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njwade

Budget from GC -- acceptable?

14 years ago

Hi, I'm a new poster -- have been lurking for a while as I plan my kitchen renovation, and I have been so impressed with the wealth of knowledge and information shared on this site!

I am hiring a GC to do my renovation -- I work too much to try to keep tabs on a bunch of subs. This is somebody who has worked with people I know, so I decided to go with him without shopping around. My renovation will include a complete demolish of the current kitchen as well as a bathroom and pantry, removing several walls (including external and interior load-bearing), and expanding the kitchen into what is currently a screened-in porch and connecting it with the tv room. The kitchen area will be approximately 450 square feet.

The initial budget before the subs came over and provided their bids was $127,000, which was a little more than I wanted to spend, but it was doable. I just got the "hard budget," which is $140,000 (attached hopefully). I have asked several questions, such as why did the electrical jump to $8,000. The explanation was that the electrician needs to add 200 amps to cover the new appliances. I asked for a break-down on the cabinets, and the "break-down" I received had 3 lines -- one for the cost for the main cabinets, one for the wet bar, and one for the island. I asked about the appliances because I found my appliances online for $13,000 instead of the $17,000 listed on the quote. The repsonse I got was that I wasn't factoring in tax ($1,000) and install ($1,000), and I would get a warranty getting them through his guy. And frankly, I felt like each question was met with some level of frustration for me asking the questions.

I realize it's a red flag that my GC at least appears to be frustrated by my questions, and we are going to have to discuss this before I sign a contract. I have searched the forum and it looks like at least some people think it's acceptable to ask for invoices from subs -- does that include asking for the quotes at this point? Because presumably since the GC is adding 20% for his fee, the other numbers should be just the quotes, right?

For those of you who have used GCs -- does this budget look acceptable or typical? Am I wrong to expect more detail? I need to cut the extra $13,000, but I don't know how to do that without having more of a break-down on how much these things cost. For example, are those 15 can lights running up the electrical? Or did the pot filler jack up the plumbing cost?

And do these charges look anywhere near reasonable -- for example, is paying $500 for insurance typical? What about $3,250 for dumpsters? $450 for a port-a-potty? I know these costs vary from area to area. I am in a historic, intown, relatively high-priced neighborhood in Atlanta, so I assume my cost will be on the high side compared with other places. Also, my contractor is very much in demand and has a number of other projects ongoing.

Sorry for the many, somewhat general questions. I guess I just need a reality check....

Thanks so much in advance for any advice on these questions and for all of the advice you have already given others that has also helped me!

Comments (18)

  • 14 years ago
    last modified: 11 years ago

    Looking at those prices I am thrilled to live in an area where construction prices are cheap. When they installed my refrigerated air I had to have a new box and added breakers and it was only $1,000.00. Can lights were $60 each and the electrical work was $250.00 and all new wiring was ran for the lights. I got my appliances (LFX31925ST LDG3017ST LMHM2017ST) from ApplianceConnections.com for about $4,000 - no tax, no shipping and saved at least 25% plus tax. I ordered Cardell solid cherry cabinets from icabinetrydirect.com in the most expensive door style for $9,000.00 (only 11 x 11 kitchen cabinet area). My remodel was small scale and we were able to do the majority ourselves so I did not higher a GC which I think is costing you a lot. I would get a second bid and if it is lower and you like the first GC better see if he will match it.

  • 14 years ago
    last modified: 11 years ago

    The overall numbers actually sound low for the amount of work you are describing by about 30K. And yes, there's not really enough detail breakout in the quote. However, you are only due copies of the subs quotes if you are doing cost plus, as that is the basis for the contractor's compensation. If you are doing fixed cost, then the bottom line is the bottom line, and how the contractor arrives at that is his own business and you are free to accept or reject the total and move on to another estimate.

    Areas that are low are the framing, insulation (VERY low), plumbing, lighting (very low),millwork (you can spend that much on a good quality single door), tile (very, very, low), HVAC (you will probably need a much more complex redo and add a system rather than just adding ductwork), flooring (VERY low for refinishing all of the other floors and adding on)

    The only way that I see to get your numbers where you want them to be is to cut back on the scale of the project's construction scope, or finish level. It's a lot easier to replace appliances 5 years down the road with something else than it is to remove that load bearing wall at that time. Put your money into the essentials first. But first decide what is need and what is want here. You're planning on a pretty upscale kitchen redo. Does the house and neighborhood support a 175K redo? Because that's the number I'd expect the project to cost by the time you get more estimates from more contractors with more accurate numbers.

  • 14 years ago
    last modified: 11 years ago

    I am sure it will cost more than 140k, so be prepared for that. It always does. And I mean always --- and this is from a very detailed, very anal person who does her research and does not change her mind.

    Anyway, fair warning on that.

    The number does not look high to me, but you should ask a realtor or people in your neighborhood. The norms here in the NY metro are totally different than Atlanta, both for home prices and remodels.

    Dumpters and portapotty numbers look fine ( bummer, huh?). The "general labor" and "cleanup labor" seem odd , esp on top of "final cleaning". But that's small potatoes.

    I will also add, if you don't like your GC right now on Day T - x, you will surely detest him when it is over. Even if you love love him day one, you will probably not love him when it is over. If he is annoyed with your questions, get someone who isn't. I have had my fill of GC's who will not stand behind their charges and try to intimidate you when you question them.

  • 14 years ago
    last modified: 11 years ago

    BTW, is $6/sq foot going to cut it for your tile? Did you select it yet? That looks light as does cabinetry costs. ANd windows and doors only 2500? Are they selected --- you can rack up a ton for Marvin authentic divided lights.

  • 14 years ago
    last modified: 11 years ago

    Thanks for your responses! Live wire oak, the GC told me that this is a "hard quote" and that he was anticipating signing a contract early next week. So I think all the numbers are in. Maybe instead of asking questions, I should just sign up! To answer your question about whether the house and neighborhood can support the project, the answer is definitely yes. My prior realtor has already confirmed that as well. Whether I can fund it is another question.... But it's kind of an all-or-nothing as far as gutting the existing and adding on, so I don't see how I could reduce the scope. I may need to focus on appliances as you suggest.

    mtnrdredux, I really was hoping to be that special person who stays within the budget, but I hear you saying to forget about that. Thanks for your thoughts on those items I had no clue about! I told them I want plain white subway tile for the backsplash -- the house was built in 1918, and I'm trying to keep it somewhat vintage. The cabinets as priced are custom shaker-style face frame inset painted wood. The GC said he works with this cabinet-maker a lot and that he gets good deals with him -- sounds like that might be true. I did not select specific windows and doors, but one of the subs came to the house, and we talked about him matching the windows in the adjacent room. The only doors will be French doors added to the back between the kitchen and TV room.

    I'm starting to think this is a reasonable quote for what I am having done (although I'm sure someone will pop up shortly and tell me it's outrageous!). But I needed somebody with experience to tell me I'm not being fleeced. So thanks!

  • 14 years ago
    last modified: 11 years ago

    I feel the need to say event though my own experience is nothing like yours, I really think you need to go over your numbers more carefully before signing. I think you could be in for a case of signing, starting the work, and the total ends up way, way, way above what you are expecting.

    I know you think you are going to get a deal, but I am not sure how your GC is going to pull this off and even if he does what type of material is he going to be using. I have two french doors I put in my kitchen. I bought them at Home Depot, bought during a 10% off sale on Anderson doors and windows and I still spent $3500 on just the two doors. I have no idea how he expects to get windows and doors into $2500.

    Hubby and I do all our own work. The only contractor I have ever worked with is my brother in law, who we did hire to build the outside of our new addition. It wasn't really a contract. We paid him by the hour, he helped us put up some walls and a roof. So, I am not really sure how these things work. But, if everyone here is giving you the advice that this estimate seems very low for what you are having done, then I would find out what happens if the contractor goes way over estimate. At the very least I would question him for samples of tile and flooring, or brands of windows and doors. If he goes way over budget and this ends up a $200K job, I assume you are stuck with the bill and he still gets his large commission, right? Is there anything in place that keeps that from happening?

  • 14 years ago
    last modified: 11 years ago

    I have done several construction projects over the years and the items that jumped out to me were
    1. lighting allowance of $1000 allowance just means you havent picked anything out yet and he just made up that number, i fyou have to pick out both interior and exterior lgihts as well as ceiling fans, you will spend a heck of a lot more than $1000
    2. tile and tile labor -- my kitchen redos have averaged $2000 for tile and labor and thats a boring avg low priced subway tile, anything nicer would probably be $3000 or more
    3. plumbing fixtures $450? that would get you 2 cheap faucets from lowes, yet you are putting in copper sinks? i would think you would want something nicer in a faucet probably costing more like $500-600 per faucet

    $750 for a main copper sink is really good, I've had to spend $1200-1500

    Why put in copper lines for plumbing? save money and do pvc

    I'm guessing all of the round figures he has used means he wont nickel and dime you to death. You say he has worked for people you know. Have you actually asked those people details like, how much did they go over budget, waht would they change how they handle the GC, etc

  • 14 years ago
    last modified: 11 years ago

    Aside from the interior "stuff", your job has a lot of mechanical and structural work in it.

    The figures for these items seem low. But more importantly, if unknown issues are discovered in these areas, they MUST be addressed or you are at a standstill. Do you have stamped architect and engineer's plans? Do you have the additional 10 or 20 grand to really fix anything that may be revealed, or are you maxed out?

    This in my opinion is the largest risk you face in your project.

  • 14 years ago
    last modified: 11 years ago

    You definitely need to have quotes from more than one builder, IMO. Check multiple references for each builder. Also, if this guy is this much in demand, you won't be getting any bargains.

    The builder we went with charged us on a cost plus basis, which Is probably the fairest to both homeowner and builder.

    Good luck! I have a brother in Atlanta and always enjoy visiting and all the wonderful restaurants.

  • 14 years ago
    last modified: 11 years ago

    i would suggest you take the same spreadsheet, white out/delete the #'s this contractor gave you (after you've saved one copy of course) and let the next contractor use the same breakdown for his bid.
    then you can compare apples to apples.
    we had each bid done however the contractor wants to do it and it was a bear to break it down to compare. once you get the numbers side by side, you can question and negotiate.

  • 14 years ago
    last modified: 11 years ago

    Do you have specified part appliances, part numbers etc for everything on the list. Going into jobs with just $ numbers without knowing what the these $ are going to buy you is a recipe for disaster. If he nor you do not have exact specifications and only allowances as it seems you will never do it for that budget.

  • 14 years ago
    last modified: 11 years ago

    Yes, those quotes are low. Some, insanely low. I'd expect the actual numbers to be 30-50K more, just with the project as described. But, then, there's always the hidden stuff behind the walls you'll have to deal with. There is ALWAYS something that you didn't plan for. It might be as small as the new construction needs gutters run in a different way than is on the home currently, and you might get by with a couple of hundred dollars worth of change order there. Or, it could be as complex as the old gutters were slowly leaking behind the siding, and since the windows weren't flashed properly, the entire wall is nothing more than mush, and that extends down to the sill and the fondation has subsidance because of the flow of moisture disturbing the ground under it. Not only will you have to replace gutters in that scenario, but you'd have to replace the entire wall and do shoring work on the foundation. You've GOT to be have the funding allocated for those "just in case" situations.

    With a project that extensive, and involving that much tearing out and rebuilding, not to mention systems work, I'd suggest having at least a 25% contingency budget on hand before beginning. You will probably need to use some of that. But, it's pretty much a guarantee that if you don't have the contingency on hand, you'll discover moisture damage or foundation issues, and then some of your other project will have to be cut or put on hold in order to address those issues. Things like that come up all the time in older homes, and you've got to be prepared to deal with them.

  • 14 years ago
    last modified: 11 years ago

    It seems like all the charges involved with permitting are quite high but maybe that's normal for your area. Those fees are usually posted on a citiy's website if you want to double check on them.
    I am wondering why you are having to pay $500 for gas, water and electric used during construction. If you already own the house that is being worked aren't you providing the utilities and paying for them on your monthly utility bill.
    Also why do you have to pay for his insurance. He should already be bonded and insured. Its part of his cost of doing business. If he charges everyone he does work for 500 for insurance, how much is his annual premium?
    Just wondering

  • 14 years ago
    last modified: 11 years ago

    Wow, it really never occurred to me that the numbers may be low! I have talked to others he has worked with but not about the budget -- more about the timeliness, professionalism, quality, etc. And I have seen several kitchens he has completed, and they all look great. I have picked out and provided model #s for the appliances.

    I did get architect and engineer's plans done -- they required them for the permitting. I do understand the permitting is very expensive here -- I have been told by several people that the "expeditor" fee is crucial if you want a permit anytime in the next few months....

    I do have extra money I can access -- I was just hoping not to. But I guess I just need to earmark that money. And obviously I will read the contract once I get it to see exactly what the provisions are for overruns. And I'm going to make sure all the extras (faucets, ceiling fans, etc.) are selected and included before I sign on the dotted line.

    Badgergal, you had the same questions I did! In fact, those charges are some of what made me start raising the questions.

    Thanks so much everybody, I can't tell you how helpful this is! Being a fairly recent divorcee, I just have this fear (perhaps irrationally) that contractors, mechanics, etc. are all going to overcharge me because I don't know any better. But I will probe this quote in the other direction to make sure the pricing is accurate. Thank you!!!

  • 14 years ago
    last modified: 11 years ago

    I can't really comment on the budget, but I wanted to share my experience with our simple window/casing replacement in our 1988 house.

    It started with replacing the windows and casings due to mildew issues, and one window actually growing mushrooms! We saved up the $10k for the project to replace all the windows in the house.

    Then when taking the siding off, our GC brought me out to see what was there. No flashing around the windows, he could push a pencil through the wall. No house wrap. No insulation. Most of the plywood was rotted.

    So we ended up replacing most of the plywood on the house, adding all the needed flashing, house wrap, and got new insulated siding (which has done wonders for our heating bill!).

    Plus the sliding door in the kitchen was not attached to the house from, except in one corner that had a huge wad of calk to hold it in place. Because they ran the deck boards parallel to the house with the first one butted up against the wall, the floor under the slider was rotted 3 boards deep with carpenter ants! So they fixed the wood and we put in a new slider with flashing. The only thing we did that was optional was replace the front door, and change out the 2 outdoor lights.

    So our $10k windows turned into $30k windows, plywood, wrap, siding, and doors in the space of a week. I swear every day the GC had me come out to look at something's else they had uncovered. Luckily we had some additional savings, but by the end we had used everything we had saved, and were able to pay the last few installments out of what we earned between due dates. We came out of it with no debt, but absolutely nothing in the bank. And we were lucky to have a GC that made time in his schedule to fix everything right. Sure, he could have done the windows and told us to get the other stuff fixed, he certainly had enough work lined up. But instead he gave us a choice with each problem, and if we wanted it fixed (which we always did, the house was already stripped) he made time.

    I'm sure your house was built a little better than ours. But such a large project is bound to find problems that need to be addressed. Plan on this, and have extra funds ready. And don't forget to post pictures!

  • 14 years ago
    last modified: 11 years ago

    I'm in a large reno project in ATL now. It's a bit larger in scope than this, but it includes a complete kitchen gut and wall teardown too like yours. Our project evolved, as many do, from "let's touch up a bathroom and kitchen" to a small expansion of the overall house to "complete gut down the studs" on the whole house pretty much. Along the way, we got a look at several different types of outfits: 1-man shops, medium sized outfits, design-build firms, and full service GCs.

    Free advice (worth what you pay):

    - I strongly urge you to seek other bids. At least 3, 5 would be better.

    - Your project fits in what I would call "the Bermuda Triangle" of remodeling projects. It's not a small job where you can get away using a GC outfit with small overhead. These guys often have lack of organization / project mgt. skills, but on small jobs with limited scope the risk of that may be worth the reward. On larger jobs, you would use an architect and/or a designer up front to draw plans/specs...then you bid out to the GCs and its easier to compare apples to apples. Sounds like you are trying to use a smaller type outfit, and combine that with no secondary bids and no formal plans/specs prior to signing a contract. This is a recipe for disaster, in my opinion.

    - You are getting too much into the weeds too quickly trying to examine line item by item, and wonder what is appropriate. Some I saw were fine, some were low for sure, and some seemed maybe high. Doesn't matter. You can't see the forest for the tree. Step back and consider your whole approach, with more careful upfront planning, before you spend a dime. We planned for almost 2 years before selecting a GC finally and breaking ground. But we finally found the right approach and partner, and its gone reasonably well. We've had change orders, but they've been fairly small "gotchas" or nice-to-have upgrades we felt were worth spending the $ now vs. later.

    - I would think about a design-build firm for this type project. It wasn't for us, but I think they can help provide some discipline up front to your planning and scope. If you don't like that approach, do some more research on fixed price vs. cost-plus contracts and make darn sure you understand the which party bears what risk in each contract.

    Good luck, keep us posted.

  • 14 years ago
    last modified: 11 years ago

    Ellie, you've gotten great advice and I just want to repeat one item: get more quotes! To settle on someone with absolutely no other input is really, really, really a bad idea.

    Especially on a $100K+ project, you owe it to yourself to perform major due diligence before you sign anything and commit yourself.

    On a not-financial topic: mentioning a recent divorce means you have experienced one of life's top 10 stressors. And major remodeling of one's home is or should rank up there too! So before you move on to this enormously costly and challenging process please be sure you have investigated other options as far as who will do the work. You mention this contractor comes via people you know who have been happy which is a huge plus. You may end up having him do the work too. However I promise you will go into it with a much more positive feeling if you have the security of knowing for yourself that he is the best person for the job, based on your own research.

  • 14 years ago
    last modified: 11 years ago

    If you notice on your quote, a lot of his items are noted as being "allowance" which is his idea of what he thinks you can spend. If you want to stick to the budget that he has given you, that is all you can spend. If you, yourself, want to spend more then your bottom line will go up.

    For eg - he has given you a lighting allowance of $1000 - you need to look at how many lights you are replacing, go out and do some research as to how much YOU think this is going to cost you and then decide if the $1000 is enough. (For us, my DH blew our entire lighting budget on 3 pendant lights and so our lighting budget was out), also price the taps that YOU want and decide if the allowance of $450 is enough, where is the allowance for cabinets knobs and pulls (that can add up).

    You said you were demolishing a bathroom, are you also redoing it or is it being completely taken out.

    Don't try to find stuff that fits into his "allowance", look for stuff that you like and then add the difference to your bottom line. I'm not sure that you are ready to sign on the dotted line. I think you need to look at all the bits and pieces that go into a kitchen and price them out on your own so that you can see if the allowances that he has given you will be enough.

    The painting price of $3500 to me, looks low. What paint manufacturer is he using, is that one coat or two, does it include painting behind the cabinets before install.

    In terms of the professionalism of the quote, it looks like it is quite a detailed one with fairly good explanations. However, if you think he is getting frustrated with you now, I would point blank tell him that you have the right to ask these questions about the estimate because it is YOUR money and not his. I then bluntly ask him, if he thinks he will beable to work with you because if he doesn't think that he can it is time to walk because it is only going to get worse.

    It's a question I asked and one GC paused before answering and looked at my DH- he didn't get the job. But the GC who looked at me and said yes, got the job and our relationship and experience was a good one. You're spending a lot of money and by being careful now means that you will spend wisely.

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