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 Will Modular Homes Save You Money?
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
Terence writes: How would you recommend paying a project manager? Would it be a percentage of the building cost or a daily or hourly rate? What would the rate be? Steve Bliss of BuildingAdvisor.com responds: Construction management is still primarily used on large commercial projects, but is gaining in popularity in residential work as it promises to reduce costs and give … [Read more...] about Hiring a Construction Manager
Travis writes: We are in the planning stages of building a house. We will be paying cash and have gotten quotes from three builders. We have been told by three different insurance agents that as the property owners paying cash, that we should have the Builder’s Risk insurance and the builder should have liability insurance. Two of the builders told us that they are the ones … [Read more...] about Who Should Buy Builder’s Risk Insurance?