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View Full Version : What % should a GC charge to build a home?


jkski
05-24-2012, 05:09 PM
Well, my drawings are finally all done and my new home is out to bid, just curious what others are seeing in terms of what percentage the GC is charging to build for you?

Is 8% of the total good or bad? I am assuming the GC bumps up the figures that their subs provide in order to give additional profit so that 8% in reality is much more....or am I incorrect to think this?

Looking forward to the feedback.

Double D
05-24-2012, 06:02 PM
Well, my drawings are finally all done and my new home is out to bid, just curious what others are seeing in terms of what percentage the GC is charging to build for you?

Is 8% of the total good or bad? I am assuming the GC bumps up the figures that their subs provide in order to give additional profit so that 8% in reality is much more....or am I incorrect to think this?

Looking forward to the feedback.

I think your correct in your assumption, for the most part. Not sure of the 8% because I dont work in the residential market. Good Luck!!

SkiDog
05-24-2012, 06:22 PM
Well, my drawings are finally all done and my new home is out to bid, just curious what others are seeing in terms of what percentage the GC is charging to build for you?

Is 8% of the total good or bad? I am assuming the GC bumps up the figures that their subs provide in order to give additional profit so that 8% in reality is much more....or am I incorrect to think this?

Looking forward to the feedback.

I would probably do one for 8%, IF I was real hungry! Thats 8% over the top of EVERYTHING. That includes supervision. Some people think that a builders time should be included in the 8%. Not so. With the price of fuel these days, that can quickly eat into that 8%. Plus all the meetings with the owners, going to supply houses to order/pick up material, invoicing, office/clerical work. All that is considered part of the COST to build anything, residential or commercial. Oh, and lets not forget insurance too. Do NOT hire an unlicensed builder! You're asking for trouble there. Also, NEVER pay a builder or sub-contractor BEFORE he has completed EVERYTHING he is invoicing you for! We're not trying to get rich on one house, but we don't wanna be tired & hungry either. Hope this helps.

helton333
05-24-2012, 06:23 PM
10 in Nashville for someone reputable

Maristar210
05-24-2012, 06:32 PM
Mine was 13% which was reasonable imo

Skyskiguy
05-24-2012, 07:28 PM
Depends on your market, but target should be 10-15%.

Fast50dad
05-24-2012, 08:11 PM
We had ours built last year at 11.5%. We were very pleased with not doing a darn thing! Good luck!

Hammer
05-24-2012, 08:38 PM
Well, my drawings are finally all done and my new home is out to bid, just curious what others are seeing in terms of what percentage the GC is charging to build for you?

Is 8% of the total good or bad? I am assuming the GC bumps up the figures that their subs provide in order to give additional profit so that 8% in reality is much more....or am I incorrect to think this?

Looking forward to the feedback.

10-15% is realistic. But remember what Skidog said. Cost of everything that it takes to build the house.

jkski
05-24-2012, 09:26 PM
Thanks guys, it seems like 8% is a pretty good deal then. Now I just need the other 3 bids to come in......and a defibulator unit on hand would be good as well!

Again, I appreciate all of the feedback, you guys are a wealth on knowledge.

SkiDog
05-24-2012, 10:05 PM
Thanks guys, it seems like 8% is a pretty good deal then. Now I just need the other 3 bids to come in......and a defibulator unit on hand would be good as well!

Again, I appreciate all of the feedback, you guys are a wealth on knowledge.

One more thing, Are your SURE that all 4 bids are based on the exact same thing. Without specs, it would be damn near impossible to bid apples to apples on a house just by a set of plans. NEVER, and I mean NEVER, go with the lowest bid! And Remember this the ENTIRE time you are building your house. Speed, quality, Price,...........Pick any two.

jkski
05-25-2012, 06:35 AM
One more thing, Are your SURE that all 4 bids are based on the exact same thing. Without specs, it would be damn near impossible to bid apples to apples on a house just by a set of plans. NEVER, and I mean NEVER, go with the lowest bid! And Remember this the ENTIRE time you are building your house. Speed, quality, Price,...........Pick any two.

Great advice again and yes, I put together a full room by room spec sheet breaking it down to the number of light switches and supplied each GC with the exact same info. I have a spreadsheet set-up so that I can break each bid down into the various categories and look at them side by side to see where one is higher than the other, etc.. Fortunately, I am not in any hurry so speed is not a need of mine and being that this will be the only house I ever build, quality is a major factor but I'd be lying if I said price was not as well.

Thanks again for the advice, I do appreciate it especially the honesty.

JohnnyB
05-25-2012, 07:02 AM
Really important. Being thorough will help you make costs predictable and control change. I was my own gc and Iirc my general spec was 8 pages. Each trade got a thorough section....I had one cost issue with a contractor that over-ran his quote significantly--he failed to keep me informed on top of that. I could've made him eat it all...I paid for material overage and he paid labor overage in the end.

Other than that, almost no changes sans extra dump trucks if gravel to deal with extremely wet conditions

Sent from my PB99400 using Tapatalk

Fast50dad
05-25-2012, 08:28 AM
One thing to keep in mind is final grade, sod, curbed edging (still waiting on that) and trees. We did not consider this when we built. So we had about a $3,000 bill come out of savings vs factoring it into our mortgage. Not a big deal, but if I could do it over, I'd have put it into our mortgage. Good luck!

SkiDog
05-25-2012, 08:50 AM
Great advice again and yes, I put together a full room by room spec sheet breaking it down to the number of light switches and supplied each GC with the exact same info. I have a spreadsheet set-up so that I can break each bid down into the various categories and look at them side by side to see where one is higher than the other, etc.. Fortunately, I am not in any hurry so speed is not a need of mine and being that this will be the only house I ever build, quality is a major factor but I'd be lying if I said price was not as well.

Thanks again for the advice, I do appreciate it especially the honesty.

Keep in mind too, that building a house is an adventure, so don't let it get the best of you. One area you might can save in, is jobsite cleanup. That's a NEVER-ENDING chore. But a clean site is a safe site. If you can get the contractor to let you clean it as needed, he'll probably deduct
1-2 K. I don't know what size you're building, but I always put between 1-2 K for cleanup. Now sopme of that might include dumpster fees, which you gotta have anyway. But the labor could be reduced if you and the family wanted to jump in there and do that.
I have a saying that fits this biz pretty well. 'the last 10% of the job, is 90% of the work. remember that. good luck pal.

76S&S
05-25-2012, 09:21 AM
I noticed that you stated that quality was a major concern, not time.

If you spec'd specific materials, be sure that is what is being quoted in your bids. There are some (not all) dishonest GC's that will give you a bid knowing that they substituted materials to offer up a lower price. After they are awarded the contract they will try to get the substitutions approved.

A quality GC will notify you that if you substitute material A for material B, that it will save you X. This is the guy that you want to do business with.

Just my .02

jkski
05-25-2012, 10:16 AM
I am sure I will have to make some changes in the quality of some materials to make this work for my budget and at the same time there are several items I will end up doing myself to save. On the first bid they had about $6700 for tile materials alone for a total area of 832sq.ft., so roughly $8/sq.ft.. I will be doing the install myself, which they quoted over $12k for the labor and I can buy the materials myself for roughly $3500 ($4.20/sq.ft including hardi backer, thinset, grout and sealing). The hardwood flooring area is roughly 772sq.ft and was quoted at $7k nad I can buy the materials direct for just under $4k and again install myself.
Flooring is just one area and I am finding several others where the bid price seems way-off, now granted, you have to build in something for possible overrages but .......

Skyskiguy
05-25-2012, 10:29 AM
Keep in mind too, that building a house is an adventure, so don't let it get the best of you. One area you might can save in, is jobsite cleanup. That's a NEVER-ENDING chore. But a clean site is a safe site. If you can get the contractor to let you clean it as needed, he'll probably deduct
1-2 K. I don't know what size you're building, but I always put between 1-2 K for cleanup. Now sopme of that might include dumpster fees, which you gotta have anyway. But the labor could be reduced if you and the family wanted to jump in there and do that.
I have a saying that fits this biz pretty well. 'the last 10% of the job, is 90% of the work. remember that. good luck pal.

Just curious - don't you require your trade contractors to do their own clean-up as part of their scope of work? Yes, you will still have to pay to have it hauled off, but if it is in their scope, make them get it to the dumpster and don't pay someone else to do it for them! Just my two cents.

JohnnyB
05-25-2012, 10:43 AM
I am sure I will have to make some changes in the quality of some materials to make this work for my budget and at the same time there are several items I will end up doing myself to save. On the first bid they had about $6700 for tile materials alone for a total area of 832sq.ft., so roughly $8/sq.ft.. I will be doing the install myself, which they quoted over $12k for the labor and I can buy the materials myself for roughly $3500 ($4.20/sq.ft including hardi backer, thinset, grout and sealing). The hardwood flooring area is roughly 772sq.ft and was quoted at $7k nad I can buy the materials direct for just under $4k and again install myself.
Flooring is just one area and I am finding several others where the bid price seems way-off, now granted, you have to build in something for possible overrages but .......

been there....a week of vacation and some grunt work saved me 10K in labor for all the tile I did

JohnnyB
05-25-2012, 10:48 AM
5 days and 1400 sq ft of tile later.....

JohnnyB
05-25-2012, 10:54 AM
also did all painting, a good portion of the roofing, wiring, finishing, etc.

Was going to do soffits but my framer through me a good price to finish the roof and do those...when work is low, subs will take on additional at reasonable costs to stay busy....he did great work.

Still was a long summer....burned lots of vacation time, didn't spend much time with the family, gave up lots of my hobbies (skiing too a big hit), etc. In the end the $$ savings was worth it....don't know if I'd have another one in me....at least not for a while :cool:

However, I like doing this type of work.....going to help a buddy frame and sheet a garage tomorrow :cool:

jkski
05-25-2012, 11:14 AM
also did all painting, a good portion of the roofing, wiring, finishing, etc.

Was going to do soffits but my framer through me a good price to finish the roof and do those...when work is low, subs will take on additional at reasonable costs to stay busy....he did great work.

Still was a long summer....burned lots of vacation time, didn't spend much time with the family, gave up lots of my hobbies (skiing too a big hit), etc. In the end the $$ savings was worth it....don't know if I'd have another one in me....at least not for a while :cool:

However, I like doing this type of work.....going to help a buddy frame and sheet a garage tomorrow :cool:

Looks nice. Like you, I enjoy doing a lot of this stuff and I can save myself a lot of $$$ doing so and plan to. Just have to balance what I think I can get done with the reality of what I can actually feasibly get done, without actually costing myself more $$$!

Again, nice job on the tile. I have been crafting my skills for many years on my projects as well as those of friends and families, all building up to the day when I would take on the grand daddy of them all, the new house!

Hammer
05-25-2012, 11:15 AM
Just curious - don't you require your trade contractors to do their own clean-up as part of their scope of work? Yes, you will still have to pay to have it hauled off, but if it is in their scope, make them get it to the dumpster and don't pay someone else to do it for them! Just my two cents.

Here is my take on this. I don't want to pay my plumber his hourly rate to clean up. I can hire someone else to do it cheaper. On that note all of my subs clean up after themselves as a courtousy and not charge for it. This is not always the case. And I know there will be things missed. So I bring in one of my guys to go in behind them to do a better cleaning. A jobsite can never be to clean.

Hammer
05-25-2012, 11:18 AM
Looks nice. Like you, I enjoy doing a lot of this stuff and I can save myself a lot of $$$ doing so and plan to. Just have to balance what I think I can get done with the reality of what I can actually feasibly get done, without actually costing myself more $$$!
Again, nice job on the tile. I have been crafting my skills for many years on my projects as well as those of friends and families, all building up to the day when I would take on the grand daddy of them all, the new house!

This is the biggy. If you hold the job up it costs money. Just be careful not to take on too much.