Builder trying to increase price after signing contract.
sbaruth
3 years ago
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Comments (11)
kirbybunny7
3 years agoRelated Discussions
Builders, pricing, contracts - what do you all think?
Comments (28)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....See Morebuilder is looking for more $$ to cover price increases
Comments (51)I've got a different problem regarding "allowances" I signed my contract in April of 2017. At that time the allowance for 1386 feet of floor tile was $6,500. I was directed to a particular tile company that the builder works with to choose tile. FOUR times I chose tile only to be told I was over budget. The last time I chose the cheapest tile the store had available- not what I really wanted, 1.79 a sq foot. I was still over budget by $2,800 when I spoke with the contractor and told him I could get no cheaper, he said the problem was labor kept going up to the point labor was now the cost of the tile allowance. (6,500) leaving nothing left to purchase tile. On my allowance sheet, it only states: Tile Flooring-$6,500. It says nothing about labor being included. Had I known labor was included in the allowance, I would have budgeted more for tile in the loan. This is not this first thing in the allowance statement that has gone over simply because it never specified that these prices included labor. So far, I have downgraded everything from what I originally planned to have and still have had to pay an extra $8,000 just to get SOMETHING in there. This home was scrimped and saved for 40 years- a dream home. It is not our dream home at all, and we will turn around a sell it after it is completed, wiser and poorer. I don't think this practice should be legal. It is legal theft if a contractor can charge increased prices at will and you are responsible for the outcome....See MoreSigned Builder's Contract, Now To Make Experience Enjoyable?
Comments (4)Let's see... 1) Only read the happy posts here if you want it to be fun. Otherwise you'll have your mood dampened. And you'll start worrying about things that might never come to pass with your build. 2) Go live far, far away from the building site, where you cannot be contacted. Leave your cell phone at home. Give a Power of Attorney to someone who will have the authority to make all decisions, execute all documents on your behalf. 3) Plan fun, busy, yet relaxing things to do while you're away. Like on the extreme makeover shows where they send the family away to have fun while they build their house. They'll bring you back when it's time to move in! That's about it. Since you will NOT do those things, or cannot do those things, here are my alternative suggestions: 1A) Decide how much of your time and life's energy you are willing to devote to the build. As you go along you'll learn how to adjust those personal resources to adequately meet the demands of your tasks. Heed the word 'adequately'. Aim to do the least possible; lower your standards; keep everything simple; decide that some things can be done badly. How shocking! 2A) Clear your and your family's schedules for the duration of the build--not just the builder's projected timetable. Because during the build you will have lots of "little emergencies" and "we need a decision by tomorrows" to contend with. If little Johnny has taken up martial arts in addition to another after-school activity, the whole family will suffer. Everyone must scale back their schedule. Everyone must have unscheduled time that is available for the demands of the build. They will feel put-upon, and act martyred and you will feel guilty. But the family will fare better for it. Plan some fun, easily taken up and put-down family activities to fill any unscheduled hours that remain unclaimed by the build. (You will not do this either, because it seems either unnecessary or too burdensome on the poor children; you--and they-- will live to regret that decision.) 3A) Whichever adult has the most flexible schedule, and/or is thought to be the design whiz, will become the most stressed out one. She should, in advance, write into her schedule, inviolable times for favorite stress-reducing activities every: day (20 mins. 3 x daily); week (1 hour away from it all at least 3 x weekly); a monthly 3-day mini-vacation if she borrows a friend's basement to retreat to and sits by the window sipping tea. You will not do this either, since it seems entirely too greedy and you simply can't get away like this. The entire family will suffer as a result and come to resent you for getting snippy, full of sighs, catching more colds, whatever form of nastiness attacks you when you are overly stressed. 4A) Cultivate your sense of humor. Collect cartoons and funny sayings. Develop a mantra. These things will serve you well. Because while the process might not be FUN, it can at least be FUNNY! Others will fill in here with far cheerier advice than mine. I'm of the school that says, plan for the worst and then you'll be pleasantly surprised....See MoreChanging model after signing contract
Comments (11)@Deepti Nemani - You are using flawed logic when you compare a bonus room from one builder to another in the same community and expect them to charge the same amount. Each builder is going to have their own pricing structure, their own profit margin and their own costs even if they are in the same community. That doesn't mean that it is a gimmick. It means that each builder uses their own costs to determine the price at which they will provide you the bonus room. Are there differences in sizes and/or location of the bonus room? That contributes to the cost quoted. Also demand for the room figures into the added cost. If you are suggesting that all builders in a given community need to price their homes the same and their "extra's" the same, not only is that an unrealistic expectation, it is pretty much heresy IMO. Why would builder A have to charge the same thing as builder B? The consumer has a choice between builders. If the builder is telling you that the contract is in force and he won't change the floorplan to the one you want now, then cancel your purchase agreement. This is the beginning of a long road. You already are dissatisfied with the builder and his product and this is the beginning. As someone else pointed out - it's going to get worse from here. Seek out a consultation with an attorney and get your options. Think long and hard about what is best for you and your family and then do that. I wish you well. Building, even with a production builder, isn't easy....See MoreJuneKnow
3 years agolast modified: 3 years agoJudyG Designs
3 years agolast modified: 3 years agoNick
3 years agostrategery
3 years agomillworkman
3 years agoSteve A
3 years agoMaddie
3 years agocountingblessings
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2 years ago
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