Builders Profit

18 years ago

What is typically builders'/GC's profit on the build of a house? In other words, what percentage of my new construction shall I expect to pay to the builder for non-material and sub-contractor work?

Thanks.

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Comments (5)

jaymielo
18 years ago
I think the general range is 10%-20% (I'm guessing on the high end because it varies greatly by region) of the total cost of the build (materials, subs, etc).
longus
18 years ago
for us in Sacramento - CA (where the housing market is really down and contractors are looking for work) the builders are charging around 10% (however, they are willing to work with you to get the project)

one thing to keep in mind though is that the builders will pad the allowances (I've compared bids from builders on the same plan item with separate sub-contractor bids and I can always get a lower bid from the sub directly) - so you shouldn't just look at the profit/mark-up percentage but look at the project's overall cost to see if it makes sense
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bellamay
18 years ago
Longus has given you incorrect information. Builder don't "pad" pricing. There are 2 types of builders 1 is a bid price with change orders, the other is time and material plus a fee. To say that the fee is the builders profit is not exactly right either. A lot of time goes into the pricing process and supervising subcontractors which is not charged to the job. And the advice about negotiating the fee down is bad advice. You may get a builder to take on your project by beating him down on the price, but expect change orders and a lack of commitment to your project. Find a contractor that you like and work with him by having your plans as detailed as possible so that he can give you a realistic budget for your project.
kandkwi
18 years ago
In Wisconsin, our Builder/GC originally charged a 17% profit but reduced it to 16% (due to the poor economy and because subcontractors were).
longus
18 years ago
my advice was to not look at the profit/mark-up percentage number only but to look at the total cost of the project to make sure that you can afford what the builder will charge - and yes builder will charge you for supervision time (maybe not bellamy) but I've looked at my two bids from 'builders' and they have specific line items for supervision on top of their profit, and everything is negociable - even the best builder will have to adjust their price to get work in a tough market