Receiving invoices/receipts

lindsay221June 4, 2012

My husband and I are just starting our new build. We have a fixed price contract. There are already several areas where we know we're going to go over budget (i.e. upgrading fireplaces, etc.). My question is, should we be receiving some type of invoice/receipt for these overages? As of now, he's just giving us a number (i.e. "to upgrade to the fireplace you want, it's an extra $3000"). I guess we're just kind of confused about how this should work. This process is starting to make us feel like we're at the mercy of our builder. We think he's a trustworthy guy, but don't want to be taken for a ride. Can someone explain to us exactly how this process should work. What type of invoices should we be receiving, if any?

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You need a written change order that he then prices and also signs.

    Bookmark   June 4, 2012 at 9:44AM
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Sophie Wheeler

Change order procedures are written into your contract. And yes, to a certain extent, if you want something different than you agreed upon in the contract, you are at the mercy of your builder. He is not obligated to look for the lowest price for your upgrade, and indeed may just look for the most expedient supplier which he has used in the past and which he has confidence in. It's better to stay on schedule with a higher priced product than to wait six weeks for a cheaper special order. Also, the way the change order process occurs, you undoubtedly also incur the 20% markup, plus a change order fee on top of the actual labor and materials to be changed. That can take that $400 toilet and make it $600 extra by the time the change order is done. So, think VERY VERY carefully about changing anything that is in your contract and reserve the change orders only for items that are not easily upgraded after you own the title to the house.

    Bookmark   June 4, 2012 at 1:47PM
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I feel ya.. on the invoices. We are at cost plus . I too feel like we are at the mercy of the builder. The builder lists out the cost of each vendor item on a spread sheet to make a draw. But what is to stop him from adding $100 or $200 there and here etc... without an actual comparision of the vendor reciept.. I get a little paranoid. I think I will ask for a copy of the vendor bills and see what response I get...

    Bookmark   June 4, 2012 at 7:23PM
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You should get an invoice from the GC�s supplier for the new fireplace, then a change order form showing the change cost, markup and total cost. Also ask for breakdowns for each item, cost of new fireplace, cost to change framing if any, cost for change in gas line fitting, and check to see if you get any credits. like bigger fireplace will need less surrounding tile?
Even for a fixed price contract, you should always ask for breakdowns and know where your money goes. For example 1st draw after foundation completion, ask for breakdown of foundation concrete placing and formwork cost, excavation cost, backfilling cost, etc.

    Bookmark   June 4, 2012 at 8:00PM
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To piggy back on the OP's question: do the GC/Builder work on the premise that we can reconfigure the allowances to cover for the change order?

Or do they want to money up front & work out the netting of the allowances later on?

    Bookmark   June 5, 2012 at 8:23AM
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Thanks, everyone. Our builder does not charge for change orders. We just pay the difference of what the item & any additional labor costs. But like loafer mentioned, we would definitely like to know where our money is going. As of now, we do not know numerical amounts of anything (i.e. cost of framing, cost of concrete, etc.). For example, many people on the forum talk about how much they're spending for windows. We don't know what our total window cost is. We sat down with the window rep and made some changes, so we know going from "x" window to "z" window will cost $1000. I don't want to put our builder in an awkward spot asking for dollar amounts, but I would like to know where our money is going. I can see being entitled to such information with a cost plus contract, but wasn't sure if the same is true for a fixed price contract. For those of you with fixed price contracts, how did this process work for you? Did you know fully where your money was going? Did you get invoices?

    Bookmark   June 5, 2012 at 8:49AM
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