So, finishing inside the house was pricey. I'm not touching on painting, fireplace, mantle, porches, fans, and plumbing. Your prices above are a JOKE in today's world. Also, many counties have impact fees and other fees besides a building permit fee. Our county started adding fees up to around $20K now just to build. These are important numbers to know. FYI: If you are in a flood zone and must have flood insurance, you had best check with FEMA to find out the new building codes... because the fees will apply and new building codes must be followed. It's your responsibility to do this due diligence. I am most appalled at about your post is that I cannot believe anyone would sign any agreement with unsubstantiated and 'hard numbers'. I hope you have more paperwork than what you are presenting. I doubt that you really have signed any 'contract' with any builder except to secure a lot. It appears that you should back out of your plans because I would never encourage a client to rush into any contract with the information you gave. Without going into story after story, I will give you the punch lines: I have personally known people that HAVE gone into a building situation like this and when it came to closing, the people ended up in divorce court, law suit, and one guy committed suicide. Why? All ended up getting screwed at the closing table. The builder 'gladly' changed anything and everything to make the client happy. One person was to have a $750K home, with change ups and client demands... turned out to be almost double. Another, $350K MORE. The builder had it in their agreement that they would pay for all change ups, modifications, etc. ANY changes, even adding a light switch, will cost you double than had it been on the plan in the beginning. Don't even try to add a closet or enclose something. It's best to get the house built, then change whatever after closing. Building is stressful. If you are independently wealthy, then no problem. If you are like most moderately well off American that wants what they want, make sure you do it wisely and have well proven, wise advisers help you build. It is also a huge bonus to have honest employees/contractors. Lastly, make sure you have several web cams on site to keep an eye on your building supplies. Keep everything locked up and make sure builder does too. What goes missing or is stolen, will cost YOU more in the end. It will be the best money spent....See MoreHow much over on a fixed price contract?
Comments (13)Sue: I don't know enough about construction to know why the foundation might run over either; I'm just trying to anticipate possibilities. Perhaps if soil conditions in that area required a more extensive foundation? One thing our G.C. said is that if anything really bizarre turned up and they needed to bring in a soils engineer, we would have to pay the engineer's fee. And, I presume, any additional cost for construction related to his findings. No septic; county sewer and water. I rate-shop loans every few months. Consistently for us, our best deal is with Wachovia to do a C-P loan. We can lock in a permanent rate for 12 months, or pay an ace to get an 18-month rate lock. I have no idea whether to do that or not. We pay interest only during construction on the cumulative amount of the draws. We own our current house free and clear and won't try to sell it till after we move into the new one. We paid cash for the property the new house will be built on. So, there won't be any unexpected expenses with our living situation. Of course, prorated property taxes and insurance for a longer build, but I've budgeted for a 15 month build on that and it's a small house that's expected to take 5 to 7 mos. Two related issues on that, though. One, is I don't know what the homeowner's insurance company will do once we do the demo and start building. At first they'll have nothing to insure and gradually they'll have more and more of a house they're insuring. Secondly, I don't know how the city and county will handle our property taxes. In Ga, for the county at least, the assessments are based on what you own on Jan.1, with taxes due in Sept. I don't know what I'll own on Jan. 1 and I don't know if they'll re-value it if it's a vacant lot (should and will also being 2 different things) or periodically during the build. Many mysteries here. BTW, do you remember me? I'm the one who said "I don't buy a lawnmower without my attorney looking at the contract. We love our atty. and he loves us"? That's me. But I do all I can do first, to save attorney's fees. I spent a few years reviewing contracts in the legal dept. of a huge finance company, so I'm comfortable with the initial reading. And I know when I need help. My atty. usually gets contacted by me during the negotiation stage for some help. Then he gets the preliminary contract with a list of questions clause by clause. We work well together hammering things out that way. dixiedoodle: we should all be so lucky as to have your deal! If we go more than 2.5% over the fixed price, for the unexpected, we have no choice but to dip into the IRAs. But it won't be the end of the world. We've been hacking down the size, etc. of this house till we can go no further. It's a stretch. And we are nervous. I do love your wording about the substitutions. I have printed it out for my contract file. Thanks to both of you. I'm always informed by what you......See MoreCan someone dumb this down?
Comments (2)I would question that someone who is employed by the bank is working on the house. Is he a licensed contractor, employee of bank? certified and are they pulling permits. Check with the building dept to make sure all work done has or will have permits. You might check with a RE lawyer to protect you and your money....See MoreOverages
Comments (22)Amber - according to the contract the builder is to supply: "Unless otherwise specifically noted, The Builder accepts the relationship of trust and confidence established between him and the owners by this agreement. The Builder agrees to furnish the skills, judgment, administration and supervision, and to use his best efforts to provide at all times an adequate supply of workers and materials, and to perform the work in a most expeditious, economical and workmanlike manner. The work shall be done substantially in conformance with the plans and specifications that have been initialed or signed by each party. attached Estimate. The builder shall procure the necessary permits. Permits to be acquired include, but are not limited to, temporary toilet, septic permit, water meter, temp to perm electrical permit, residential construction permit and contractor affidavits from HVAC, Electrical, Plumbing and Insulation Contractors." The foundation was dug while we were on vacation and was not in exactly the spot we indicated we wanted the house to be when we left. Builder said we would save money by turning the house - but we bought this piece of property for a view so did not want to have the house turned. We made that very very clear. Foundation had to be re-dug - made ceiling in basement 2 feet higher and garage ended up having to have a 10 foot retaining wall. When we asked what the extra cost would be to move the house we were told $1,500. Stupid us ... didn't get that in writing. Virgil - From what I can tell the contract is just a standard Residential Construction Agreement. I may have misunderstood this whole process, but the builder sat down with us and went through each line item of pricing to get to a total price we were comfortable enough with to sign the agreement. From what I am rereading in the contract - it looks like a price was decided upon. The estimates are attached in exhibits and all changes and extras are our responsibility. I can't seem to find who is responsible for "mistakes". I have to admit ... I am losing sleep over this build. I went into it thinking the builder and I were partners - but communication has been sorely lacking. Thanks all for taking the time to respond. My husband and I have a meeting set up with the builder in the morning to go over budget....See Morekelly_143256
4 years agorobin0919
4 years agoLisa
4 years agolast modified: 4 years agolive_wire_oak
4 years agotiggerlgh
4 years agolive_wire_oak
4 years agolast modified: 4 years agoIg222
4 years agolast modified: 4 years agoJeffrey R. Grenz, General Contractor
4 years agoworthy
4 years agolast modified: 4 years ago
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