Q: Last summer we signed a proposal with a local contractor to renovate our kitchen and two bathrooms within the existing footprints. The proposal totaled more than $50,000 not including the cabinets. Listed under the Scope of Work was all necessary plumbing (e.g., “Install shower drain and fixtures”) and electrical work (e.g., “Install under-cabinet lighting”). Now, on the … [Read more...] about Is a Signed Proposal a Legal Contract?
Is Our Contractor Overcharging Us?
How to Avoid Changes, Extras, and Surprise Charges on Your Next Job Q: We were hit with a $20,000 extra for changes in our new home after the framing was completed. We had a fixed-price contract. The changes including a revised stair layout (U-shape to to L), removing some windows, and moving a bathroom. The framing was completed, but no plumbing or electrical was done. Does … [Read more...] about Is Our Contractor Overcharging Us?
When Is An “Estimate” a Binding Contract?
Q: Hi. We received an estimate from a roofing contractor for $10,500. When the job was done, he gave us a bill for over $11,000. He said that the roof took an additional square of shingles and required some repairs to the sheathing. It was our belief that the original “estimate” was the full cost of the job, not just a best guess at the cost. Who is right here? - Alex A: … [Read more...] about When Is An “Estimate” a Binding Contract?
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 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?
Radon Risks and Best Way To Mitigate
Don asks: Our house measures just over the EPA limit for radon. Is this something we should be concerned about or are the risks overblown? How effective are radon mitigation systems and what do they cost? -- Doug M. Steve Bliss, of BuildingAdvisor.com, responds: While radon stories rarely appear in the news anymore, the health risk from exposure to high levels is real and … [Read more...] about Radon Risks and Best Way To Mitigate
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 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?
Cost-Plus Contract for New Home
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
Allowances — What’s Fair? Also Fixed-Price vs. Cost-Plus Bids
Dawn writes: I need help! I am a homeowner who is doing a major remodel. I should say up front that I really like the GC we have picked... good reputation and references, been around forever. He has been very fair about working with us to change wording in our potential contract so that both of us feel like our interests are covered, etc. We have not signed a contract with … [Read more...] about Allowances — What’s Fair? Also Fixed-Price vs. Cost-Plus Bids