How to get builder's approval on different subcontractor?

northpolehomeApril 16, 2014

We found another company who can do everything we want for our flooring and tiling within our allowance. If we go with the builder's subcontractor, we are looking at $12k in upgrades, at the very least. Now of course, we want to go with the other one. Question is, will the builder allow us to? The builder and uses this subcontractor exclusively, from what we know. How do we approach this?

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Ask him about it and show him the estimate in writing. A verbal estimate is worthless.

Will he allow it? Do you have a construction loan or is the builder financing the project? What does your contract say about this situation?

    Bookmark   April 16, 2014 at 12:14PM
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What does your contract say about hiring things yourselves? Ours has some verbiage regarding that specifically.

    Bookmark   April 16, 2014 at 12:14PM
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Good afternoon,
We are a home builder in Maine. We run across this all the time. People tell us we have cousin that is plumber or we have someone we like that can do the earthwork. We tell them if they can do it for the price we have allotted in that is never a problem. The one thing is your builder can be held to the time frame if this person runs over and throws off the schedule. You should ask your building contractor how much you have in the contractor for the flooring first if the contractor doesn't already itemize it out then let him know what you want to do.

Here is a link that might be useful: Custom Home Builders

    Bookmark   April 16, 2014 at 12:21PM
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If it's allowed at all, the builder will want to add his % on top of the other quote. That's only fair. And he will not be held responsible for their work at all. You hire, you are the GC for that portion, and you supervise and perform quality control. If they interfere with the schedule, you pay the penalty for that.

Part of the reason you choose a builder is his contacts with his subs. He knows the quality of work from his guys. He's responsible for them and their work. Your guys are complete unknowns to him. Are they licensed and insured? How long have they been in business? Be 100% sure that you are talking like to like specs. Most homeowners don't have a lot of in depth construction knowledge to truly understand why two quotes are different.

    Bookmark   April 16, 2014 at 2:34PM
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We have $34K in flooring allowance for a 5500 sqft 2-story home with a basement, about 1800+ sqft on each floor. Both basement and 2nd floor will have mostly carpet, except for the bathrooms and laundry they will be LVT (luxury vinyl tile). Master bathroom is the only one with tile. On the main floor, about 600 sqft is laminate, the rest is also carpet and LVT for baths. To make the living room hardwood, in addition to making the other 600 sqft laminate to hardwood (total of about 1300 sqft), we are quoted additional $7000 on top of the $34K. The other flooring company will stay within the allowance, doing hardwood, mohawk smartstrand silk for the carpets and tiles on 2 bathrooms and LVT for the other 2 bathrooms and laundry.

    Bookmark   April 16, 2014 at 2:47PM
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At 34K with the builders 20% on top of that, you're not saving any money. Stay with the one who brung you to the dance or start generating a lot of ill will here.

    Bookmark   April 16, 2014 at 2:56PM
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Thank you for your input. Do you think then that at $755k, 5500 sqft house, the $34k flooring allowance is not enough?

    Bookmark   April 16, 2014 at 3:33PM
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Not nearly enough for that level of a house. You're doing a lot of entry level choices instead of what befits a 5500 square foot house that probably costs over 1M to build. Or should cost over 1M to build in even moderate cost areas of the country.

    Bookmark   April 16, 2014 at 3:37PM
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I think it depends entirely on your builder, and unless he is getting some kind of kickback that doesn't show on the contract, I don't think you'll need to "add" 10-20% on top of the quote you have. (And who is paying 20% to a GC on their build here? That would be a ridiculous amount in my neck of the woods, but then again a small percentage of the cost to build in our location is a great paycheck) All of our quotes have the GC percentage as an amount based on the entire build, with a completely sep. line item.
He should have no problem managing and scheduling a different sub if he getting paid a lump sum percentage of the build.

Changing out a sub shouldn't change his cut at all... unless there is some kind of hidden money that changes hands with his favorite subs. Which happens all the time (even with great builders I am told). One of the best ways I've found to save money is to pick my own subs (or at least interview several and "suggest" the one I like best) for the larger portions of the project. It helps me know what the market value is (and how much I might pay if I was an owner builder). I'm also learning a ton. Hopefully you have a builder that is willing to look outside their "normal" circle of subs to get you a better price. Especially with so much square footage, you can get great deals just based on the amount ordered and installed.

That said, I too think that $34k is pretty low for a flooring allowance on such a large house. But it seems that you are very much aware of what that amount might get you...

I think you should ask your builder if they would be willing to talk to this other flooring company at the very least. Maybe his other sub will match the price or come closer?

    Bookmark   April 16, 2014 at 4:21PM
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Where does the 12 grand difference come in?? Is it not apples to apples here? And almost $12/ft for wood floor is insane unless it's some kind of rare wood.

    Bookmark   April 16, 2014 at 7:29PM
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Basically, we have $34k allowance for flooring and tiling (including master bath, shower, and kitchen backsplash). However when we went to the showroom (subcontractor), they won't tell us the prices of the items. They have some options for each item (ex: laminates, carpets, tiles), and anything you pick outside of those pre-selected items would be an upgrade. So even if we choose a lower end hardwood, since it is not in the selections (only laminates), then it is an upgrade. $7K upgrade was quoted when we said we wanted to switch all the laminate areas to hardwood, and in addition, the living room carpet to hardwood. That is the additional $7k for about 1300 sqft of hardwood vs laminate/carpet. Some of the tiles that we picked out from the other company are wood plank tiles for the master bath (also an upgrade from the subcontractor), and Walker Zanger tiles for the backsplash. Aside from that the carpet that is included is nowhere near the softness of the mohawk smartstrand silk that we are getting from the other company, and we will have at least 3200 sqft of carpet. Our friend who built with the same builder said the carpet they got was on the lower end, like $0.99/ sqft, and that is what is included. So I would say that would have to be at least $12K in upgrades right there, in my uneducated estimate.

We are trying not to put entry-level finishes on the house, especially since we feel that at the $750K price, some nicer finishes are warranted. However, with the allowances, it is getting difficult to do that. We are in North Dakota. Construction is booming so much here in the last 3 years. The house we are building, they would build for ~$500k to $600k 2 years ago.

We actually don't have a "contract." We signed off on the floor plans and an amendment that had the inclusions and allowances. It was our realtor who represented us who had a contract ready (purchase contract), but nothing of any sort from the builder with any stipulations or restrictions.

Appreciate each and every one's input.

    Bookmark   April 16, 2014 at 8:07PM
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Sophie Wheeler

If everything you want is an upgrade, then it's not a custom home. It's just a really big tract home. And what you've described is typical with tract home builders. It's how they are able to build so cheaply. They control the choices to keep all selections to a known quantity for timing and installation, and they impose prohibitive change order fees. And you do NOT get to pick any trades other than whom the builder usually uses.

Get out of the contract and build a custom home if that's what you want. But you won't be able to do that for that low price. It's more tban just the decorative finishes that are a higher level. Everything is a higher grade. And everything costs more. You'd definately be building a million dollar home territory for a home that large that is a true custom.

    Bookmark   April 16, 2014 at 8:19PM
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We didn't know the selection process would be like that. We thought since we have a dollar amount for the allowance, we can use that to make our own selections with their subcontractor. Apparently not.

    Bookmark   April 16, 2014 at 8:34PM
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That's why you should have a well written spelled out contract. That way there are no surprises.

    Bookmark   April 16, 2014 at 8:41PM
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If the contract did not have any restrictions or stipulations, I would still approach the builder with a written quote from this other company and see if 1) they are willing to match it or come down or 2) use this other subcontractor. This sounds like a step up from all the tract home builds we've done, so you may have a better experience than the ones detailed above. And don't let anyone scare you with the numbers... location is everything and they build lovely custom homes in Wisconsin all the time (your size) for this price. I'm sure the trades are making out wildly in N.D.. ;)

Now if you want a home designed by Gil Schafer and built to those specifications... you might be in trouble. That's where I started and my expectations had to come down a teeny tiny bit!

    Bookmark   April 16, 2014 at 8:58PM
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Thanks redheadeddaughter! We are meeting with the builder's subcontractor very soon. I am hoping to be able to give an update here, hopefully with good news. We spoke to another friend of ours who built with the same builder last year. The subcontractor did a price match for them. Hoping he would do the same for us!

    Bookmark   April 17, 2014 at 12:32AM
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I agree with live_wire_oak and hollysprings completely. The amount seems very low for a place that big. Even moreso if tile used for showers is in the same budget. It seems for a place that large that the budget is maybe half of what it "should" be but hollysprings put it well about it not being custom.

    Bookmark   April 17, 2014 at 6:36AM
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