Builders cut

holcombe3August 23, 2013

I have a question about paying our builder. When he drew up the paperwork outlining the estimate for the house he put he would be charging 10 percent of the cost of labor and materials as his cut. My husband is an electrician and he had him go ahead and bid out the electrical because he was not sure if he would have time to wire the house himself. It bid out to 15000 so we decided to go ahead and let my husband do the work to save that money. My husband has done all the legwork of tracking down materials and buying it and all the labor himself. The builder has just informed us that he still gets 10 percent cut of the materials my husband is purchasing for electrical. Is this right? Should we be paying him a cut for something we are doing?

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Yes, you need to pay the 10%. Your husband is acting as a sub on the job, and all labor and materials are being marked up. And if you are getting a good job, you ought to be grateful it's only 10%. That's well below market rate and would only work for a one man show who has almost no overhead. Your husband ought to understand the issue, as marking up materials is part of his job as well.

    Bookmark   August 23, 2013 at 8:55PM
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It depends entirely on the terms of the contract.

Unless your husband has a sub contract with the GC it is unlikely he is a sub contractor.

This post was edited by Renovator8 on Fri, Aug 23, 13 at 21:37

    Bookmark   August 23, 2013 at 9:32PM
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