I wouldn't be paying for anything extra that wasn't done.

We have pretty much added extras or gone over budget on everything in our house (sometimes by tens-of-thousands of dollars). Some of the stuff we haven't been charged for at all yet. For other things, the way it has been working for us is after the extra thing is done and installed and in, we get a bill for 50 percent of the overage. This is what happened with our electrical overage, the geothermal we decided to add after the fact, the upgraded extra fireplaces and a few other things. The other 50 percent, I guess we'll pay at closing.

Thanks Beagles. I already paid for extras like the deck we opted to do, basement framing, wrought iron balusters etc. and most of that work is not done. The home has to be finished in 3 weeks for the banks 6 month construction loan agreement. I want to ask him for a signed agreement that these things will be done by that time and then maybe I will offer him half?

JMphoto, why has he not done all of those other things? Basement framing and building a deck seem like it might be hard to get done in 3 weeks if there is also other stuff left to be done too. I would also be asking why he needs to be paid up front for things that haven't been done and why he is so eager to get this money from you. This sends up red flags a little and obviously, if you are concerned bout getting a signed agreement, you have seeds of doubt as to whether he is going to do what he says.

Unless there is some very good reason he has not done all of those other things, I really really would not pay him any more for things that aren't done if I were you. A signed agreement is going to only go so far- if you have given him your money and he does not do what he promised, YOU are going to have to take him to court and incur legal fees to get compensated for the breach.

Most of the other stuff is close to being done. The deck is on along with the steps, but the sides of the deck are not finished. The basement is framed, but not insulated. It seems to be completed most of the way, just not all the way.

JM, I built on my own somewhat so I didn't have a formal extra charges on things with a builder....

however, my advice is, ask the builder. comment to him, that hey you paid for these extras and they're not complete. When are they going to be complete? why aren't they done?

most change orders from my understanding get at least partially paid for before any change is made. besides it being a tool for the builder to get cash now rather than later, its to ensure that A) everyone is in agreement that this is a change and B) that you will be paying for this, it is not included in the original.

like anything else, just b/c it operates one way in your or my neck of the woods, doesn't mean its universal.

I would state my concerns to the builder and ask for some middle ground. besides him wanting money, he may fear that if he doesn't get paid now for it, before you are at the 11th hour, he won't get paid for it.

JM - You have posted several times now about problems with this builder, forcing him to fire incompetent subs, cabinets not arriving until the day before the loan close date forcing a bank extension already, etc. I can't imagine a builder bringing framers/insulation subs, etc., back to finish work left undone, not without it costing somebody extra. As Beagles said, these are all red flags and he seems to be adding more by his actions, not removing any.

I would not pay him any more money until I was satisfied with his answers as to why these aren't getting done and his specific plan for finishing them, including completion dates. I trust you are getting signed lien waivers for all subs as well.

You might also want to have an experience real estate lawyer read over your contract so you know what your options are. I was concerned when you replied in your other thread on your construction loan problems that you weren't concerned about a new appraisal for closing on the permanent loan, "if there is one". There should not be any doubt on this point in your loan papers, if there is, I'm sure your bank will require one. Maybe your market is immune, but most areas have seen a double dip in housing prices with changes in loan-to-value.

Good luck!

Thanks SPF, I appreciate your concern. This is my first time building. Not to sound dumb, but can you clarify for me what you mean that you are concerned about the final appraisal? If I am correct you are thinking that the home value would come in less than what I am financing? If that is the case, I am not concerned about that since I have already paid for the land which was over 90K.
I had a long meeting with the builder and he has a schedule of what needs to be done and when we can expect it. All the work that is undone as I mentioned is all work the builder has been doing himself, not subs. The only subs that need to come back are electric and plumbing and HVAC.

JM - Not a dumb question at all as the whole appraisal process is very confusing and complicated, especially for a first timer. Yes, the risk of having your finished house appraised at a lower value than what they used for the construction loan is what I am talking about. It doesn't matter what you paid for the land, that can also decrease in value. We are in the same situation as you (owned the land) and almost did not build at this time because of a terrible time with the initial appraisals that came in very low, including up to 50% less per acre for the land. In our area, if we wanted to shop for a permanent loan out on the open market, I'm sure the appraisal would come in lower today.

The bank is only interested in one thing: If JM walks away, what can we quickly sell this asset for on the open market? And that number has little to do with how much you paid for the land or the cost to build.

Glad to hear you have worked out the concerns with your builder!