A builder!
Several years ago, I read “House” by Tracy Kidder, published in the early 1980s. Even if you aren’t considering building a house (or having one built for you), this is an interesting read. The author gets below the surface of the builder/architect/client relationships. He evidently was on site for much of the process of building a house, and includes thoughtful research results about the history of building, the personalities and backgrounds of the key players, and the costs to build.
I have just re-read this book. Even though it was written a generation ago, and much has changed about building codes and costs, it is an insightful view into the relationships involved, and helpful for our current situation.
A year before we were thinking of starting our home, we asked everyone we could about their recommendations for a builder. From our new neighbours, to the designers we were talking to, to the manager at the quilt shop, the tool rental store, and the building supply stores, we inquired. Then, we interviewed a few builders whose names came up more than once. We wanted to see some of their work, and get a sense of their availability. We asked if they had much experience with building green. I developed a list of about 12 written questions for the potential builders, such as:
- How many employees do you have, and what is your turnover?
- What is your opinion of pre-packaged homes: Can they save money?
- What is your opinion of ICFs (insulated concrete forms)?
- Have you worked with fly ash concrete?
I don’t think this list exercise was very useful. It was more useful to meet the builders in person at a site they’ve built or are building. You get a much better idea of the quality of the work and the communication skills of the builder (at least the builder’s frontman). Most builders are not that comfortable with email. Some have an email address, but seldom check it. They rely on their cell phones for all communications, it seems.
Once we had the house plans in hand, we could begin to talk to builders. Interestingly, a small few that we liked were no longer available a year later. Two that we quite liked took about four weeks to prepare an estimate. An estimate is not a quote, and no one seemed to be comfortable with a quote. Two builders said that an estimate almost always turned out less costly in the end than a quoted price. Judging from our experience so far, I am not so sure about that.
In Tracy Kidder’s book, House, much of the thread revolves around the quoted price: any variance, or “change order” is costly to the homeowner, and the builders struggle daily to make a decent wage plus profit by staying within their own time estimate in the quote. It takes a great deal of time, research and knowledge of the industry at the time of the quote and expectations over the course of construction, to prepare an accurate quote. No wonder contractors are reluctant to do this. In Kidder’s book, the builders came away with decent wages over the five months of construction, but almost no profit, due mostly to one missed budget item and the builder’s own need for quality – a stairway had to be rebuilt.
An estimate is just that: an educated guess about the cost of each stage. The billing would take place on a regular basis and is based on the actual costs, plus taxes and overhead (called, not surprisingly, “Cost Plus”) One of the two general contractors who prepared an estimate for us required a $60,000 payment up front as working capital, upon signing the agreement and commencing work. The overhead rate, or profit, for general contractors, charged on all permit costs, labour, rentals and materials (all costs, whether they procured them or we did) varied from 12.5% to 15%.
To Be Continued…
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