I'd say your concerns are well founded. Unless I don't think it's feasible. I'd look for another GC. My hunch is he is looking for a sucker.

Sues' on the money, as usual.

Find someone else. Never heard that one.

I am gc'ing my home and I worked out a per hour deal with one of my subs .
I supply all materials and he supplied labor . I was onsite everyday and this
helped him out with his cash flow . In the current economic climate - it is
much harder for contractor's to get lines of credit than it was 3 yrs ago.

"Unless I don't think it's feasible."

Wow, bad proof reading on my part! That Unless shouldn't be there.

Often in good times, the subs bid jobs that can result in very high per/hr charges. I suspect that paying them by the hour now will result in things being cheaper than they have in the past. Then there is the cash flow issues.

I had a $7000 low voltage budget which is what a similar house had cost. I did it myself and one of the low voltage guys offered his help at an hourly rate. That rate was certainly less than he would have gotten if he bid to do the job - in fact probably about 50% less.

Fine to be suspicious but the reality is per hour can be a much better deal. These people are fast....

Another example - our trim guys took about 100 man hours to do our house. Our bill (not per hour) is about $10,000. If the guys came in and said it would be X$ per hour - I'm sure that it wouldn't be $100.

david_cary - just wondering, what exactly did your trim guys do in 100 hours? Just put up the trim (how many windows/doors, lf of baseboard, any crown?)? Or stain/finish it too? Do you think it would have cost more than $100/manhour? Did that $10K include materials?

I'm finishing all the trim in our house (modular so came with the house, except for replacements I've had to buy due to damage/warping/cut too short). My cousin has given me a really good hourly rate to (re)cut it, join casings at mitres so we have tight joints, and put up all the casings/baseboards. Of course, he had to reset a few doors, remortise the front door after the deadbolt broke in locked position and I pulled it out and got a new one, pull out 1 window jamb and rebuild it, etc. I've got to look and see how many hours he's spent, but it's got to be 50 and we're nowhere near done, and I have countless hours ahead of me staining/finishing sashes and doors. If you trim guys did any finishing, you got a deal!

I'm looking for number to tell DH all the $$ I'm saving him by DIY and not hiring someone to finish. I'd nail the trim up too, but cousin is experienced carpenter and has compressor/nail guns.

I wouldn't build a whole house that way - too hard to keep track of all the hours. I might have paid too much for electrician and plumber, but at least I had a fixed price (well, there were some extras for electrician) so could budget. It was hard enough to keep track of hours for excavator.

I would actually be more concerned about paying subs hourly in a bad economy. If they don't have another job lined up they may be inclined to drag out the one they are on.

Examples where you work side by side aren't relevant unless that is what the OP is talking about, I don't believe she is.

There were a few subs paid hourly on our house. But only guys I trusted completely (one being my BIL). Story-the plumber mentioned to DH he could do the radon vent pipe (the part running through the house to the attic). It was a couple hours work, max. DH said "sure". Plumber charged us master plumber rate for about 5-6 hours. $85 per hour to cut and glue pipe (not to mention the ridiculous price he charged us for the apparently diamond-plated pipe). He had his apprentice installing (and breaking and scratching) toilets and faucets, but HE had to do the one out of bid thing on the job? I was POed. But paid it, didn't have a choice, really.

I'm sorry, david, but your business practices sound upside down to me.

DH is a plumber. Repairs and small jobs are per hour + materials + markup. Larger jobs are bid. He estimates his hours, DISCOUNTS them, DISCOUNTS the markup on materials, and bids the resulting flat fee.

He can reward the customer for bringing more work to him in the same job because he can depend on having that much more work in one place, filling up days, rather than running here and there for a few billable hours. Figuring billable hours against available hours, it is greater fixed profit on a higher volume of business, therefore deserving of some discount to the customer.

That is how all the other subs we know do it. If your company is getting away with charging a premium for bid or larger jobs, that is just backwards IMO. You should be discounting larger jobs, not milking them.

On a larger job, and I think building a house qualifies as a larger job, I would compare bids to bids. If times are tough and people are competing, they should be figuring their time correctly and discounting as much as possible just to stay operating. On time and materials, you have no idea how far your budget will go unless you cap the finish time in some way--and then it becomes a bid.

I know this is just slightly off topic, but there's no such thing as the "going square foot cost". Square foot costing is widely misunderstood; it's a means to roughly compare the cost of one finished home to another, not a way to price an unbuilt project.

It's a technique used to give homebuyers the impression that one house is a better value than another - because it costs a little less per square foot.

SF costing gives builders carte blanche to provide whatever level of service and quality they can, since the price has already been established! Obviously they're motivated to cut costs wherever they can.

Use SF costing ONLY to get a rough idea of what a project like the one you're considering might cost, given roughly equal conditions, complexity, size, and quality.

SF costing can be hugely misleading! For example on a 3,000 square foot house, you might spend $600 on a simple fiberglass tub, or $0.20 per square foot. But change that one item to a $3,000 jetted tub and you've suddenly added $0.80 psf to the cost of the whole house.

It doesn't take many of those kinds of things to turn your $125/sf house into a $150/sf - and you're left wondering what happened!

The way to get the best price for your house is to put together a detailed set of drawings and specifications and bid it out to several builders - preferrably smaller, true custom home builders, rather than "production" builders.

Richard Taylor, AIA

Hadley - these are not my business practices - I never charge by the hour. I'm just saying that, when subs were busy - they got used to bidding pretty high. Now - they might be in a totally different mindset and doing things on a per hour basis might not be a bad deal.

When I was fixing line items on my last house, I found that I got better prices when I did it by hour. The bids get so overinflated sometimes that just doing it by hour brought the costs down. The bids came with hour estimates that they stuck to (so it was not truly a per hour deal). But if there were unexpected problems - I would have foot the bill.

It is like doing cost-plus vs fixed contract. In good times, the fixed contract has some very nice profit built into it and some leeway so that even if there are unexpected costs, the builder will profit. The cost-plus puts some of the risk on the homeowner and therefore the average cost is lower (since in a free market, risk is rewarded). Obviously, this is not always true but from a theoretical free market business transaction, it makes sense.

We have framers per hour (for extras), graders per hour, drywall per sheet (the truly best method). Others are obvious for things like flooring - per sq foot. Don't you think the subs are getting the same per sq foot as they did 2 years ago but the ones that change to per hour also cut their rate when they do that?

The only sub that went down is the drywall hangers went from $5 to $4.50 a sheet.

We are the GC on our own home and no way would I ever allow per hour for payment. When I was getting bids the contractors would give me that line I would say sorry I need a bid for the entire job set in stone in a contract for the bank. The bank won't give me a loan without set locked bids and it worked. Those guys out there that wouldn't give me a set bid I just moved on until I found someone that would. Don't be taken for a fool that's no way to build a house - hourly are you kidding! I would def find a new GC or consider running the project yourself. It's going very smoothly for us and we never did this before.

The only people I pay by the hour are day labourers and occasionally, a trusted trim carpenter doing extras.

thanks everyone. the sad part of this is the guy is a work associate of my DH and DH is trying to get the guy some other jobs and stuff so to maybe be screwing us over is not what I would have expected.

I think you are foolish to assume that he is out to screw you over just because of his statement about charging by the hour. Peoples concern over labor by the hour to me just speaks of paranoia and inexperience. Yes - if I was OBing - I would be concerned about a per hour bid - because I wouldn't really know what I was doing. Obviously if your GC trusts a sub and knows them well - why not do a per hour charge.

People are so suspicious when building houses - like it is a lot of money or something. No question - a lot of people get screwed when building a house. That doesn't mean that everyone is out to screw you - the vast majority of people are hardworking and honest - try not to forget that.

The sub-trades who are paid by the hour are also expected to complete a certain amount of work, so, in effect, they're paid by the job.

To assume that a homeowner can do the same type of monitoring is wishful thinking.

If you're set on stimulating the economy on your buck, by all means pay by the hour.

If you read the last part of my post I said not everyone is out to take advantage of people but unfortunatly there are alot who are especially in a bad economy. There are always undercover reports on the news where the subs took the moeny and ran. My main concern was keeping track of everyone hours on the job if most were being paid hourly and the chance that the GC would have their interest at heart not hours. Building is alot of money unless your rich and you don't care where or how your money is spent.

I think I have a right to ask about an unusual business practice even though it may be more common than I realize or something that might be beneficial to me. We were going to go with a modular company to build a cape style home and the price was $400,000 and a local builder priced it for me and gave me price of $300,000 so there are people looking to rip other people off in my opinion. A cabinet company wanted to charge me $19,000 for unfinished maple cabinets and another company was $7000 and there were only 2 small differences that did not make up for them being $12,000 difference in price. I understand that everyone views their product as better than the competition but come on $12,000??? Of course they didn't even try to explain or sell me on better customer service or anything as a reason to pay the extra $ they just didn't return my emails so they are guilty in my book.

I totally understand the price per SF not being acurate way to price b/c it's all about the details that go into the house. One colonial could have top of the line everything were as the next could have basic trim, no crown moulding, laminate counters, crappy cabinets, cheap carpet, etc. That all makes sense.

In desperate economic times there are people who do whatever they can to make money to feed there family and could care less about the people they screw over. I'm all for the good people making there money and supporting there family but just want to be careful. I don't want to be told that a job will take 20 hours at $ per hour and then all of a sudden it took them 40 instead and twice as much money. Of course I would have no idea how long they were actually there b/c I can't sit on the job site all day with a 2yr and oversee them and the GC to make sure they are being honest.

I think asking questions to professionals and other people who have built their own homes is smart on my end b/c most people think a woman is dumb and neive. When they realize that I do my homework and research things they learn quickly not to screw with me. Building a home is alot of money to the average person and not something you can return if your not happy with it or the customer service in the end.

Did that $400K for the modular include the site work and the land? I know you were getting your own cabinets, flooring and I think trim. Seems really high for a Cape (finished upstairs?). And you said Westchester was more $$?

I don't recall exact numbers, and I have to update my spreadsheet (on another computer or I'd give you the major expenses like sitework), but we paid Westchester roughly $200K for the (modified) Newport model with a panelized garage (25x28). Another $14K or so for front porch (onsite). We already owned the land, but we spent about $25K from savings, $300K from loan, about $18K on Home Depot card ($7K of that was carpet!), and I'm not sure how much out of DH's paycheck during the building process (maybe another $10K?). So let's say $360K and that includes a $36K geothermal system, all the site work including excavation, 3 wells, septic (and the engineer, soil scientist, permits). Inside it includes cabinetry, finished floors except in DR (did that in 2008) and master bath, all fixtures except the master bath sinks and faucets (incl Roman tub faucet). It includes the appliances I bought from Sears (app. $4000) and the ceiling fans (5) we bought from Lowes, as well as what we paid the tile installer, the electrician, and the plumber.

I continue to spend a few hundred or thousand here and there for things like the island countertop, master bath fixtures (eBay), DR floor, trim carpentry and new trim (the Westchester stuff is cheap and cut wrong) but I still think we're going to end up spending less than $400K (not including land) by the time it's all done.

the price did include site work but it did not include land b/c we bought that a year ago (still owe some money). Yeah imagine owing $480,000 for a CAPE! There are high end colonials around here for that much.

Yeah, and they're finished! With nice flooring, cabinets, etc. Your price didn't include any finish work (except maybe trim?) did it?

not sure what you mean by finish work but they priced out for them (the dealer/builder) to finish everything up like paint and stain trim and rooms put in flooring and cabinets, stairs and whatever else needed to be done. some of their prices were overpriced I think so we probably could have saved some money by biding out but not $100,000.
We're now building a colonial with three gables and wrap around porch for around $300,000 (not with land) so we'll have more room, a nicer house and they are helping me GC it for FREE b/c I've been jerked around by the modular people for so long they know I just want to get it done. They are doing the shell and then we're subbing out the rest with there help. we can use their subs or find our own. I wasted two months waiting for pricing from the modular company when we could have probably been digging foundation by now.

the builder/GC who mentioned about the $/hour hasn't even gotten back to me about the price for cape plans and that was a couple weeks ago. he must be making too much money to be bothered.

OK, I'm on the other computer, I haven't updated the spreadsheet in a year so not all the finishing costs are here, but basically construction costs were (rounded up):

$225K house plus garage plus porch (less Trex, screws, window, and rear door we bought at HD)

$120K site work and subcontractors (electrician, plumber, incl HVAC system install and equipment) - cost overrun on well

$8K garage doors, basement door and window, porch materials, basement insulation (DIY)

$13K professionals(engineer, soil scientist, surveyor lawyer) and permits

Total cost of construction (structural, electrical, HVAC)

$366K for 2700sf Colonial with 7x48 front porch and oversized 2-car garage. So maybe $400K for a similar-sized Cape (with heating system, finished flooring, crown molding, painted walls etc.) isn't really bad, assuming builder pulls all permits, pays the engineer, surveyor, and all the trades? I'm assuming you'll have a garage, but the front porch cost us about $12K labor and materials.

I'm shocked we spent that much, I was really thinking it was less than that, but I forgot about garage doors and such, and wasn't thinking professionals were that much so I was off by a good $12K last night.

Finish work (tile, carpet, HW floors, painting, island countertop, lighting, mirrors, etc. plus landscaping, stone for driveway) - this really needs to be updated since I have bought/spent more in past year but at least $25K to date, probably more like $30K and we still need to finish master bath and build deck/steps out back door. I was off here too last night - had no idea we'd spent that much already.

Unless you really love the land, it seems like (esp. true in this market) you'd get more house for the $ buying existing.

Are you doing modular shell? I didn't get from your last post who was doing it and helping you GC.

I was my own GC - might have saved a bit since I have relatives in construction business (my uncle did excavation and septic and ran underground utilities, though I don't think he gave me a break he did save me $$$$$ by not blasting ledge and he knew good foundation guy). I don't think I got the best deals around on electrician and plumber but they were lower bids than what builder gave me, and I saved the GC fee. I had problems with tile installation that may run me big bucks to work out, I wish I'd had the builder or Home Depot hire installer. Well guy and HVAC install prices were fair but be prepared for cost overruns - they never know where/how deep they have to go to find water and we ended up having to hydrofracture.

maybe $400,000 if it included land but since we have land and it's been tested and approved and septic system designed. we just sold a big fancy colonial for less than what this house would have cost us (of course the house we sold would have went for more in better economy). I just can't picture a 1/2 million dollor cape especially since there are two small ranches in the small subdivison next two us.

the shell company is totally different than the modular. I looked into them last year but we thought we'd be better off with modular time wise and $ wise but they are a much better deal especially since they are helping to GC with no charge b/c I was worried about cordinating everyone and being on site with a 2yr old. They normally charge but they probably need the work and I can really use the help.

we did look into existing but the one we were going to put offer on was $299,000 cape and it needed some work and would have settled on something that had stuff that we didn't really like and then have to worry about trying to sell the land. most people around here like the big subdivisons and the one we are in is small with small houses. you should see some of the houses for sale for $300-400,000 that are crap and/or need work or have 1/2acre.

Just a word of caution: they are not helping GC your build for "free". Very very little in this world (especially in construction is truly free. You'll pay for that "free" consultation somehow.

Remember the mantra: quality, time, cost...you get two, not three.

I totally get what your saying about nothing for free but over the past year they have priced out several house plans and I told them I was not interested in their service (usually $8000) and the pricing was consistant with the current plan we had price. I was looking to see if anything had gone up or looked odd that there might be hidden cost to make up for the "free" service they have offered but nothing looked odd from previous pricing but I know that they still may be getting something. we will be paying subs direct not thru them also.

Basically they're giving you some free advice and some referrals for subcontractors, but they're not GCing it since they won't stand behind subs' work if they're not paying them. You could save some $ by not having GC % tacked onto work, but you take on risk (like I did with tile installer) of having problems and no recourse other than the 1-yr "standard" warranty on work. I don't suppose they are supervising/checking subs' work? Inspector will check plumbing and electrical to make sure they're up to code, but no one may be checking framing, drywall, trim, flooring or other finish work quality and it doesn't sound like you have the time with a 2-yr old. Might want to have them *really* GC it *they have to have GC license not just HIC) if you think they'll do a good job and you can negotiate a reasonable %.

as far framing, drywall that is part of the "shell" along with windows, siding, doors, foundation so they are responsible for all that since that is part of the contract. they said it would be benefical to use their subs for the rest since they are used to working together and if they screw they will not be getting anymore job referrals. so I'm meeting them today and will see exactly what is included in the service.

"the price did include site work but it did not include land b/c we bought that a year ago (still owe some money). Yeah imagine owing $480,000 for a CAPE! There are high end colonials around here for that much."

I don't have time to read this whole thread, but there have been a few negative comments here about the pricing for a cape. I don't understand why you would think that a "cape" should be less expensive than a colonial. I have a 4500 sq/ft cape that is far and away more valuable (and assessed/appraised much higher) than most of the high end colonials in my area. I fail to see your reasoning that a cape should be less expensive than a colonial...

I think of Capes as being smaller because the upstairs is smaller than the downstairs(unless you have full dormers and then it becomes a Colonial if dormers are back and front LOL!). Also a lot of homeowners will buy the house with the upstairs unfinished and make one room downstairs into a BR, then finish the upstairs themselves. But if we're talking finished sf, no difference b/t cape and colonial. A 4500sf house (Cape or Colonial) is a pretty big expensive house. A 4500 sf ranch is even more expensive b/c of the bigger foundation needed.

No offense intended.

the cape we were building was a 2300sf simple cape cod style house. a 4500sf cape is not a traditional cape that most people build so I don't think you can compare them. I wasn't trying to be negative and that's not what I started this thread about.