builder loan questions

tracik3September 3, 2012

We were just going over the list of costs and were wondering if some of these are normal.

1. we pay $325 for a port a pot for the contractors?

2. the builder is getting a loan for construction and we are buying house from him. We have to pay the interest on the builder loan until we actually buy the house?

3. We pay the closing cost on the builder loan?

Thanks so much!

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whallyden

All three of those would need to be paid for one way or another.

Under our fixed fee contract, I'm being billed for a port-a-potty, paying interest on the construction loan and responsible for closing costs.

    Bookmark   September 3, 2012 at 10:13AM
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nini804

I think $325 is pretty good for the whole build for the potty...and that is great that the builder is getting the construction loan....you'd be paying the interest and closing costs anyway if you had the loan. Maybe there is a con to this scenario, but I can't think of one.

    Bookmark   September 3, 2012 at 10:14AM
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Beth Parsons

We, too, have a fixed fee contract, carry our own construction loan and are responsible for paying for each and every cost associated with the build, including the portable toilet. I think it's pretty par for the course. :)

    Bookmark   September 3, 2012 at 10:33AM
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brickeyee

One way or another those items must be paid.

    Bookmark   September 3, 2012 at 11:58AM
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agentslim

We are paying for the toilet too, its fairly common.

    Bookmark   September 3, 2012 at 12:15PM
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gaonmymind

Make sure the extra costs are within the purchase price and not addition to. Everyone pays for this stuff but it should be under the total purchase price umbrella.

    Bookmark   September 3, 2012 at 4:20PM
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pbx2_gw

Strange but we had noticed there is no don john on our build.... No stipulations or charge to us in the contract either.

    Bookmark   September 4, 2012 at 2:07AM
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brickeyee

"Strange but we had noticed there is no don john on our build...."

Sounds like a contractor thumbing there nose at OSHA.

    Bookmark   September 4, 2012 at 10:14AM
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angela12345

Yep ... Make sure the extra costs are within the purchase price and not addition to. Everyone pays for this stuff but it should be under the total purchase price umbrella.

    Bookmark   September 4, 2012 at 10:47AM
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renovator8

You did not say what kind of contract you have with the GC but whatever the case you would pay directly or indirectly for the portapotty unless you have an alternate facility available.

You pay for everything used on the site that is not included in the GC's normal overhead cost. Do you think he owns one of these things and a trailer to bring it to your site and can dump it legally? Be happy he hasn't added a markup to the cost of this item.

The financing cost is similar. That cost must be paid for by you one way or another and it can't be added to the GC's overhead so it is a separate line item. Any pass-thru cost that is not marked up is an advantage to you.

    Bookmark   September 4, 2012 at 12:14PM
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tracik3

We are paying him 10%. What ya'll are saying makes sense. I guess I just never thought about some of these things. We did also notice that he was charging us 12.5% when we negotiated 10% spoke to him this morning. He said it was an over site. And also we paid a draftsman for the plans and he had a $912 charge on there for plans, also an "over site". So, we are suppose to be signing the contract at the end of this week. We are going to be sure and go over it really well before signing.

Some things we were surprised at how cheap it cost and others at how much it cost.

    Bookmark   September 4, 2012 at 1:56PM
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angela12345

Tracik, when you say you are paying him 10%, that is 10% on what ... the original quote or actual costs during construction ?

    Bookmark   September 5, 2012 at 7:42PM
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downsy

Please be careful - sounds like you are going to have to keep a close eye on his charges to you if he's already making "oversites".

There were costs we had to cover that we were unprepared for (we'd never built before and we did a cost plus build and these were items not included in our estimate.)

Fee to set up temporary electric & water meters, monthly fee for the big garbage bin, monthly fee for porta potty, blueprint fees, custom mailbox with light that is mandatory for the neighborhood, and the list could go on!

    Bookmark   November 1, 2012 at 7:49PM
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