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Discussion Forum

Negotiated Contracts with a builder

| Posted in General Discussion on January 12, 2000 11:23am

*
In my area all the local lumber yards have design departments that will take your rough plans (or even just your ideas) and draw up blueprints that can later be taken to builders for bids. They don’t charge anything for the service as long as you buy your materials from them. They usually allow 3-4 revisions and often charge a nominal fee for additional revisions (just to put some limit on changes). I would be surprised if most lumber yards would not offer a similiar service now that CAD programs are readily available and reasonably priced.

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  1. JIm_R | Jan 13, 2000 02:32am | #8

    *
    Central Wisconsin actually (it is cold and snowing hard today - doesn't seem like heaven). This service is common in this area. The lumber yard I use (a locally owned business that caters to builders) has one designer that will draw up plans on her CAD program. She will make alterations as desired and will then kick out an accompanying material list. The client can then take the plans and material list to prospective builders and get bids that are then pretty easy to compare. This is fairly common around here. It is a great service and is also profitable for the lumber yards (it costs them one employee and a CAD program).

  2. Guest_ | Jan 13, 2000 03:12am | #9

    *
    ....Kathy...a negotiated contract is just that...the basis might be:

    "Cost Plus"

    "Time & Matls"

    "Cost Plus a fixed fee"

    The arbiter in the one I was discussing was the Architect who represented the Owner's interest.
    We used "Cost Plus fixed fee" we determined all of the estimated costs, solicited bids for subcontracts, assisted the Owner in selecting furnishings ,floor coverings, fistures and appliances, brought in all our subs who worked for US...in short we were the GC jsut like on any of our other jobs.

    All materials and subs were charged to the job as invoiced .
    My labor was charged at rates stated in the contract,, based on my laobr costs plus burden, My time was charged to the job at agreed rates. All the above was the COST part. te fee was based on what I figured I should make from that job to cover my overhead and profit.... the incentive is to maintain a good reputation and to get the job done in a reasonable time...if the Fee is based on 6 months, and the job drags out to 9 months, I wouldn't make any money.

    That job worked great, 16 years later I'm still their Contractor and the Architect stil uses that form on some of his other work.......

    The problem is you really have to have a trust relationship wioth the builder unless there is another Professional to pass judgement on the job progress....

    The Contractor is the one who should write the contract, stay out of the stationary store, interview your builder, he can make your plans into construction drawings and make them part of the Construction contract... wether he does cut and paste, or he puts your plans on his drawing board, or he has a plan service he deals with , or what ever.. they will evolve from you and them working together...

    ...3D Home Arch. is the homeowner version of the CAD we use, Chief Architect, a lot of builders use it, its a great way to organize your desires and needs and convey them to a professional...

    ASk your potential Design/builders for references and check them out...

    As for me signing an AIA document, not on your life, not til I got the clauses in that I want and need to protect me.
    If it comes to that , my lawyer would be reviewing it and recommending changes, it's not written to level the playing field..

    1. Guest_ | Jan 13, 2000 08:33am | #10

      *Bravo Mike! Bravo. I remember my chess teacher telling me to protect my queen...(though he didn't use those exact words...called her something else!) Way to look after Mike!L

      1. Guest_ | Jan 13, 2000 12:53pm | #11

        *Lawyers generally love form contracts: they lose a few hours billing for drafting the contract, but more than make up for it with litigation billablesIn my area, the form RE sale agreement allows the buyer to walk if the home inspection finds "habitability" problems: problem is, no one can define habitability.IMHO, the purpose of a good contract is to get the parties to agree beforehand (i) how things will be done, and (ii) what'll happen when problems arise. If a thorough job is done, everyone understands upfront how problems will be resolved, so that, er, problems don't become problems.Bob

        1. Guest_ | Jan 13, 2000 05:42pm | #12

          *....absolutely lawrence...and of course the contract should be readily understood by both parties...AIA documents FIRST,protect the "A", second, the Client and last , everyone's goat, the Contractor...I can't believe how many clauses there are in a typical document that no one has any intentionof enforcing... except arbitrarily..for instance...liquidated damages, "time of the essence", yada yada...unrealistic time schedules,... a prudent (read responsible contractor)reads those clauses, made to protect someone, and says ,, whooops, I'd better man this job with a double crew and put some more money in so I can meet these conditions... and the gambler says ... maybe we'll get lucky... so the gambler gets the job... takes 3 months longer than the the Contract date. bills the Owner for 20% extras, and the Architect signs off....unless of course, YOU got the job...Nope...reputation and references are more important than the form of the contract...

  3. Jonathan_Stampley | Jan 16, 2000 09:47pm | #13

    *
    As an architect I am not thrilled to hear you want to plan you house without one. If you are not going to hire an experienced professional to design your house let me sugget that you spend the time to research existing house designs, particularly plans that have been built or design by a professional. You can buy plans from many sources,I would get recomendations from your choisen builder or through some of the more reputable mail order companies. House building and design has evolved over centuries and the efficiences, astethecs and organization of a home seldome come together in a solid maner with out an understanding of what works and what does not. Save your self time and frustration while ending up with a comforable home.

  4. Guest_ | Jan 17, 2000 02:15am | #14

    *
    Architects are useful...AIA documents are not. Builders do not use AIA documents.

    Oh and...It will be dark often after it is light.

    near the stream

    1. Guest_ | Jan 17, 2000 09:32am | #15

      *Kathy,I just want to tell you that I think you are really bright for wanting to build this way.By choosing a good contractor and having him or her involved from the beginning will make this project go much better for both of you.Your contractor will not feel a need to win a bid on price alone and will be more comfortable discussing all the possibilities with you. If you are upfront with your budget, a good contractor will be able to help you get the most bang for your buck. When bidding from and architects specs, builders don't have the opportunity to offer suggestions which could improve the design or save some money. It's a very rare architect that has a grasp on what construction actually costs.The most important part, as I'm sure you know, will be to find the right builder. Once you have done this, he will be able to hold your hand through the rest. I commend you for knowing that

  5. Guest_ | Jan 19, 2000 04:01am | #16

    *
    We are going to build a new home and are interested in using a negotiated contract with a builder instead of sending drawings out to bid to several builders. Does anyone have any opinions on the pros and cons of the negotiated contract?

    1. Guest_ | Jan 12, 2000 02:32am | #1

      *Kathy....best job I ever worked on was a negotiated contract,but would you define your terms ? your expectations ?Do you have : landconstruction drawingspermitsfinancingwhere will your expertise come from ?Is there an Architect involved ?

      1. Guest_ | Jan 12, 2000 07:13pm | #2

        *Mike,Yes we do have the land to build on and financing won't be a problem. I have designed the house myself on Broderbund's 3D Home Architect software, which means all I really have are dimensioned floorplans. I feel an experienced builder and I could work out the necessary details for construction without having to go to an architect to draft construction plans. To do this I would obviously need to chose the builder before the construction documents were complete, which would mean no bidding process. We live in a rural area and there are only two builders that we are considering using. The bidding process seems backward because you are going to the construction expert (the builder) after the construction documents are complete. How did you work out the details of your negotiated contract?Kathy

        1. Guest_ | Jan 12, 2000 07:59pm | #3

          *Greetings Kathy, I would be shocked and dismayed if your local building department would accept a layout plan to supply a permit. Here is what we are required to submit to build a deck in Ontario. Site plan with proposed structure located. Elevations, Sections, Connection to wall detail, layout and plan view. Footing details and specifications. If you are building a house you will also require plumbing layout, electrical, heating layout and heat loss calculations, septic(if applicable). Unless your potential builders are Architects or architectural draftsmen on hiatus, the project really has to be planned. Sorry if I burst your bubble. If I was bidding on the project, I would put you together with someone capable of developing a set of plans, or help you purchase a proper set of drawings to work from. Only after all the blanks are filled in, could I give a reasonable expectation of price for a custom home. An experienced builder in your area may have built something very similar to the house you have sketched to help you develop a budget, however it is always best to plan things thoroughly, rather than winging it. L

          1. JIm_R | Jan 12, 2000 11:23pm | #4

            *In my area all the local lumber yards have design departments that will take your rough plans (or even just your ideas) and draw up blueprints that can later be taken to builders for bids. They don't charge anything for the service as long as you buy your materials from them. They usually allow 3-4 revisions and often charge a nominal fee for additional revisions (just to put some limit on changes). I would be surprised if most lumber yards would not offer a similiar service now that CAD programs are readily available and reasonably priced.

          2. Guest_ | Jan 13, 2000 12:15am | #5

            *Jim? Is this area near paradise NC? Free Architecture? That sounds like heaven! LMAO... I apologize if you were serious...won't say what for...but, I apologize anyhow...Lb If it is free…nobody is willing to pay for it!(Winterburn/1999)

          3. Guest_ | Jan 13, 2000 12:20am | #6

            *The Borderbund floorplan is good for a start. We have now built two homes for people that have used that TO GET STARTED. But in our area you will need all that you have read in earlier posts. In both cases we were the chosen builder before bids based on work we had done and our average per sq. ft. price. We reviewd the drawings and told them of changes and options we would need and helped with a few window placements for sheer wall specs, etc. We then took the the plans to a local designer who only charged a small amount since the design was done she just had to come up with cross sections, check loads and spans and a rough plumbing. Next palns went to the local roof truss supplier fo r design and engineering.Of course with out seeing them they might have to go to a structural engineer too. After the final set we then set down to discuss real $$. We also did an addition for someone who used Border bund and copied the cross sections out of the book "graphic design", took everything to Kinkos and got blue print size and it all passed inspection. So you might have a bit more work ahead of you. Good luck

          4. Guest_ | Jan 13, 2000 01:39am | #7

            *As to the actual contract itself, good quality stationary/office supply stores have standard form contracts for sale. The local "old fashioned" stationary store that I go to in Salem Oregon has AIA (Architectural Institute of America) contract forms for about $3-5 per form. As far as I am concerned they have established all the necessary protocols about who, what and where. With a word processor, you might have to re-type them to insure you have everything included that you want to but ALL the basics are there. Even if you are using a lawyer (pronounced liar-yer), these are good starting points. And if the builder is unwilling to sign such an AIA contract, I would stay away from them.

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