Whether it’s your first time building or renovating or you’re already a seasoned pro at dealing with contractors, below are some tips to save you time & money & headaches along the journey.
BEfore you find a contractor, ask yourself…
- Do you already own the home or lot for your project?
- Is it zoned for your intended purposes? Is it located in a historical district?
- Have you had the land surveyed? Do you have an elevation certificate?
- Do you have floorplans, elevations, mechanical plans? Stamped by an engineer?
- What is your budget? If necessary, have you made plans for financing?
- How much of the project will be DIY? Do you really need a general contractor to take the headaches away?
CHOOSING the right builder for your project…PSST! WE HOPE YOU CHOOSE US!
- CREDENTIALS Is the contractor licensed and insured? Have you asked them for a COI?
- TIME Do they have the availability to complete the project on your expected timeline?
- PROOF OF ABILITY Do they have references and examples of similar work for you to view?
- ACCEPTABLE TERMS Have you read the terms of their contract?
- BUDGET Have you discussed your budget and their payment terms?
- RELATIONSHIP GOALS Tensions can run high in construction. For good reason, it’s expensive and personal. Working with a builder you can have an open dialogue with will allow everyone to manage expectations better and deal with setbacks in a way that won’t derail your project.
What is the “+” in Cost Plus?
- Given the volatility of pricing and unreliable lead times for materials, we take projects on a cost + basis. Most customers understand the “cost” part but have a misconception about the “+” part of the equation.
- Cost = reimbursement for the cost of permitting, materials, utilities and labor to perform the work.
- Plus = 20% builders margin
- For simple math, if your project costs you $120,000.
- $100, 000 to reimburse without interest for the cost of permitting, utilities, materials, equipment rental and labor.
- $20, 000 used by the contractor to cover administrative costs, licensing, general liability insurance, workers compensation insurance, callback expenses, interest expenses, tools, storage, vehicles and maintenance, marketing and advertising…then hopefully, profitability. It is only a fraction of the “+”.
What is FBO? AND WHY Should you discuss this upfront?
- FBO = furnished by owner.
- FBC = furnished by contractor or in our case furnished by Crane.
- Many homeowners are looking for ways to cut costs.
- While it’s completely understandable, it must be discussed upfront…in order to avoid costly mistakes and schedule delays.
- *For this example, let’s use appliances. They’re expensive. Many homeowners, will insist on furnishing their own appliances to avoid the 20% builders margin. Consider the following to determine whether it’s worth the savings to assume responsibility for the handling of your purchase.
- 1. Are you prepared to schedule and coordinate delivery, confirm quality and store the appliances until needed? If damaged, are you going to coordinate replacement? Do you understand that the replacement time may delay your critical path and thus delay finishing your project?
- 2. Who will install them? Are the installers assuming responsibility for damage caused to finished floors and adjacent cabinetry?
- 3. Will you provide accurate spec sheets for the electrician, plumber, carpenter and countertop installer?
- > Without an opportunity for profitability, there can be little room for accountability. <
- Good uses of FBO = antique light fixtures, cabinet hardware, finials and decorative details. These items will not affect your critical path. We don’t need them to pass final inspection. You can even have them installed after we leave to maximize savings.