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wanda_sieber

Should a GC share building cost data for custom home with owners?

Wanda Sieber
7 years ago
GCs: I need your input.

We've been working for a very long time with a GC whose son does the job costing. We began the basement dig this month but hit bedrock. After looking at hammering or blasting vs redesigning the home, we chose the latter. I sent the GC & son this yesterday:

"In preparation for the rebidding process, I need you to send me the spreadsheet you use to calculate the bids. I had requested the bid in spreadsheet form before, but your dad said the policy was to do the narrative bid first, then after signing share the spreadsheet.

"Since we’ve already signed, I’d like the spreadsheet for the basement plan. We’ll use this to make adjustments as we finalize the crawl space plan. Our expectation is that with increased visibility, we can see where we might make additional tweaks in our choices, allowing us to make better decisions on our end. I know that lumber, etc. will change, along with other things outside our control. Having all the numbers in front of us will let us see the details of the big picture."

I received this response from the son:

"We are all disappointed by this and share your frustration. I am attaching an example of a cost breakdown spreadsheet from a different project. I prepare this for the bank prior to the first draw on the construction loan and it is the extent of the detail we provide to our customers with respect to our costs to build the home on any given project and this is what I had indicated I would share with you after we were under contract and prior to your first draw. Since we did not get that far on your project, I did not go so far as to complete this form so unfortunately I don’t have one to share and to put one together now would be redundant effort and, even if I did put it together, I’m not sure what useful information you could glean from it.

"I do not have a format of anything else that will be meaningful information as I don’t have a separate spreadsheet I can just churn out for just the cost of the basement. The costs of the basement are co-mingled with the cost of the above grade levels in so many ways (for example, your HVAC, electrical, and plumbing proposals that you have copies of you can see aren’t breaking the basement out separately and that holds true with several other subcontractor proposals we have here) that to separate everything out now is a substantial time investment and I’m not sure to what end it will really accomplish anything since that time could be best spent on pricing the new plan which, by merit of changing the basement to a crawl space, will inherently reflect that cost difference.

"If there are particular requests that I can try to answer on a case-by-case basis to help you determine the best decision to make at each juncture, that would be our preference since I can then try to give a better big-picture assessment of the net cost for that decision or change. Each change can impact a dozen material or labor calculations so it’s not as simple as just handing over the controls of our customized pricing program to you to do your own pricing because it would just be a pandora’s box of information overload to someone who doesn’t do this day in and day out. That’s not meant to be taken out of context so as to come across as belittling of your ability to comprehend it, but it’s just matter-of-factly stating that we are professionals that do this for a living and have a knowledge and methodology of determining accurate quantities for material and labor based on plans and specifications that it just can’t be expected of someone who doesn’t do that kind of thing day in or day out for years and years to have the same proficiency with.

"I understand that you and your husband are extremely intelligent and knowledgeable and analytical. I am also very analytical, so I can also respect you wanting to dive in to the pricing model to make sense of it for yourself and number-crunch all kinds of different hypothetical scenarios to see which would be best for you. There just isn’t a way to hand over that kind of information. With custom building being so, well, custom, there is just not the kind of streamlined system in place I feel you imagine there to be. I wish there were, but everything with custom building is a one-off. And while many things stay the same from house to house, there are just as many things that do not which makes our job to set pricing expectations so difficult before we actually dive in to the nitty-gritty details of a specific plan and spec since we’ve never built that exact plan with those exact specs on that unique building site before. This is exacerbated with your project given the uniqueness of the building site and design being anything but ‘cookie-cutter’. I hope you can understand and respect that. I want to be helpful and I feel you will be disappointed that we cannot be moreso to the end you are thinking we can be. The best I can offer is to try and help you evaluate each scenario on a case-by-case basis."

My question: am I asking for too much?

I realize other owners might have strong opinions on this, but I'm really looking for input from GCs about this. Is this normal for home building Pros? We own our own business and crunch numbers on complex spreadsheets all the time. My intent is to gain visibility and do a good job at getting most of what I want while still coming in under budget. Thoughts?

Comments (25)

  • Wanda Sieber
    Original Author
    7 years ago
    This is the view from the hypothetical house. Hope to get in soon!
  • PRO
    Solar Texas
    7 years ago
    Geez, what a convoluted response. There's a lot of guesstimating that goes into some projects in the early stages. I just assume that one of the reasons behind the reluctance to share the data is that the GC feels that he might have to explain in detail his estimations when much of them are simply plucked from thin air based on past experience.
  • PRO
    JAN MOYER
    7 years ago
    last modified: 7 years ago

    "Soon" and "under budget"? That alone is too high an expectation for a house that isn't spec or "cookie cutter". You also didn't specify the method by which your builder is pricing. Cost plus a percentage? If you signed a contract based on a finished number without every single selection and finish detail in place, you are asking a mythical number in any scenario.

  • Wanda Sieber
    Original Author
    7 years ago
    Our contract itemized for Windows, doors, flooring, cabinets, excavation, foundation, gutters, siding, plumbing, HVAC, electrical, roofing, fireplace, counters, stairs and sub's written bids were included as support documents. There was no breakout for lumber, etc., no problem. Based on prior conversations, I thought the spreadsheet used to create the narrative bid could be shared with us so as we revised the plan we could make adjustments as needed to allow us to stay under our magic number. I didn't expect to hear a spreadsheet didn't exist. Based on what we WERE given, I can create one, but I didn't expect I'd need to do this.

    We've owned this lot since 2008, so to me "soon" means 2017.
  • PRO
    JAN MOYER
    7 years ago
    last modified: 7 years ago

    No clue where your house is located, but around here, the house most want, the one of their "dreams" with great kitchen, high end appliances, beautiful baths, flooring , finishes.....is NOT less than 350.00 - 500.00 per square foot. Everything under that is pretty much basic builder suburbia. That's before the fabulous outdoor kitchen or a turret:)

    Wanda Sieber thanked JAN MOYER
  • Wanda Sieber
    Original Author
    7 years ago
    last modified: 7 years ago

    This is a question about contractor processes, not cost. My question is: "Is it reasonable to ask for a spreadsheet on housing costs so as we make the needed changes to the plan, we can have visibility on new costs and adjust other items to stay in budget?"

  • PRO
    Brickwood Builders, Inc.
    7 years ago
    last modified: 7 years ago

    If I understand your scenario, due to lot issues a basement was removed from the scope of the project and instead you will have a crawl space. Your contractor owes you a new contract price and an adjustment to any allowances that are affected by the scope change.

    It is our policy not to share line item costs with customers - unless we are working under a cost+ contract arrangement (which we seldom use). We share the allowances that are included in the contract down to each item within each allowance category - lights, doors, windows, tile, plumbing fixtures, appliances, flooring, roofing, siding, etc. We consider allowances to be only those items that the client can select. The allowance schedule is part of the final contract.

    It is our business to decide how the construction will be done, what subcontractors will be used and what materials are needed to properly do our job. Our contract is roughly 15 pages long once we put in the extremely detailed description of what work is included in each phase of the project. This description also includes any area where you might be subject to increased costs as a result of uncovering issues - such as boulders in the area where the foundation is planned.

    IMO, it is not a reasonable expectation to ask for the cost data. I am always amazed that consumers feel they can ask a GC for this, but don't ask any other professional with whom they deal for this information. I would love one day to understand why. I can't imagine going to my doctor and asking them how much of what I pay is going for their salary and how much is going to various materials used in my treatment, how much is going to cover overhead costs and what $ each of those items is. I would also be curious to know if you disclose that to your customers. Maybe you are in a business where it is customary.

    Wanda Sieber thanked Brickwood Builders, Inc.
  • Wanda Sieber
    Original Author
    7 years ago
    Oh! Ha! It never occurred to me that when I was saying "cost" people were reading it as the GC cost! I mean OUR cost (the GC "sell" if you will). I'm looking for a spreadsheet where each of the categories add up to be the total amount we were quoted for the build. I know there are sections of the build I'll have no control over and I'm plenty OK with contractor profit. *I* need the interactive sheet so that as we incur additional costs for the new plan, I can downgrade other items and stay in budget.
  • User
    7 years ago
    All I know about new builds is every change costs money and time. And since time is money, it's best to stay with your plan to keep things on schedule.
    If you are working with a specific budget, your GC can downgrade some of the materials and finishes to stay within your budget. Remember every change you make, will require a new plan drawn up and materials purchased.
    Wanda Sieber thanked User
  • PRO
    BLDG Workshop Inc.
    7 years ago

    I'm not a contractor, so I don't presume to speak for them...but...what he's kind of reluctantly half-saying is that there is so much variability in the process that there's nothing solid to give you.

    If he does give you something he'll immediately be painted into a corner based on an expectation of the process that doesn't reflect the real-world outworking of the process.

    That's simply to say (at least in my experience) is that the process is presented as fairly black and white for the sake of the homeowner. In reality, it plays out as more of a moving target that the contractor has to wrestle with daily to keep the pricing and schedule on target.

    As long as you feel you can trust your contractor, my soft advice would be to give them the freedom to run their process as they're accustomed. Too much holding-feet-to-fire tends to sour the process. I don't think this is your intent, but I could foresee that being a potential outcome.

    Oh by the way, what a place!

    Wanda Sieber thanked BLDG Workshop Inc.
  • PRO
    Ellsworth Design Build
    7 years ago
    Is he providing numbers for the parts or just a grand total? For instance my 'foundation' line item includes the mason, my management, site prep so the mason doesn't destroy the surrounding property, the special bolt the engineer selected. None of this can be cherry picked out, so you only get the final number.

    Additionally, depending on the estimating program they use it may not even print a spreadsheet per se. We use quick books and it does not.
    Wanda Sieber thanked Ellsworth Design Build
  • bichonbabe
    7 years ago

    Are you financing this with a construction loan ? The person processing the draw should have a running total of actual costs.

    Wanda Sieber thanked bichonbabe
  • live_wire_oak
    7 years ago
    last modified: 7 years ago

    You only get a line item total if you are doing a cost plus build. If you are doing s fixed price, the builder is under no obligation to share with you anything but the bottom line. The exception to that would be for allowance items that go over your allowance.

    If you have "excavation" at 10K as an allowance, and it comes in at 20K, then you owe the builder 12K. That is the 10K difference and his 20% markup. But, he would need to furnish you with an invoice after the fact. The price of some changes cannot be known in advance. That is why you need a 20% contingency budget in reserve.

    Wanda Sieber thanked live_wire_oak
  • Wanda Sieber
    Original Author
    7 years ago
    Thanks for all the input. It never occurred to me that a modern business would use a program that couldn't spit out a spreadsheet. Formulas and spreadsheets are so integral to my businesses and the customers we serve that this is a mind-blowing idea!

    We ARE using a construction loan and I was asking for the info from that very document. Even though the loan was written and the excavation done, the rest of the items cost ("sell") had not been transferred to that working doc. The son (who does the job costing) will not do it because it feels like redundant effort (his words, see email above) since we will have to rebid many things.

    I expected the numbers to already be in that doc and shareable. Based on feedback (thanks, everyone) I will assume that the contractor does not use a spreadsheet in his process and does not have one to share.

    I can pull the numbers myself from the prior narrative proposal, dropping the pricing from the subs into a spreadsheet I create. The difference between all those quotes and the final price quoted I'll just enter into a cell called "lumber, etc" to complete the "old plan" column. I'll track the new pricing in a fresh column and do the best I can to make adjustments to our choices to offset the increased quotes on the adjusted plan.

    Since we are again at the back of the line for plan redraw, quotes, appraisal and permitting, we'll have plenty of time to nail down the details and eliminate the on-the-fly changes everyone tells me are deadly.

    Thanks for sharing your experience. Compared to other businesses I've been exposed to, home building feels a bit like the Wild West.
  • User
    7 years ago
    Is this a design/ build firm? You may want to consider hiring a designer to help you with the multitude of choices you are going to have. If you and your husband will be working the entire year the home is being constructed, you may need a project manager to take some of the stress off of you or you may go nuts. You need to have complete confidence in your builder. If there are red flags, this may not be the firm for you.
    Where is Sophie when you need her, lol.
    Wanda Sieber thanked User
  • Denise Marchand
    7 years ago

    Yes it does feel like the Wild West sometimes (I'm going to have to steal that line)! In my experience, as a design consultant and interior designer in the NYC area, it is rare that the client wants a spreadsheet for the project. It is understood that you want to be abreast of costs and budget in order to make educated changes. Before hiring a GC, we would have a completed set of plans, and spec all finishes down to the paint company and color, all approved by the client. Then hand it over to the GC for structural engineering, etc. and a bid. Anything other than what is on the specifications is a change order.

    When you hired the GC, I am sure you were familiar with his work, spoke to his references, and agreed on a budget. Usually clients are their own worst enemy as some compromises on job sites work themselves out with all the professionals involved.

    A general breakdown on the project is given at the original bid stage. You may feel more comfortable with the father on this one.

    Wanda Sieber thanked Denise Marchand
  • PRO
    Berg Building & Remodeling
    7 years ago

    Wait Wait Wait. You are doing a new home build and this GC did not give you a estimate that had all your allowances broken down like Tile, cabinets, flooring, windows. This is a great scam. Every time you go to pick a tile, or the wood flooring you want or the decking you want the GC can say I'm sorry but that tile is more expensive then what I left for an allowance you owe me more money. I'm in Boston and around here that is usually standard when building a new home, at least show the client the subs cost and the allowances that you left. Knowing what you have for allowances for cabinets and tile and counters will enable you to shop ahead and pick the stuff out now so your not causing delays when you cant decide on what granite you want. When estimating a job a contractor figures out the price on everything. He does not say ok I think the foundation, framing, roofing and siding will be 60k. No no no every single portion of that job was priced individually. How would a builder come up with an accurate cost unless he figured out how much things were going to cost individually. For example lets say I'm building you a home for 100k. In my notes I know foundation 5k, framing 5k, roofing 10k and siding 10k but in the estimate I give to you it might not be broken down in such detail it might just say exterior portion-30k. Think about it. Your building a 1 mil custom home. Any one estimating that job has to price every single phase of the job. Asking for the old foundation cost at this point is useless. When the new bid comes in if your looking to save money ask him about different designs to save money or ask about your allowances for the interior finishes. Ask him point blank where you can save money. You could look at a spread sheet that has the hole job broken down to the very screw but I don't see how looking at the prices of everything will give you insight on how to build things for cheaper. What if you look at the price break down and say wow those lvl beams are very expensive I think we should use something cheaper well those lvl beams can not be substituted. Your not a builder you don't know what design changes will save you money. Let him tell you that. He was to pay a guy to come in and dig the hole. He has to pay a roofer to come in a put the shingles on the roof. You mean to tell me he didnt know how much that stuff cost and he just put a random number on it and said I will figure out the actual cost of the roof later. Contractors don't want to show a home owner to much info but a honest guy would have no problem showing you what your subs cost plumbing electrical HVAC ect, and then it's up to him how he shows the rest of the numbers some guys will show you the sub costs and then say ok the rest is material and labor for me. Ii think you should be shown the sub cost, allowances for finishes and then you can say ok the rest of the money is obviously for mandatory material like framing, roofing and stuff that doesn't get picked out. Maybe I have the situation confused I just never heard of a gc saying ok the project will be 1 mil sign the contract and then after you sign then give you a break down of costs. like what if you get the break down and he left 500.00 for tile and 100.00 for cabinets. I hope this helps private message me if you want.

    Wanda Sieber thanked Berg Building & Remodeling
  • User
    7 years ago
    last modified: 7 years ago

    Bids are for an auction. Estimates are what lead to contracts, and contracts are where your budget is listed. Change order procedures are listed in your contract. By the time you sign a contract, you know what your budget will be. Plus a contingency for the inevitable changes.

    You've already signed a contract. You don't get to start over. You are past the stage of estimates and changes without repercussions. Your foundation issue falls under a change order. It will cost what it will cost, and you pay what it will cost plus the builder's percentage. There is no ''negotiating'' a change like that after the fact of agreeing to it. You write the check and move on. No reneging or renegotiating on a signed contract. Not unless you want to be in breach and subject to a lawsuit.

    Wanda Sieber thanked User
  • Wanda Sieber
    Original Author
    7 years ago
    last modified: 7 years ago

    Great clarifications, Sophie. If I were to rewrite my opener, I'd say, "I'd like my GC to provide the estimates (all our allowances) for our build in spreadsheet form, We have the estimates in our Building Construction Specification (along with the detailed supporting documentation from each of the subs), but have since had a major change (no basement possible, so we have to redesign the whole house to accomodate moving rooms). I'd like a working spreadsheet so as new estimates come in, I can see their impact and downgrade some of our other choices (allowances) to stay within budget." My surprise is finding that homeowners aren't provided with spreadsheets to help them control their own need vs. want price issues. I see from the comments above that GCs don't supply this. If clients want this format, I guess they just have to do it themselves.

  • PRO
    Brickwood Builders, Inc.
    7 years ago

    I think most builders DO provide information on the allowances, but not on the remainder of the project components. What is considered an allowance may vary builder by builder and could vary project by project for the same builder (ours do). Our estimating software does not provide any information that could automatically be pulled over to a spreadsheet (like in Excel). We create a spreadsheet type format for allowances and it is attached to and is is part of the contract. It is very detailed - it doesn't say $10,000 for plumbing - it says $x for a sink, $x for a tub, $x for shower faucet, $X for the plumber, etc. on down the line. What most people don't provide are the building components and management pieces.

  • PRO
    Jorgenson Builders
    7 years ago
    This is based on the contract you have with that builder. We do a hourly rate agreement with customers for estimating time and if we are under contract can quickly provide a rough estimate by line item for the "option" of removing the basement. A few minutes of taking concrete costs, framing costs, excavation costs, and the other items directly pertaining to the proposed option to eliminate the basement should give you enough info for educated decisions. We do that all the time with customers on renovations. We do make it clear that those are estimated savings but we list out our assumptions on how we got to those numbers and we do so conservatively.
  • PRO
    JudyG Designs
    7 years ago
    last modified: 7 years ago

    Could we jump back to 2008? From whom did you buy the lot and did an engineering firm (either yours or the sellers) conclude that the property was buildable and had no issues? Like: "are there problem soils, including expansive clay, un-compacted fill, or ledge that may require blasting."

    I am surprised that you got this far into your plans to then discover ledge was going to muddy the waters.

    Before we began construction, just to get a building permit, we had hired a surveyor; had to do a perk test for the septic; conservation was involved because we were close to the water and they had to approve of anything environmental....on and on. Buying and building on raw land isn't a walk in the park, so you have my sympathy.

    You say you have the construction loan and to have gained that approval, the lender had to have seen a construction
    timetable (loans are usually 12 months), detailed plans and a realistic budget. No engineering report was requested?

    I know that I am not answering your question (because I can't professionally), but we have built on raw land a few times and something just seems wrong here, starting in 2008. I can't understand how those involved as professionals did not see a red flag with the ledge and inform you of that issue. Otherwise, you would not now be "redesigning" the home.

    Watch out for that 12 month loan restriction.

  • Libby Hartman
    7 years ago
    I want the same thing you are asking for and for the exact same reason. If a concrete floor is tons more than a hard wood for example, i may make a trade off so that i can afford two Big folding doors to the deck. I will never hire a GC that will not partner with me in this way. In fact am considering hiring a knowledgeable PM and GC'ing myself.
  • Denise Marchand
    7 years ago

    I am not one for replacing a GC ever, as the outcome usually costs more money with wasted time and energy. That being said, sometimes if you are confused, not happy and do not trust the information you are given, you may want to consider walking away from this GC. (I can just hear everyone scrambling to comment! Run, Forrest, Run!) You will start out with someone new knowing exactly what you expect from them and what they expect from you, therefore, clearing the air before you even start. It's not too late and may save you sleepless nights in the process.