Cost-Plus: How Much Markup?

Bryn asks: On a cost-plus bid, what be an average to high-average markup to expect from a contractor with a strong reputation for doing good work? What is the highest percentage one might expect? Are there other factors in comparing bids? Steve Bliss, of, responds: There is no industry standard for markup percentage and the numbers vary a lot depending on the type of job, region of the country, and market conditions.  In general, remodeling jobs will have a higher markup … [Read more...]

Cost-Plus: Are Supervision Costs Billable?

Brad asks: On remodels, are supervision costs typically included in contractor's percentage fee or are these billable? Steve Bliss, of, responds: There is no definitive answer to your question as different contractors handle this issue differently. The really critical thing is that the contract clearly spells out what costs are reimbursable what are not.  The most common approach is for contractors to bill for time they spend on the job site, but not time spent in their … [Read more...]

Comparing Bids: Is the Low Bid the Best?

Louise writes: We submitted detailed plans and specs for a substantial remodel of a beach house to five builders: two "big name" builders, two midrange, and one "mom and pop," but very highly regarded, small builder. This is our first time going through this process and we (naively) assumed that we would get back five proposals that we could compare easily. Wrong! Some are extremely detailed, others are very general, and none appear to have included everything shown on the plans. To make sure … [Read more...]

Modular Housing Costs vs. Site-Built?

Peter writes: I received a quote from a building company for a new customized, pre-fabricated home. The quote and specifications are quite complex. How can I tell if the price is reasonable and competitive with a site-built home? Steve Bliss, of, responds: To find out if the bid is in the ballpark, you can compare it to similar new homes for sale in your area. You can also check square-foot construction guides. For a more detailed comparison, you would need to get … [Read more...]

Final Cost Is Less Than Bid

Cristal writes: If the Contractor Bid $300,000 to build my house and then it ends up costing less to build the house do I still pay the $300,000 that I signed the contract for? Steve Bliss, of responds: The simple answer is yes -- you'll pay the full contract amount assuming this was a standard fixed-price competitive bid. There are some situations where you may pay less -- for example, a change in the plans that lowers costs as the result of a "deductive change order," … [Read more...]

Getting Bids for Rot Repair

Rich writes: On 75 townhouse units, is it better to get bids or pay for time and materials on new siding and repair of dry rot? You can't tell the extent of the dry rot until the siding is removed. I think the job will cost $300,000 to $400,000 to complete. The association members have many views. What do you advise? Steve Bliss of responds: It sounds like you have an unknown amount of decay in the sheathing and maybe the framing that will have to be repaired before … [Read more...]

Should I Pay for a Remodeling Estimate?

Thom asks: Should I pay for a cost estimate? This is a remodel project of a kitchen and three baths. Steve Bliss of responds: While most contractors advertise "Free Estimates,"  some contractors charge a fee for estimates – especially higher-end contractors who often spend a lot of time preparing detailed estimates, plans, and specifications for jobs they may or may not get. Some will only charge of estimates on jobs that require a lot of time researching new materials and … [Read more...]

Estimate Seems Vague on Details

 Robert writes: I am planning to build a second home.  The builder who I hired has refused to provide copies of his bids for the various parts of the building process.  He claims it’s not normal business practice and he’s never done it before.  However, he did provide a document titled “Scope of Work” in which he identified the costs for the various parts of the project.  The scope of work and specifications are in many ways vague.  I asked him if he added any overhead/profit to his bids, he … [Read more...]

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