Hi All,
I’ve contracted to have a new custom home built on a cost plus basis in Asheville, NC. The framing stage is finally almost completed. The builder sends me a stack of bills each week or two and I pay them promptly. This is the first house that my wife and I have built and we’re very happy with the results so far .
The framing material estimate is $32,500.oo and the framing labor estimate is $24,280.00. The last framing material bill that we received was on 7/1/04 and at that point it had exceeded the original estimate of $32,500 (32,949). Also at that point, the framing was only about half completed and since that date and until yesterday, we have noticed many loads of lumber coming into our jobsite. From 7/1/04 we have received other bills, but no lumber charges have appeared.
This past Thursday, the builder informed me that there would probably be an additional $13,000 in lumber charges and an additional $7,000 in labor framing costs. Let me say at this point that my dealings with my contractor have been very honest and straight forward and that thus far I have respected his integrity throughout the entire process.
When I registered my initial shock at these increases, he and his job supervisor began citing a number of reasons for the over-runs…a difficult roof to frame, lumber price increases, etc., etc. When I ask ask who did the framing material/labor estimate they replied that they had.
Again, we are pleased with the work so far and we have enjoyed the builder relationship. However, this was a competetive bid that was submitted to two other builders and I’m sure our builder knew that the other builders were bidding.
So, we’re left wondering…did our builder low-ball the quote to get our buisness? Obviously, quoting a job is somewhat difficult with all the factors to consider…labor prices, lumber prices, etc. And I can understand missing an estimate by a certain
degree. But estimating $56,780.00 for framing and labor and the real figures come up to approximately $76,780…who’s kidding who here!
Our house is 3,248 sf of heated space.
If ther are any builders out there I would like to hear your opinion if possible.
Thank You,
Chas.
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I’d like to hear the opinion of some builders if possible
Replies
I am figuring on paying close to $48,000 for an enclosure package I am bidding right now. It has 2980 sf, and my figure includes all the lumber to frame it, sheath it, wrap it, and roof with 30-year architectural shingles. Exterior walls all 2x6, roof structure entirely trusses. The roof has 62 squares of net roofed area, and looks like the pic attached.
If your drawings were reasonably final when your guy put the price tag on the job, he either is a lousy estimator, or he square-footed it (looks suspiciously like $10/sf), or just plain lowballed you to get the job.
Lumber pricing is crazy now, but it has been crazy for a while. What kind of cost escalation did your guy tell you might happen due to wood cost movement, as a bad-case-scenario? He should have said something.
My packages usually have the enclosure piece, material and labor, at about 15 percent of my total costs. If you are running this wild now, you better rob a bank, or figure on spending a lot more money than this guy told you it would take.
By the way, why cost plus? Why not lump sum? Oh, sorry, I think I know. Your guy cannot estimate or count.
Is he the best builder in your area?
I just finished pitching a hip roof over a mansard and the "new price " I have for that is near $9.00 a sq ft.! Wonder where that contractor thought his pay was coming from on that one!
Scribe once, cut once!
Would YOU intentionally give a low price, then do the work not knowing IF you will get paid for it, or if the material bills would be paid or not, and your name with those yards ruined?
Our lumber yard has set a 2 week lumber bid window...so if the quote is over 2 weeks old it's worthless.
The labor is a different story....I'd question that, but not knowing if the prints are from some half-azzed plan book, or scribblings on a cocktail napkin....or from some archicrap....what was the bid like..open ended, time and materials....or a signed contract? Details...we need details.
My yard's quote is good for the week it's given. Roll the dice after that.
90% of what I added on (approx 2000sq ft)has a held price as long as I dont wait months between orders.
I've been very vigilant in that area trying to keep my costs as to what my yard quoted me.
I've had all the most expensive items ordered and stored at my yard untill I need them at which point I pay for that delivary.
Most good yards will do that for you if youre a valued customer.
Far as the roof being complicated.......he's kidding right????
Wasnt it the same roof he bid on???
BE well
andy
The secret of Zen in two words is, "Not always so"!
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Chas,
Where are you in Asheville? I'm on the east side not far from the Mall and Folk Art Center. I know some contractors around and can ask about yours if you wanna send along his name. Do you know the lumber yard he uses? You lived here long or new to the area?
I'm with those who asked, why cost-plus?
Cheers,
Jim
Gotta agree.. why cost plus? (not to sound like a broken record)
I know why the builder did it. I wish I could do more that way.
I would go back and read carefully what your contract says. Even on jobs where I can get some semblance of a cost+... there are limitations. Did you have an attorney look over the documents?
Also, have you asked your architect to assist? Perhaps he/she can shed some light on things.
As much as I hate to say this... I would be looking over the guy's shoulder each step of the way at this point (man I hate it when that happens... but it invariably does, whether there is an issue or not).
Number one, he should have notified and/or discussed that significant an over-run with you long before this. How often do you go out and talk with him?
Number two, as long as the framing of the roof is what he estimated... he should have been reasonably close. I can't think of a reason to be off by 29%... did he give you any other reasons? What is the "etc" in his reasons?
Lumber... different story. Prices are highly fluctuating. I would be interested, however, if the original materials list is what is now being used. Sure, it is easy to miscount.. but not by 40%! Even with the fluctuations in price... it's not going to be 40% difference.
Out of curiosity, what were the other builders' estimates for the same things? If they were close to what this builder's final costs are going to be... I would be real inclined to say that he low-balled you.
Of course, this is all predicated on this being everything about the deal... is there anything else that MAYBE can shed any more light on this? Changes? additions? Tear outs and rebuilds? Addition of a second, smaller house on the back of the lot?
I guess there are two questions.... whether or not the cost you are paying is reasonable, and whether or not you can afford the house if it goes 30% over the initial budget.
The last job I did that had a lot of framing came in at around $25 per square foot for labor and materials, from excavation to roof framing. Medium sized, complicated addition with a lot of engineering, no roofing, windows, doors, siding, etc. included in the $25. So, you're just under that figure at this point and it doesn't sound too bad to me. I've heard guys saw they can get framing done (labor only) for $5 per SF, but that's definitely not something I could do, except maybe building a tool shed. Bob Dylan's example is lower than mine and his work is more like what you are describing.
The bigger problem is that the contractor may not be able to give you reliable cost information for anything. There are guys who are terrible at that, whether it's intentional and deceptive, or just blue-sky optimism. I think you might want to explore getting out of the cost-plus contract and into a fixed-price contract, if you can. A 30% over-run in an early phase of the job is a major bad omen and I think it should give you some leverage if you want to cancel and either get someone else to continue, or get the existing contractor to continue under a new agreement.
Just for kicks, what were the other two bids compared to the one you went with? If you don't want to lay out the actual dollar amounts then how about percentages?
Are you saying you have excavation and foundation in that $25? I didn't include that.
When I add in excavation and foundation, my cost per square foot goes a little over $50.
I would be tempted to make him eat the increase in labor, and agree to pay the increase in material cost. Check with a good lumber yard, maybe even his yard, and ask how much the material went up between the quote date and the delivery date. You don't need to get an itemized quote from them, just ask what the percentage increase was for framing lumber.
Whenever you are asked if you can do a job, tell'em "Certainly, I can!" Then get busy and find out how to do it. T. Roosevelt
Yeah, the last job where I sized up the costs at the end of framing.... we had a simple footing/stemwall crawlspace in, two story addition framed and trusses on, everything sheathed. Also enough demo on the existing house for tie-in. Obviously some major differences between this and a new house, but it had cost a bit under $25 per foot. Add profit and overhead to that to get the customer's cost. The OP didn't mention whether or not the bills he got included p&o but I assume they did.
"cost plus". I have found this to be too vague. Right or wrong there are several different definitions out there and then there are variations to each one.
In a contract I typically bid the labor at a fixed rate if built according to plans. Furthermore, I specify change orders in writing and return a quote to correspond with that change. In the building materials section I show an allowance of costs for the framing materials at todays rates and it should be noted that "prevailing" rates at the time of order will be used.
MES
All that sounds OK, but I'll bet you take a little time to come up with a real framing package takeoff, and price that.
My guess is this guy's builder didn't do that. He eyeballed the plans, multiplied the SF x $10, and rounded up to $35,000.
Makes me wonder what he did with the rest of the job. Windows, doors, lighting, HVAC, sheetrock and finish, cabinetry, etc., etc.
My sister and her husband built a high end house about the size of the one in this discussion, also in North Carolina, not in Asheville. Plans showed everything, and they told the builder how to view costs for the lighting, plumbingware, finishes, etc. He too was lazy, told 'em the job would be "cost plus," gave them an "estimate," and then proceeded to bring in the job at 30 percent more than the estimate. That's a lot of dollars on a package that size.
What a life! I would love to be able to build for wealthy clients like that. No time spent estimating, no time spent pounding on suppliers for price quotes, etc.
Edited 8/8/2004 10:54 am ET by Bob Dylan
I agree......sounds like we're on the same page.
MES
I focus on remo work and not new building so I do more cost plus work. I don't see a reason for cost pluys on a new job though when the details are decided beforre starting, and I don't see a reason for starting wjhen the details are not finiished and written first.
anyway, it takes quite a stretch of imagination to see how he could be off that much without something intentionally being wrong in his court. Maybe he was careless in the estimate. Maybe his crews are taking materials hhome with them at night. Maybe he is lousy at book-keeping. Maybe he is charging materials to your job and using them elsewhere.
Since you are effectively the GC, you should know enough about building to have an idea of whether the bills you are paying are legit or not.
Also, I can imagine scenarios where the ball might possibly lie in your court. It might be that at time of 'bidding' you had not yet decided whether to use 2x4 or 2x6, or whether the roofing would be slate or 240# comp. You may have changed the floorplan and moved the windows five times while he was framing, etc.
I have seen sq ft costs like thgis, but not too often, and generally when the owner is a changaholic, but I have also seen two houses built for the price of one, when soime materials are being diverted. Awfully hard to guess from here.
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