AB writes: On a pretty large remodel job, the contractor has not abided by the contract terms he has written up. He insisted I was limited to a “discount” granite slab he had already purchased, and if I wanted to pick my own slab, there would be a $1300 extra charge. In the language of the contract, any item that is already installed cannot be rejected. So in effect he limited … [Read more...] about Resolving Disputes Over Specs, Change Orders & Cost Overuns
Q: If a ceramic-tile floor is failing in our less than 10-year-old home, does the builder have an obligation to replace it if it was not installed properly? Are there minimum requirements that have to be met when installing a ceramic floor in new construction? — Sheila A: There are well-established industry standards for setting ceramic tile, published by the Tile Council of … [Read more...] about Warranties and New-Home Defects
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 BuildingAdvisor.com, responds: There is no industry standard for markup percentage and the numbers vary a lot depending on … [Read more...] about Cost-Plus: How Much Markup?
Alex asks: Our contractor wants us to take out the building permit for an addition under our name and says that is standard procedure. Does it matter whether the owner or contractor takes out the building permit? Steve Bliss, of BuildingAdvisor.com, responds: In general, you are better off having the contractor take out the permit. If you take out the permit in your (the … [Read more...] about Who Applies for Building Permit?
Brad asks: On remodels, are supervision costs typically included in contractor's percentage fee or are these billable? Steve Bliss, of BuildingAdvisor.com, responds: There is no definitive answer to your question as different contractors handle this issue differently. Some bill for all supervisory time, some bill for only specific types of supervisory time, and some bill for … [Read more...] about Cost-Plus: Are Supervision Costs Billable?
Dino writes: What is the average percentage that builders charge when they build a new home on a cost-plus contract? Do you recommend that route for a custom home? Steve Bliss, of BuildingAdvisor.com, responds: In pricing a new home, contractors typically mark up their hard costs by 18% to 25% for overhead and profit, although the actual number can vary considerably by … [Read more...] about Cost-Plus Contract for New Home
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 BuildingAdvisor.com, responds: To find out if the bid is in the ballpark, you can compare it to similar new homes for sale in your … [Read more...] about Modular Housing Costs vs. Site-Built?
Bud writes: Our contract is a fixed fee tied to the final cost per square foot, and it provides the builder a bonus for meeting the cost target. Should the bonus be held until the punch list is completed or paid at the final draw before punch list? Second, who typically pays for the punch list, the builder or the owner, if issues arise and the workmanship was not up to par … [Read more...] about The Final Check and Punch List