I’m sure there are real good reasons for it, but seems like everybody I talk to has trouble getting their builder to finish up the work. I’ve got a builder I want to use to build a house for me. And I’d like to find something to put in our contract that would be an incentive to get him to finish up on time.
Anybody know of anything like that?
I’m thinking about a clause for me to pay a “timely finish” bonus of, say, $10K if he finishes up by a set date. (construction cost will be around $525K to $550K)
Don’t know if the bank would agree to it (I’ll be putting in my own cash toward the end of the build, if that matters). I also don’t know if it would insult him. He’s an award-winning builder and I’m sure ego will enter into things.
Any ideas??
Replies
Ask him if he likes the idea. $10K is a nice incentive, no matter the cost of the total project.
I'm a big believer in incentives, particularly as opposed to penalties. Just make sure you both agree that the completion date is realistic from the beginning. Then don't mention it again. If he likes the incentive idea well enough to have it in the contract, he'll remember that it's in there.
Edited 2/12/2008 6:42 am by Hudson Valley Carpenter
Although I do like the cattle prod idea, I also like incentives. I've heard of using a carrot and stick approach, too. I could pay a bonus for finishing early. But let the builder pay a penalty in the form of picking up some of my construction loan interest once he's, maybe 30 days late. I know builders don't like penalties, but if he misses the "early finish" bonus, then where's any incentive to finish up that last little drab of money from the bank? I almost think a bonus could serve as a dis-incentive to finish once it was missed. And it would all be something I'd present in a "hey, whaddya think about this?" conversation. Trying to be sensitive about it.
It's probably pretty easy to find out what his reputation is for finishing on time. Ask him for the names of some former clients you can speak to about him.
Then, among other things, ask his clients if they had any completion date clauses in their contract and what incentives or penalties were included.
Just because he's won some award doesn't mean he's above that part of the contracting process.
And, if he deserves the awards, he's probably a mature person who would like to hear about your concerns directly from you.
Edit: I agree with treating the crew well but I'd suggest that you plan with the G.C. to have a weekly lunch for everyone or something similar, but planned.
Edited 2/11/2008 7:27 pm by Hudson Valley Carpenter
Gimme the 10k to come over with a cattle prod and keep him Moooo-ving.
Spheramid Enterprises Architectural Woodworks
"Success is not spontaneous combustion, you have to set yourself on Fire"
How's your place mooo-ving along? You haven't posted any photos recently, have you?
Still standing at a stand still.
I have 3 jobs running at almost full steam ahead, so little gumption to brave the elements and tackle much here. Next big event is finsh up the siding and soffits and get a stone guru inside this summer. In the interim I'll tackle re-inventing my ridge fix that was temp. and get the chimney stone started.
About ready for finish floor up stairs right after I get a foaminsulation outfit to handle an impossible otherwise condition.
Now that the big tree is trimmed I can proceed with the wrap around porch, which will be the staging for some rechinking and soffit r&r in the front.Spheramid Enterprises Architectural Woodworks
"Success is not spontaneous combustion, you have to set yourself on Fire"
Three jobs running at once...plus your house? You be busier than a one armed, one legged paper hanger in a azz kickin', paper hangin' contest. <G>
No lie. It's crazy. It all long term work and no one is in any hurry to "git r done" so the pace is mine to set, and I like it that way.Spheramid Enterprises Architectural Woodworks
"Success is not spontaneous combustion, you have to set yourself on Fire"
You forgot to add 'in a huricane'
That contract is large enough to lay all the cards on the table. Tell him about your concerns and ask him how he will insure to you that he will not let the deal drag on at the end.
I don't think asking a guy to take care of business in the manner that they should is worth 10k.
There are lots of legitimate reasons why a house would be delayed and all of them should be discussed if timing is critical for you.
Bob's next test date: 12/10/07
Seems to me its a bad idea, Theres so many things that can hold a builder up beyond his control, who knows if a sub is gonna flake out, Then hes in the position of getting anyone just to finish, I would rather wait and get someone with a good track record.
Building a custom house is tough on both sides. Incentives are good but they can bite you as well. I've seen buliders move at a pace they shouldn't, and things being done out of order just to get them done.
My best suggestion for getting things done is... show up at the job , bring coffee... doughnuts... brownies... soda.... pizzas... Tell subs how wonderful things are even if they aren't, that's between you and the builder. You'd be surprised at how well a happy jobsite works, and it will cost you way less then 10 grand.
Edited 2/11/2008 6:32 pm ET by sledgehammer
My best suggestion for getting things done is...
I've seen this work, from the receiving end. The HOs got a much better than average house from that builder, my employer. No bonuses (far as I knew), but everybody loved working there.
The next house was the opposite, on all counts.PAHS Designer/Builder- Bury it!
$10k would motivate me!! OTOH, if this builder uses superintendents, that is where the motivation needs to go. Guess what my job is :-) Like I sometimes say: "The Builder? My boss is the builder. He has been here 3 times. He got out of his truck once." You tell me who controls the schedule....
Very interesting. Everybody. I can see it all sides and all outcomes. This builder, like most around here, sub everything out. So, it's this crew, then that crew working. Except that he has a site supervisor that's been with him a long time. Don't know how I'd provide incentives to him except for the "happy meals" system. It's 3 hours roundtrip drive for me, so some of it Domino would have to deliver.The builder is going to be the tougher one to keep moving.
3 hours roundtrip? Spend the 10 grand on making yourself as happy as possible.... you'll need it.
Like I said I control the schedule. Sorry but a happy meal or 5 wouldn't motivate me. I probably wouldn't even accept more than once because I might feel like I was being patronized. Do you think I might be more likely to remember to call the plumber 3 weeks before the trim-out if I had a pizza or a plasma TV to look forward to?
Sorry, you kinda stepped in it.
Here's a scenario: Right now I'm getting ready to build 2 houses side by side that burned down (at the same time). This happened last August. I formulated an estimate and my boss (the builder) told me what mark-up to use. He presented the bid to "Customer A" in November. Customer A signed mid January. I'm in the process of getting the plans completed, engineered and submitted for permits. So here it is nearly mid Feb and customer A sends me an E-mail that basically said what the F- is taking so long? I had already explained the process. Do I feel motivated? Will I go way out of my way to do an exceptional job on their house and make it ASAP? - not sure yet... We already gave them some free stuff, then the lady starts kinda demanding more... I'm confused.... I already told the builder about the red flags. He said he understands but that he has confidence in me that I can deal with it. Customer B is pretty much on the same schedule, has been easy to deal with and seems happy as a lark.
I've never seen a custom house where the HO didn't make some changes, hows that going to effect this bonus that you talk about? Will you still expect him to finish in the same time frame if you make changes?
Award winning builders don't mean squat, I know of one in my area, he's really no better then some and definitely not as good as a few. An award does not make you the best builder in town.
If he is a good builder/ good reputation then he's going to want to get your house done ASAP so he can move on to the next one, not really much incentive in dragging a project along now is there?
Doug
I must be missing out on the whole deal here.......pay a contractor to do a job but pay him more to actually finish?WHATS UP WITH THAT!
the last award winning builder I worked for had hundreds of open customer service calls and quite a few annoyed customers when I joined him. If he is good, he will understand your concerns and work with you to put together a contract that is fair and will motivate him to finish as there should be a fair amount of $$ on the table for him when he is 100% complete.
Money is a hell of a motivator!
What and who gives these "awards"... Real estate people????
"Who Gives Awards"
Yep. Their piers and it is never based on customer service.
It is based on the best lots, prettyiest landscaping or decorating, best designs, etc.
The builder I worked for had houses rotting out under the stucco, lots of neglected service, and customers moving in with over 100 punchlist items.
He layed me off after I fixed all that and fired the 2 lame employees. Nice guy, lets give im an award!!
(btw, best thing that ever happened to me, cause I started my own business (broke but happy) and he is still an award winning jerk)
Reading you gents talk about how best to get a builder/contractor to get the job done on time and I couldn't help but chime in. We are our own builders on our dream home project - gratefully on the finishing up end now - almost two years later. We've also tried the "Happy Meal" incentive as well as the $$ incentive. I've brought coffee, donuts, lunch, etc. We've added incentives in our contracts - always adding more days if we make changes and providing for unforseen events, etc. Bottom line: nothing works. Money is a good motivator but for the most part, it just comes down to the character of the contractor.
We had framers who showed up, put in their hours, taking only their proper breaks. We had excavation crews who showed up and spent half the time planning how to do the job and the half on their coffee breaks. We had a painter who came very regularly the first couple days then would disappear for the next few days then he would show up with one guy for a few hours and would disappear again. We threaten to fire him and HE suggested a penalty clause in the contract. He went over the deadline by over a week and still demanded his full contracted amount. We ended up in a shouting match with him calling us names.
One thing we tried to do no matter how difficult the working relationship was to end on a positive note. You never know when something may go wrong and you may need them to come back and fix it. We got lucky with some great subs who took pride in their work but there are others we will never work with again.
Good luck "MtnBoy",
Streamline's DW
Being your own GC you have no idea just how much this sez without saying it.
"We had framers who showed up, put in their hours, taking only their proper breaks. We had excavation crews who showed up and spent half the time planning how to do the job and the half on their coffee breaks. We had a painter who came very regularly the first couple days then would disappear for the next few days then he would show up with one guy for a few hours and would disappear again. We threaten to fire him and HE suggested a penalty clause in the contract. He went over the deadline by over a week and still demanded his full contracted amount. We ended up in a shouting match with him calling us names."
The bank's money is going in first? wow!
The best thing you can do to insure that your builder finishes as expected is make decisions quickly and decisively.
When he needs to know which cabinets you want by x date, have a decision made by x date, and don't change your mind 3 weeks later.
Limit the changes. Redoing work, even when your being paid for it sucks the motivation out of the crew.
The bank is really funding first? Do you own the land free and clear?
Banks don't like their funds out the door to exceed the value of the collateral. Guess you could have it collateralized with other means, none of my business really.
Cheers
TFB (Bill)
edited for typo
Edited 2/12/2008 2:14 am by ToolFreakBlue
beware un-intended consequences.
I would STRONGLY suspect--------pursuit of that $10,000 bonus
might lead to things being pushed along-----which you have almost no way of knowing about----but come back to bite you YEARS down the road--and ultimately cost you multiples of the $10,000
just my opinion,
stephen
Did you want it right or did you want it right now?
Delays happen. Weather doesn't cooperate. A sub who has previously always been great is now having family problems and his work is no longer a priority. Material delays or shortages. A lumber salesmen makes a mistake. Inspection doesn't pass because of a "new rule" that was just put into effect by the inspections dept last month. Etc, etc, etc. If this whole process was automatic, you could order the house off the internet.
National builders can consistently deliver houses "on time" because they have multiple subs for a given trade and their product is cookie-cutter. Although they don't pay their subs well they have tremendous leverage over the subs because of the volume of work (job security) they have to offer, be it true that they don't get the best craftsmen because of the level of pay.In that environment though if the house doesn't get firestopped before it is insulated potentially no one is the wiser and there is no way the construction manager could notice as he is busy "executing" the scheduling of 50 other homes.
Edited 2/12/2008 7:39 am ET by Matt
Let me flesh it out a bit. And many thanks for all your thoughts. Yes, I own the land free and clear. The bank will be funding the first/most of it first because that cuts my risk a bit, though I do have to pay interest on that as the draws are taken. I'm not rushing him with the planning. We've been working with him for 9 months on it so far. I told him I need to be in the house by Aug 1, 08 for $525k. Last Aug I gave him $7K to get a site suvey, do a siteplan, finalize the specs and budget. I think I've been plenty patient.I have so many different opinions now that I have no clue what to do. What I hear from most homeowners is that because builders get the bulk of their money before the finish, they appear to lose their motivation.I can guess that I'm going to have the same problem. Everthing I think of seems to have the potential for offending someone--or being ineffective. Can I make nice with the site supervisor, occasionally giving him a Rockler gift certificate for good work? That will no doubt anger the builder, who will take it out on me by dragging his feet. So here I sit, being nice, respectful, patient. And watching my money dwindle away. Cost of carrying my current home and this property(it has high city taxes and a house on it, to be torn down. Meanwhile it's insured--in case I have to abandon the build and sell it.) We homeowners are often well-intended. We just don't know what to do.
"I'm not rushing him with the planning. We've been working with him for 9 months on it so far. I told him I need to be in the house by Aug 1, 08 for $525k. Last Aug I gave him $7K to get a site suvey, do a siteplan, finalize the specs and budget. I think I've been plenty patient."
Tell me. What are YOU doing? Besides thinking throwing money at the problem will make it go away?
You can get your own dang survey - at a much lower cost.
YOU don't WANT to be part of the siteplan?
Specs? Ain't those your decisions?
You want to inspire someone to work faster, better? Work along side him.
I developed ALL the specs, and changed some after his input. He has all 41 pages of it down to each lightbulb, with a supplier and price and date verified--by me. It's all in CSI format. Yes, he sent me the original site survey. Said the company apparently did not get the memo saying there were to be no changes of level between garage and house (so it'll be wheelchair accessible). So they did their "first cuts" wrong. He sent it back to them to redo appropriately.I'll be very much part of the siteplan, once I get it. It's the builder's presentation to me for my approval--not a done deal. We're trying to site the house without the retaining walls the architect originally said it would require. Cheaper without them.
Then I agree with Jim.
But the "41 pages" of specifications may have something to do with it.
You may have to seperate those into a "more reasonable expectations" and "to be done after the building is finished" categories.
Something hints to me the $525K is not gonna be enuff...
And finishing "on time" is gonna be the least of your worries.
Really, I do wish you luck. But listen to Jim.
Thanks for helping. I'm afraid you may be right. Anyone else want to agree that I'll come out better--timewise and moneywise--to walk away from the $7K now and start looking for another builder?Before I do that, any ideas on a last-ditch effort to save this relationship?? (Dr. Phil?)Start exploring my options while letting him move along at his own pace? It's a big city, but a small world among these guys, so he'll undoubtedly get wind of those inquiries. Egos are so fragile.Give him a deadline that we need to start, or so sorry we'll have to find someone else?
You're really not walking away form that money - yet.
You'll receive site plans and other engineering that will have value to the next guy, and thus your project. Or at least you should.
You need to provide the concept of competition to this fellow. Therefore, it's time to bid it again.
Well, I MIGHT receive those services. Within my lifetime--or not. With no deadline in my services agreement with the builder, I would have to litigate it to get a judgment that his schedule was unreasonable. (More lawyer fees!)I think, though, that I will try to keep open the option that he will be my builder. And thus, the possibility that I will get the site plan before the next guy needs it--if I have to go on to the next guy.This fellow is such a bigwig in his local trade assns. that he's unlikely to learn anything from me. Me--I'm a nobody.
"Before I do that, any ideas on a last-ditch effort to save this relationship?? (Dr. Phil?)"Yes. Print out this thread. Set a face to face appointment and set it on his desk. Have the heart to heart talk. Set the goals and expectations. Demand that you get your due. YOu are spending 525k. Act like it. Bob's next test date: 12/10/07
August 08? That's gonna be tight on what I assume to be a custom house. I'm not sure that is entirely realistic, although it is doable. I'd put the construction time for a homes like I'm guessing we are talking about at 6 to 8 months miinimum. Is the house permitted yet?
Can't be permitted here till we have the siteplan.I think we all know there's no way I'll be in by Aug. 1. Builder says 7 months.
Did you receive your services from the builder, as outlined in your written contract, when you handed him the 7k? That process should have taken him 2-3 weeks. If you didn't get good service upfront, it ain't gonna happen later. Fire him now and find a motivated builder. You have the cash, use that leverage. Don't be a sucker. Your 525k represents a about 100k worth of service from the builder. If he's not excited about earning that and working for you, find another builder. Bob's next test date: 12/10/07
Edited 2/12/2008 11:13 am by Jim_Allen
I do incentive clauses a lot on comercial projects I manage, and always have liquidated damages, and they work very well, but are seldom worth the monumental pain they are. $10k is more than enough. You would be amazed how hard large GC's ($200-500 million/year) will work for less than $10k on a $5 million contract.
Things to keep in mind though are: what is completion? CO, partial or temp CO, Punch list, Punch list completion, delivery, and what is the exact date that happened or could have happened. Then the real pain comes in documenting everything. How much time does every change cost, how much delay did weather cause, were holidays and weekends accounted for in the original contract time, how long did submittals take to get returned....
If you can't be on the site or have somebody you trust that is not involved in the deal on site everyday I would say don't even think about it.
Thanks for your input. I was thinking about all those definitions of "completion" you listed. I had already thought about the contract language being something like "bonus will be earned if Certif. of Occ. is obtained by (date), but not due/payable until the entire punchlist is completed." I WOULD be able to tell when we got the CO and when the punchlist was done.The more I think about it, the more I can see the very negotiation of that clause slowing the contract process down another few months. And increasing my lawyer fees.
The money was for him to provide those services. Unfortunately, my own idiocy lead me to fail to notice that there was no deadline. The money is non-refundable. But, if we enter into a building contract, it will be applied to the build.At this point, I have to guess which will take longer--sticking with him or going through the tedious process of finding another builder. And, importantly, I'd say the majority of custom builders here do NOT contract for a fixed price build. And I don't want to do it cost-plus. Talk about not sleeping nights!
Custom 1/2 million house done in 5 months?
Good luck, you'll need it.
Yes, I know that won't happen. Builder's latest estimate was 7 months.Don't let the price tag make it sound like something it's not, though. It's only 2800 sq. ft. (heated), 3800 under roof. One story, slab on grade. Main roof is a gable with two intersecting gables for garage and screen porch. Brick veneer. This is not a fancy house. My money is going behind the walls and in the systems. Full Icynene insulation. Infloor radiant hydronic heat. Backup central HVAC. HRV. Whole-house air purifier and water filtration. No granite countertops/stainless steel applicances; no fancy ceilings; etc.Floors are $3. sq. ft. ceramic tile. I'm bringing my current stove & fridge with me. Like I said, it's not a fancy house. It'll be certified by the American Lung Assn. under their "Health House" program, which means I'll pay about $3K for independent third party performance testing on it.Builder said he'd be happy to go into the build with everything fully specified and all selections made--no allowances. That's why I've done all that already. I don't want any change orders except if a manufacturer has discontinued something in the interim.
I really appreciate everybody's thoughts and help. Before total boredom sets in, does anybody have any last thoughts about what my next step with this builder should be? I want to make one last attempt at it, for the many reasons I've mentioned already.Should I put this out to bid with other builders before I burn any bridges here? BTW, custom builders here rarely do free bids anymore; the custom market is not in a slump and we were never in a real estate bubble. I've heard $1K to prepare a bid.
ego or not, money is money. I've never been insulted by bonuses.
Setting up a payment incentive sounds okay, but I would set it up more like: Finish on set date 10K, and it decreases by $100.00 per day after that. As a builder I would never agree to a fine if not completed on time. Aside from the obviously delays like weather I have found that the homeowners delay the process more than anything does. I.E. not picking out all the products necessary to complete a house. If you haven’t built a custom home you may be shocked at how many decisions have to be made. Most of my customers work with a decorator and are still overwhelmed. The more you can put on the prints the smoother it will go.
Thanks for giving me your opinion as a builder. What if the bonus were $10K, but it decreases by the actual amount of interest payments the bank is charging me day by day? I pay interest only till the construction loan is converted to permanent financing, but by finishing up time that interest payment will be almost as much as a mortgage payment.So it wouldn't be a penalty to him, it would just be a reduction of his bonus.At what point in the contract negotiation should I bring this up?
>>What if the bonus were $10K, but it decreases by the actual amount of interest payments the bank is charging me day by day? I pay interest only till the construction loan is converted to permanent financing, but by finishing up time that interest payment will be almost as much as a mortgage payment. <<
It could take 3 months for that $10k to be eaten up.... I don't think that schedule is advantageous to you. I'd say set a realistic completion date and then have the bonus reduction schedule "expire" in more like 1 to 2 months max.
>> So it wouldn't be a penalty to him, it would just be a reduction of his bonus. That part of it makes sense. << That part makes sense.
Sounds like you need to put his feet to the fire. First tell him you need copies of whatever documents have been produced thus far for site survey and whatever else it was you were supposed to get. Once you get whatever you think you can - short term - start talking to some other builders. If you have the plans and the specs minus a complete site plan - but somekind of site plan, I'm thinking other builders will recognize you as a serious customer and may not need the $1k to even look at your project. If he really is in the old boy network, the news will probably get back to him. After you get some feelers out tell him you are going to walk if you don't have a signed contract within x # of weeks that includes the 7 month completion date and the bonus schedule if that is what you want to do. This guy didn't build a successful business on letting serious customers with $$$ walk...
Regarding my previous comments about the bonus being shared with his super - if he is a stand up guy he will share it with his super - again his right hand guy didn't stay for so long not getting some significant $$ perks. My boss "shares", and BTW I get a copy of all contracts so that I will know what all the stipulations are.
It's a little hard for me to believe that changing the level of the garage is that big a deal - unless your site includes some extreme topology. Ninety-five % of what I build doesn't even have a site plan other than the plot plan that I draw in about 1 hr - no site topo is shown on those - granted I build on city and subdivision lots though...
One other thing...
We all know that there is 2 sides to every story.... What I hear from you is that your sick and tired of this guy messing around and that you just want to contract to build and have a defined end to this project. Based on how long this has been going on I think you have a right to feel this way, although I didn't quite get what you paid the $7k for.... OTOH, are you sure you haven't been somehow delaying this process yourself? ... making things too complicated... having a lawyer involved already... 40 page specs... who wrote those - you or him? Are you sure he isn't seeing red flags?
Thanks for your assessment of the finances. You're right. I'll shorten that bonus earnings time.As to the lengthy specs, that was at his request. I had given him just some summary info. In August when he said $575 and I said "can't do it", he said that there was a lot of fluff in the budget to cover allowanced items and the unknown. And part of the unknown was the siting of the house. We, and the architect, thought it needed retaining walls. He said they're so expensive, it's cheaper to hire a survey company that can show us how to site it without them. So, that's what we let him do.He also said he could get more "fluff" out with all the specs and selects done. By us. So, that's what I did.He said that the build will go quickly, in part because of all the work we've done upfront. I gave him dimensions and scaled drawings of the interior woodwork and that sort of detail. I still want to believe he's right about that.He has freely admitted to us, last fall, that he had been remiss in not getting off his duff. There are some things, like the radiant heat, that he has never done before. And he said he wanted to learn more about it. Despite talking to the radiant heat guy I've talked to several times and suggested he use to do the design and maybe the actual install. But he said he still wanted to learn more. So I had amazon deliver him a copy of Siegenthaler's book. He said it has some useful diagrams in it.I'm not trashing him. He is my builder of choice because of his product and his knowledge of building science. I just don't know if I can hold out financially till he learns all he wants to know.Last night I emailed him asking for a status update and timeline on getting the site plan and budget/bid. Also, he builds under 2 companies and does some spec work. We hired his initial services with the newest one. It occurred to me that it might have cashflow problems. So, I told him like, BTW, it doesn't matter to me which company you build the house under. If that's been the holdup, maybe my message will clear up that.Many thanks to you. And everybody else. I'm like a fish out of water here. Not my line of work.
I meant to add that I have taken your advice, and that of others here, and last night I made a short list of prospective builders and a short summary of the scope of work to send anyone who responds with interest in bidding.I'm holding off on sending out those solicitations to bids till I see what I hear back from my guy. And when. The ball is now in his court. Or was it there all along?
One more pice of info: I've heard nothing from him since Dec. 12. I sent one "how's it going" message. Then a week ago I sent a "could I get a status update" message.I'm trying to leave him alone to work. I did check the local obituaries and didn't find his.
Edited 2/13/2008 9:24 am ET by MtnBoy
You've lost your money.Better find another builder. Bob's next test date: 12/10/07
I feel really slow on the uptake here. If you only knew all his "professional" affiliations and such, you might be nearly as astounded as I am.Thanks for all the advice.
might be worth a day off and drive to his office.
TFB (Bill)
With or without my Smith & Wesson?Just sent some stuff to my attorney about it. I don't want to waste any money on legal fees. My real concern is what if this guy's business is in trouble and I'm the last to know? That's about what I told the attorney. I get a Dun & Bradstreet update on him periodically, for what that's worth. Sent it to the attorney.The other thing is how to prevent this from happening again. I'm not rich; this is huge for me. I always do my homework. Get customer references, banking references, supplier references, reference references. Everybody always checks out. People always say to ask your friends about their builders. I don't know anybody that's had a house built. Three mortgage loan bankers I talked with won't give me any builders' names (everybody's afraid of recommending a flake and getting sued these days). Lawyers won't give me any names.I got this one off the local home builders assn, where he's a past officer (3 times) and a lifetime director. Won this award; did that showhouse. Maybe he's just real busy.
"I got this one off the local home builders assn, where he's a past officer (3 times) and a lifetime director. Won this award; did that showhouse. Maybe he's just real busy."That's one of those titles that you get when they ask for volunteers and everyone else takes a step back. Bob's next test date: 12/10/07
probably best without the S&W.I know of a state president of a builder organization that was not the most ethical/honest businessman.TFB (Bill)
I'll have to take it out of the car, then. It is my favorite traveling companion. Just in case I can't run away fast enough, you know. I'm not prone to attacking people.
LOL
TFB (Bill)
Once you get rolling, if you pull it out to knock out a coupla varmints on or around the construction site you will undoubtedly have some guys calling you sir... :-)
Thats what I said earlier. Sit across the desk and get things settled man to man. I already know that I wouldn't deal with the guy. He was handed 7k for a two or three week process. I'd be standing up at his association meeting asking why he can't deliver the good and why he won't answer the phone and I'd ask for a 7k refund right there in the meeting with his big shot honcho friends. Bob's next test date: 12/10/07
BTW, I just discovered that his supervisor left him last spring to become a partner in a deck building company he'd been working for on weekends. But "my" builder still shows him as super on his website. Small point.I'm wondering who's supervising his construction now. Sure would like to talk to the super, but I don't wanna get sued for--well, for anything.
>> But "my" builder still shows him as super on his website. Small point. <<
Realize that many builders aren't real computer savy. Very possible that the web site is just outdated. Here I think many builders just feel they have to have a web site, but don't have a clue about what is a good web site, user friendly, required maintenance, etc, etc etc. Large regional and national builders have IT departments, etc, which is a whole different thing...
In response to your question the earlier the better. You need to be up front with him. If you can not come to an agreement you are wasting both your time and his.
No matter how long until you break ground it is time to start picking out your products. Start with the exterior: windows, exterior doors, exterior locks for doors so doors can be bored at the factory, soffit, fascia, exterior finish [brick, siding, etc.], roofing material, location of exterior lights, outlets, sill cocks, overhead garage doors, gutters, etc.
Good Luck!
I've selected it all except the color of the roof shingles (I know the manufacturer and type, therefore the price) and the brick. He's had all that for months now. I'm ready to build. He's got the switches, the entire electrical plan, how high the light switches go--the works.I'm going on a long tour today. Been doing some online research at the tax assessor's site and the city council meeting minutes and so on. To see how his other properties stand, what he bought when and what he sold it for. I think he's too busy making a killing off the land he buys and builds on. I've cut out that bit of profit by owning the land. He wants to build for me, I think, as a marketing tool. He's got a new company (he has 2) building a new type of housing. Other than the big showhouse he built under it in 2004--and hasn't sold yet, mine will be the only other one. I think he might not have the cashflow to build it within that company. So, he's dragging his feet.Going on a drive now. His fax number was disconnected yesterday. Gonna see if there's a foreclosure sign out front--his office is in one of his latest new builds, which he also lives in.
Edited 2/14/2008 8:23 am ET by MtnBoy
>> I think he's too busy making a killing off the land he buys and builds on. I've cut out that bit of profit by owning the land. He wants to build for me, I think, as a marketing tool. He's got a new company (he has 2) building a new type of housing. Other than the big showhouse he built under it in 2004--and hasn't sold yet, mine will be the only other one. <<
A lot of home buyers and real estate agents seem to think that builders make money hand over fist. Not in my experience...
Here we strive for a min of 15% gross profit - that's before anyone - me - my boss - the book keeper, receptionist, etc, etc gets a paycheck. Then there is the office costs, insurance, etc, etc. I've talked to my boss about this and he says that overhead is a hard to thing to nail down - especially with all the different stuff going on out of the office... but that he guesses that if we gross 15% we might net 3%. not too respectable - hu??? A few years back I built some houses that grossed 25%. Everybody LOVED it and I got a good bonus.
Big builders are driving a lot of this. Maybe one super with 3 punch/warranty guys are turning 40 "units" a month.... All they gotta do is gross say a few thousand a house. OH - and they have 10 supers in a state doing this. Every gets paid including the IT department I talked about above and VPs go to the Bahamas for "meetings" and they still have plenty of money to buy commercials on TV. Buyers get cheap square footage houses that a super may never have even set foot in... and are just thrilled about "all the space we got for our $$$".
Now we are in a down building market. We have ~$5 mil of spec on the ground... The carry costs must be staggering.... "home buyers" come buy and try to buy something for say 15% off.... and think we are crazy when the big guy says no...
If your guy has been carrying this "showhouse" for almost 4 years it's probably killing him. Sounds like you already have an idea ho how much construction loans cost. If it's a million $ house it could be costing him $7000 a month - that's $84,000 a year!!!
Sounds like his new company might not be too stable.... Maybe he spent your money on other bills...
Regarding >> he's too busy making a killing off the land he buys and builds on << Maybe, but most people have no clue how much land development costs can be. Sounds like you might have a clue - with this lot you are dealing with... Anyway, right now I'm working a neighborhood that started with around 20 acres for something like $400k. The development costs were supposed to be around 1.9 or 2 mil $. Then they hit rock and spent another .6 mil $ on on rock removal.... Messed everything up... So, add in a bunch of interest they ended up with very ~ 3.4 mil $ in 20 acres....
And people ask me why I don't want to be a builder....
Yeah, I'm worried about his financial stability. Yesterday I did a bunch of gumshoe work, internet and riding around his holdings and previous builds. Got one homeowner to call me and talk about it. She said he was a great builder; has lived in the house 2 years. (I just left her a love note, admiring her house; thought I'd get more honesty than you do when the builder gives the homeowner as a reference. I'm always afraid they still have outstanding callbacks and don't want to aggravate their builder till they get them all done).He had demo'd a small house in a pricey neighborhood for this lady. I checked the property records. My guy's wife bought the property a few years back for $345. NOT $345K. Must have been a tax sale by the city. Property records show the homeowner bought her place for $1.2 million. He probably did pretty well on that one.I nosed around in city council meeting minutes and a lot of places. He does his politicking well. Got his city council member to get a property he owned in unincorporated area into the city. I used to live down there. He got it into the "right" school district, from a questionable one. The big showhouse has an "Under Contract" sign on it. It's the only other house I know he build under his newest company. So, that might move things along. (He coulda just told me that. I understand cashflow problems.)I was down there half the day yesterday and never found him or his truck at home or at any of his properties. Maybe he's wintering in the Bahamas, or On Holiday, as the rich like to say.Might be cashflow problems. Might be he's getting out of the building business. Here builders have to get licensed (or grandfathered in) by July 1. New law. Maybe he doesn't want to get into that.Or, just maybe, he does too well building on these properties he owns to mess with the small-potatoes profit he'd make off mine. My money is there for now. Gonna poke around a little more into his doings till I figure out how to find a decent builder.
Put your boots on and walk around houses that are under construction. Talk to the tradesmen. They'll tell you what you need to know about the builder. Bob's next test date: 12/10/07
Great idea! thanks.Just sent an email inquiry to him at his new company's email address. Used an acct. he won't know is me. Asked about current projects, what's for sale, price range, etc. I wanna know if he's talking to new customers and it's just me he's ignoring. Here's the thing: although he won't make his customary profit off my build, you'd think these days he'd go for me carrying the land while he builds on it, wouldn't you? Just called his office phone, using a cell phone number of mine that he also won't recognize. It's still connected with his answering machine message. So, just his fax number is disconnected.Gonna get a side job as a private eye after this.
Keep your camera handy too (along with the S&W). Might find some "leverage" to help recoup the site plan costs. Like when you find his vehicle in the parking lot of the Empty Arms Hotel.At some point you will be better served to devote your time and resources on locating that new builder vs. chasing the deadbeat. Don't get me wrong, I'd be looking for him as well right now, don't hesitate to shift gears when your gut says "enough with this guy, lesson learned".Though, you did your homework on selecting him, I guess the only lesson learned is put completion time frames in your agreement/contracts. What else?TFB (Bill)
What else? Mull it over a long time when something seems too good to be true. At the time I did ask myself why he'd be willing to work for s relatively tiny profit on my house when he was used to the bigger fistful of dollars. I thought I had the question answered in that he wanted to build another of this new type of house under his new company. Apparently he did--then.Yeah. I still have one foot in each camp--him and the next guy. I still want to see if he responds to what he thinks are new business inquiries. If he does, then I have my answer for sure. It's just me and my pitiful offering!
Here's the update on my little soap-opera here. Called the draftsman my builder hired to do plans for the building permit. He said he hadn't been getting messages returned either. That he's worked with this guy for years and that was unlike him. He got in touch with him; gives me the message that the builder will give him the updated topo survey info this week, so draftsman can finish up the plans. And that builder says he'll get in touch with me.Here's the BIG NEWS: draftsman says this builder got caught up in the building slowdown here, like most builders. That's why he's dragging his feet. So, I take it he doesn't have the cash/cashflow to start my build. We'll see. Now I'm afraid to use him. But, I've contacted 2 builders since then, 1 big and 1 small, and no one is getting back to me. Maybe they're all caught up in "don't have the cash to take a job; don't have the jobs to make the cash."Who'da ever thunk I couldn't hire a custom build done when everyone's needing work?! I have no clue how to get this done.
"Who'da ever thunk I couldn't hire a custom build done when everyone's needing work?! I have no clue how to get this done."You contacted 2 other builders. I would contact 50 other builders in 25 days or I'd stop when I found one that was worth talking to.If they aren't promptly returning your calls when you are a source of income, then you certainly won't get them to answer when you have a problem to solve and it is going to cost them a few bucks! Bob's next test date: 12/10/07
I don't want to go through all this again, so I'm looking for a way to pre-screen builders before I contact them. Did that before, but looks like I did it the wrong way. What I need to prescreen them for in this building economy must be financial soundness FIRST. Then how I like their product and whether they want to build my house.Got a lawyer who heads up the real estate section of the firm I usually use looking at the Agreement for services I signed with the current builder. I also asked the atty. for help with finding builders and assessing the financial side of builders. Don't know as he'll do that; nobody wants to recommend anybody these litigious days. But his firm does a lot of work for all the major banks (I've talked with several of them) who make construction loans. So, if I can get a steer from him, it should be a reliable one.Then, you're right; I'll go for quantity. That's why I called the draftsman. Asked him if he'd finish up the work my builder hired him to do, but do it for me personally instead. Told him I might be looking for a new builder. So, that should get back to my guy; then I'll see what the heck he says for himself.
One more thing: I don't trust my own judgment anymore. I do my homework on these guys, but I've made 2 bad choices already. The first builder, recommended by a prominent bigcity architect here, and with excellent references by 3 homeowners, a banker and his major supplier. He wanted to design my house from my drawings for $3K. So, se look at the land, talk. Then he gives me a contract for the drawing, but it requires me to also execute a contract for him to build it. My lawyer says No Way. He's not an architect or a designer; his drawing might not be acceptable to you. I tell him that and ask if he'd be interested in my build once I get a plan done. He gets mad and tells me no.I'm not doing too well, despite working really hard at it. See why I don't trust myself anymore?
"I'm not doing too well, despite working really hard at it"You might be working hard, but are you working smart?How many framing subcontractors have you talked to, on a current jobsite? How many plumbers? How many Electrictians? Go find a well organized jobsite and talk to the real builders. They'll tell you which paper builder you should choose. After you get several qualified suggestions: interview the builder. After you find a builder that jives with your desires: check out his finances. The guys in the field will know and they aren't afraid to tell it like it is. If a builder isn't paying promptly, they'll tell you with no holding back. If the builder is paying, they'll tell you if the guy cuts corners. Most tradespeople work for several different builders and they'll send you to the good one. Bob's next test date: 12/10/07
I'll try your approach. This is a huge metro area, but just found the online lists of building permits issued for several of the jurisdictions near my property. I'll find addresses of current builds and go stomping around some. I know you think I'm slow. And I appreciate you hanging in there with me while I learn. Already ruled out 2 big production builders. Don't think they'd build on my property anyway. But sure don't like to see on their website a form where homeowners can fill out a warranty service request online. If I live in a house they built, I'd be hoping for more personal service than that. So, I hope some of the smaller, truly "custom" builders are still working these days.
The production builders won't do custom jobs. They aren't geared for it. You might be able to get the site superintendent to build one of their stock plans on your lot though (we framed one like that).Some of the trades on these big productions site also do custom work for custom builders. Ask them. They won't bother trying to steer you to the production builders if you tell them you're interested in finding a custom. Bob's next test date: 12/10/07
Another of your good ideas I just printed out. I've got my own plan I really want to build. But absolutely, the tradesmen are going to work for a number of different builders. Working on my list of current builds to go see. Interesting to poke around in the city building permits issued. It's like a look into the future.
"nteresting to poke around in the city building permits issued. It's like a look into the future."I always meant to do that to chase frame jobs, but never did. Maybe I shoulda checked into it when I got slow eh?
Bob's next test date: 12/10/07
I think it is time for one of us that is not busy to move to ga. seems like an awful lot of trouble to get a house built.
I'm thinking that myself. Just got the nicest Dear John email from a prospective builder. I sent him the project summary info. last week. Said he's too busy to take it on and be able to give the level of service he likes to provide. I'm touched.
>> I'm thinking that myself. Just got the nicest Dear John email from a prospective builder. I sent him the project summary info. last week. Said he's too busy to take it on and be able to give the level of service he likes to provide. I'm touched. <<
Sounds like a pretty professional thing to do... as opposed to just not returning your calls, etc. Maybe he saw some red flags...
You mean like the moat with alligators? The kennel of pitbulls next door? The neighbors who sit on their porches cleaning their shotguns and don't take kindly to strangers?Could be. I really don't see anything in my project summary that could scare anybody. Well, if they're not familiar with some of the newfangled systems and are afraid to learn. That could be using Icynene insulation; hydronic infloor radiant heat. Could be the fact that it sounds like either an architect (negative) or an informed homeowner (ok, that's debatable at this point) wrote the summary. Am I scaring builders? Should I remove those scarey words? Earthcraft builders here, which is all the ones I'm approaching, are familiar with the use of Icynene. No one knows about hydronic radiant heat. It's not used here except up in the mountains. I have a certified installer/system designer; I provide that referral. The builder just has to hire him. Maybe I'll remove all the scarey stuff. And act as dumb as I apparently am.
What do you mean when you say "earthcraft builders"?
As a general rule of thumb, we don't use our customer's subs. We don't have any "hydronic radiant heat" subs so that might be an exception. Not sure why, but every time I've worked with a sub brought by the customer, it results in delays. Maybe it's because right off the bat there is a little confusion as to who the sub is working for.
As far as building on someone else's land, if there is a real negative to it, I'm not aware of it. I'm gonna have that conversation with my boss... We can make money at it. I'm doing 2 homes where the HOs owns the land right now. Actually it's a very safe arrangement. It's not like the HO can back out of the deal like one house we had (still have) last year... - they couldn't get financing. The payment schedules on the 2 are set up so that we get paid as work progresses, the schedule slightly favoring us, but once you factor in the delays that will undoubtedly be caused by the banks beaurocraicy the situation will probably see-saw between them owing us money and us owing them work. Besides, if the money stops coming, we stop coming to work and go file a lien. On one we got 20% up front, the other 33%. We did have to do some (perconstruction) work before getting the first $$$ though. The only real variable is how good were my estimates - each is to be built for a specified price.
And no, I don't think you are dumb. I'd welcome the opportunity to work with a customer who actually has some idea of how homes work. With 90 % of the customers I have I offer them an upgrade from R-30 to R-38 insulation in the attic, for a couple 4 hundred bucks and they would rather have "crown molding in the master and sitting room". :-)
OTOH, (I'll try and make this brief) I spoke to a potential customer yesterday - He says he is interested in getting a house on one of the lots we have downtown. Very hard to acquire lots - lots in high demand. Then I remember that I went thorough this with the guy 3 years ago - he wanted to have a master down in a house that I had already framed... Master was up. First thing (yesterday) he says is that he undoubtedly wants to make changes to the house plans that we have - the plans that it took us 3 months for the city community development people to approve - a house that is limited to $200k by the city. Then I say "hey - aren't you the architecture student from several years age". He says "yes, only now I'm a registered architect" (that was the term he used - I'm not really sure what "registered" means but I do know what licensed means...). He starts telling me about the project he is "building" now etc, etc, etc. Then he starts telling me that he tried to have a house built by xx builder last year but couldn't come to terms - BTW - I know this xx builder. Then the guy starts getting really pushy with me after I just told him that I have one more thing I have to get OKed by the city and it will take a week. RED FLAGS! I relate all this stuff to my boss. Boss says: "Matt, if you were to misplace that guy's phone number I wouldn't notice". This in a down building market...
I'm thinking that what it comes down to is that as a builder we need to maintain control of a project - if we are to make money at it - one of the main reasons we go to work every day. I can stay home and be hungry.
I don't know.... maybe the budget you have for your project is unrealistic... Really though, I think you just had the misfortune of getting involved with your guy during a bad time - when he was going through financial problems - you got sucked in. It happens.
OTOH, I'll say this again. I don't know where you get this idea that builders make $$$ hand over fist... You have know way to know what any builder's expenses are. During the 3.5 years I've worked for this company the most money we ever made on a house I built was something like 27% gross profit. I think I explained all that before.
BTW - your guy lost his a$$ on the show house. All the signals are there....
"Earthcraft" is one of the green building programs locally; they train builders/tradesmen; test and certify homes for energy performance. Hydronic guy is not someone we either recommended or require. Just that almost NO ONE here does it, so we contacted manufacturers to find certified installers. This guy gave me a lot of free time, helped me learn about it. Thought it might be a starting point for a builder, doing some legwork for them.I agree with you about me owning the land seeming really safe. I guess if you're a high-risk guy, used to making, what 1/2 million on your average build because you own the land, then making maybe $100K off my build isn't gonna look so good. And maybe sure-things aren't very exciting--to those highwire guys.I haven't given a budget to anybody I've inquired of, so they can't be backing off because of that. I do have an idea of what it should cost. Current builder told me $575K and I said we have to get that down to $525. That's when he asked for money and we started working on detailed specs so he could get bids and try to get the "fluff" he said, out of it. He defined "fluff" as his padding since he'd never done some of this stuff before and didn't know exactly what it would cost. There's a teardown on my property and my guy did send me a copy of the first bid he got on that. You're absolutely right. I have no idea what builders make on their houses. I just know that here I am, bank loan approval plus cash in hand, trying for all this time to get a guy to build me a house. When building is down and if I was so profitable, looks like he'd be moving along a bit faster.I was trying to say that I'm thinking a lot of builders are making money off their real estate, but maybe that's not true either. So, why not build for me, on my paid-for land, that the bank pulls into the project and holds claim to during the build. Where is the excess risk? I don't know where the profit is. I'm not a builder.What's interesting about this all might be that a down market for building makes it just as hard for a homeowner to get a house built as it does for a builder to survive.
Edited 2/20/2008 9:14 am ET by MtnBoy
Not a builder....but I think you have a rather skewed idea of where builders make money (ie from the land and not the building). Regardless,... as a new reader to this post I also cannot imagine why you are even remotely attached anymore to the idea of using the builder that most of this post has been dedicated to. Even if he suddenly appears ready to go ahead, I hope you are rational enough to tell him to forget it. I think you need to be insistent in asking to get the work you paid for (the time for nice is gone ). Even if you dont get any real value for your 7 grand spent.. move on.
I am in the process of building also (very similar budget to yours). I owned the land already. I chose the builder after picking out most of the materials etc ( like you ). I talked to various trades I came across. I talked to brick suppliers etc... along with others who had homes built recently. From those conversations I began to hear recurring names of builders that were held in high regard by most, and I simply contacted those builders. I spoke to three of them and got an idea of how they felt about doing my project, and how willing they were to have me working closely with them. One of them basically told me that he did not want homeowners on the job site because they tended to impair him from doing the project his way ( I did hear this about him from some of the folks I had spoken to, so I had an idea that this may be the case - but everyone did say he builds a very good home). He did not want to quote against other builders either... so in the end I decided he was not the right fit for me. In the end I did not actually get builders to price the house so that I could compare prices. I chose the builder from my research and conversations with him. Then I asked him alone to price the house, after which I told him he had the job.
The builder I chose of the three was easy going about having me being involved closely ( I am building some of the built in cabinets etc, and I had priced and directed a particular sub for the ICF basement myself)). The house should be finished in about a month and a half (we started end of september), and the whole thing has gone very well for I believe both sides.
Where I am... home building is enjoying a very strong market and finding people to do work is very challenging, but just ask around and keep asking until you start to feel you are getting some good names. There is no reason in the world to use the builder you started with, in fact he has demonstrated very clearly why you should not use him.
btw... I think the idea of the incentive is a terrible idea for many of the reasons already outlined by others. Just pick a good quality builder.. period.
Kivi--thanks a lot for joining in here. Can you tell me how those conversations got started with trades and suppliers? You went to a brick supplier, looked around, and said "Hi, I'm Joe and I'm building a brick house. Know of a good builder?"
Are you scared to walk onto a jobsite?!!!!If you go to a brick supplier, you'll find guys on hilos who load trucks. If you go into the office, they'll dodge your questions because of legal liabilities. I'm beginning to think there is more to this story than you are telling. From my point of view, you are beginning to look like one of those guys that don't listen. So, if I was a builder, I'd quickly pick up on that and most likely, I'd not take your job either. I would tire of the nonsense in the first fifteen minutes of our conversation and I'd certainly not want to enter into a six month relationship of me repeating the same sensible, logical, easy solution over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over and over.The guy probably took your 7k as payment for his wasted time. Bob's next test date: 12/10/07
Just picking up on what Kivi suggested: go to brick suppliers. Your point has gotten across. We're not all good at the same things. And yes, I'm intimidated at walking into a totally unfamiliar situation where I know virtually nothing. I'll find suppliers and jobsites. And I'll go say, "Hi, I'm Joe. Nice work. Who's the builder? I'm looking for a good one who also takes care of business."How bad can I do?
It's time to end this thread so we can all get back to work. I just want to say thank you to all of you for giving me info. and good advice. I'll try to make you proud you sent me out there.
Once you get out there, you'll find that some tradespeople will yap and some won't have time for you. Hang with the yappers. I've had hundreds (maybe thousands) of people walk up to me on sites just to chat about things like this. On days when I need a break, I yap it up. On days we are pressed, I give short answers and excuse myself. You'll find a good groove after one trip.One tip: bring a set of plans rolled up. Every contractor onsite will view you as a potential client and if the economy is slow, they WILL FIND TIME FOR YOU. You are far underestimating the power of your money. Bob's next test date: 12/10/07
Thanks. I'll have the plans poking out of my jacket. And I do hope money talks.I also just made an appointment for next week with a "true" custom builder (no spec builds) that was on the list my archy gave me a year ago. I'm afraid these guys are too pricey, being as the archy uses them. But maybe there are different prices for different times. He asked for a meeting, at my land, with the plans. Real plainspoken, no BS (can I say that here?) guy. Welcome relief that part is.
damn...... why don't you move to RI and i'll build it for you ?
Mike Smith Rhode Island : Design / Build / Repair / Restore
Or, you could finish out a cold winter here in the sometimes-balmy south. It's a sunny 66 degrees and I've been washing out the birdbaths in my shirtsleeves.
There is also different prices for different quality and more certainty in outcomes. I am encouraged you are seeing the one the archy recommended. often times i my experience as the builder in those situations I can save money precisely because I have worked with the archy before. I don't need to add in a bunch of $ for the unknown quantity and I have a feel for what changes he will go for and which he (or she , sorry ladies) will not.
They can't get your Goat if you don't tell them where it is hidden.
She had given me an abbreviated name and it wasn't this guy or anybody who did what I need. Coincidentally today I ran across the right name. We talked in some detail on the phone and I liked his thoughtfulness and just his way. Not pushy. Not slick.
So, looks like a good candidate.
How did I get the conversations going :
I wanted to make many of the decisions about the look of the house etc.. prior to talking to prospective builders so that I could reasonably well articulate what I was looking for. So, I went to my local brick supplier (who I know supplies many builders in our area) and simply said I was planning on having a house built and I was interested in looking at the various possibilities for my brickwork. After them spending some time with me showing the various options, the question of who my builder was came up. I simply said I did not have one yet, and asked if there were any names of builders that they felt did particularly nice work. Obviously these suppliers are not going to want to say bad things about any of their builder customers so, I made it clear that I was not looking for them to tell me who to avoid because they are crummy builders. Instead, I simply asked if they could point out a few names of builders they respected, and thought were worth talking to.
The local building supply company was also a logical stop for me to look at door styles, flooring etc.. While brousing the store, I tried to get a sense of the senior people working there...and pursued similar conversations with them. The local window suppliers.. same idea there.. I needed to choose my windows.. and the conversation about builders was, as usual, a discussion.
I went to real estate open houses..and would ask about the builder of the home.
I did the same at the plumbing supply place since I needed to choose bathtubs, showers, toilets, sinks etc.... it became a pretty natural part of my conversations with these people (trust me... I am not a natural conversationalist, nor am I in any way an outgoing personality who is quick to start a conversation with strangers). In these situation however, it is a very logical and pretty easy conversation to have, or to work into.
I wanted a gas fireplace so the local Heating and Cooling company was a logical place for me to go also.. I think you begin to get the picture.. I just kept asking as I went around to various supply places.
I understand what you're saying. I couldn't just see those conversations starting abruptly out of nowhere. You're pretty smooth, incidentally. That's real helpful. I can do that.
Your story is the way it should work IMO.
They can't get your Goat if you don't tell them where it is hidden.
Mtn Boy
You are overthinking this
Move on. Get your stuff. If he doesn't give it up it's only 7k. Better than 525k and a bunch of liens
If his ego is to big to except a 10K bonus that has no stipulation of liquidated damages if not finished by a certain date I'd question his sanity.
Funny! I've heard of making people tell the date and who's President to judge their sanity, but now we've got a new test.Well, I haven't offered that bonus to him yet. I can't. Because, as anyone who'd been reading this knows, I HAVEN'T HEARD FROM HIM SINCE DEC. 12.I saw that his big Showhouse built in 2006 is finally under contract. Now, that can go one of 2 ways (if it actually sells): either he'll have enough cash available now and will want to start my build. Or, he'll have too much cash now and won't need to work for my meager offering. Hard to know.He'd be a definite candidate for the bonus offer for finishing up, though. If my experience has been representative of his typical behavior.
I don't understand why you think he needs to sell something to fullfill your contract. When you sign on the dotted line, you will be providing the money to build in the form of cash or credit. You represent a cash influx to the builder, not a liability. Bob's next test date: 12/10/07
I was under the impression that builders often end up in financial trouble because they don't keep their money from/for each project separate; because they usually don't get enough money upfront to adequately support the project as well as their overhead between draws; because sometimes draws get delayed, yet they need to go ahead and pay subs, suppliers, etc. Kind of like Social Security. Those FICA taxes we pay go into the fed. govt's General Fund, to spend for whatever comes up. They aren't used just for current Soc. Security obligations. (Well, and let's not even discuss that they aren't held in the Trust Fund.)Yes? No? I think my guy is using anything he gets his hands on to cover the ongoing carrying charges/other expenses on other properties he owns and hopes to do spec builds on later. And to pay lawyers fees related to pending disputes over accounts from the past. You know--general expenses and overhead.If he's short on cash, it's gonna be hard to put gas in the truck, pay the surveyor and draftsman what he owes them, etc. So when he gets some cash from me, that's where it's going. Might not be enough to sustain him to that next draw.
Good point. Good luck seeing into a builders bank account or books. You might request to have them allow you to run a credit check. Good luck with that. We tradesmen run our own style credit check. I know I'm going to sound like a broken record but "get out there and talk to the tradesmen on site!". They'll tell you if the builder is paying late. If he is paying late, they'll be so angry that they'll tell you all the dirt. Bob's next test date: 12/10/07
I have every intention of using your "credit check" system. Just trying to locate the candidates. It's surprising how few custom builds are going on. Spec/tract builds--yes. No point hanging out there. 13 counties, 7 million people in the metro area. How many builders want to build on your own land? Then, how many are well capitalized enough to do so? Of those, how many have an existing job site where you can poke around? I'm looking for those.
>> I saw that his big Showhouse built in 2006 is finally under contract. Now, that can go one of 2 ways (if it actually sells): either he'll have enough cash available now and will want to start my build. Or, he'll have too much cash now and won't need to work for my meager offering. Hard to know. << I thought you said it was built in 04... no matter. What makes you so sure that he is making so much money off this house. If it has been sitting for between 2 and 4 years, he may have to bring money to the closing table just to get rid of it...
Hate to say it but if you haven't heard from this guy in 2 months, apparently he won't return your calls, and he has money for services he hasn't delivered in - what? - 6 months, I'm amazed that you even started this thread that you still wanted him to build for you. My Qs to you are: What date is it and who is president?
The Showhouse is interesting. He bought the vacant lot in 2003 for $120K (considered a hopeless lot back in the 40s when this neighborhood was originally built). At the same time bought the house next door, demo'd it and built another house there.He put together all the people who wanted to showcase their products (I guess he gets some of that for free or reduced cost) and the Showhouse was open for tour in 06. He's been trying to sell it ever since. Last summer he was still asking $1.9 million for it. The current listing agent had it for just under $1.5 million.The building permit valued it at $275K. So, I guess builders underestimate their cost to reduce their fees on the permit? Or do I figure he actually built 6500 sq. ft. with marble and mahogany floors, custom cherry cabinets, stained glass, concrete roofing tiles, brick and cedar shingle siding, etc. in that price range? I have no idea how that works.Yeah, I'm sure it's cost him some bucks to carry it all this time. Here's what I'm learning: even these guys who do custom builds, are making a chunk of money off the property end of it--maybe even most of their money. The house is just how they market it. So, why reduce your profit by building on the homeowners land?I'm the "loser" project he's hoping not to have to take on.
Can I get some points for being in touch with reality? I know he's either trying to dump me or just not very interested, hoping something more profitable comes along. I'm hoping to get my construction drawings, and site plan out of him, since I'm $7K into it with him for that. Be nice not to have to pay for all over again. So, I'm in make-nice mode till I get that.Meanwhile, I am looking for a builder--it's my second fulltime job.
I wasn't questioning your sanity (although I can see how you might be at this point!) I was using a heavy hand to make my point though. I am going to guess that this builder isn't a true custom builder. I have never built a house on land I owned . Always the customer had the land, the design , and the financing. I took what he had for design and made the reality. That is my version of a "Custom" builder.
They can't get your Goat if you don't tell them where it is hidden.
I skipped a few posts during my read here but ....
Forget him. Move on , Find another builder.
Or if you are still bent on getting in bed with him then when it comes time to pay him have him supply lien releases for every item on his bill. Hold back a retainer as a portion of every item billed until the end of the job.
Good luck, You should never have to sweeten the pot.
You are paying for the full meal , do you tip the restaurant personel before you sit down to eat?
Or do you wait to see how the service, food and experience was?
I pass the official sanity test, but I get the point. I'm just really feeling old and tired at the moment. Any inclination I have to use this guy is based on dealing with a known quantity and using tactics that might work to prod him along. Can I rely on the bank's approval of a builder as good enough for me to hire? Because I don't know any other way to get the financial scoop on anybody. I get Dun & Bradstreet reports, but that is less than useful.Just so I can earn some points today on the sanity scoring: I am looking for other builders. One I'll call today was recommended by the architect who did the design. He charges a fee for a bid; most custom builders here do. So, more of my construction budget gets spent.