"Is it worth my time to pursue a legal remedy?

Developer/Tract home SOP. Pennies on the dollar credits and hefty markups on upgrades. I would be willing to guarantee this is spelled out perfectly in his best interest in your contract.

"Is it worth my time to pursue a legal remedy?"

If you've got a son, daughter, nephew, whatever, who can rattle his cage for free maybe, but if you're paying full lawyer freight, no way.

Well...have your read your contract? What does it say...?

They have you there - if the house appraised and you are happy - I'd move on. Otherwise, you'll send good money after bad, be unlikely to recover and it will remove joy from your life.

Anything you want can be negotiated before you sign a contract. After? You’re SOL. You learn d the lesson to have your attorney review the contract before signing. You’d pay a lawyer more than 5K to recoup less than 5K.

The builder is a highly rated custom home builder with a A+ rating from the BBB, so I trusted them far more than I should have. It just proves that the rating on BBB is meaningless. The contract means nothing before it's signed. As was pointed out, this should have been negotitated. In the end, they put me in a position to over pay and I failed to adequately vet them. Thanks for the advice. I will continue to use social media to warn potential customers of their unscrupulous business practices.

"I will continue to use social media to warn potential customers of their unscrupulous business practices."

It's not unscrupulous if you had the opportunity to read the contract and didn't. Its the same business model every developer/tract home builder uses, pennies on the dollar for credits and upgrades cost more and many even incorporate a change order fee. They spell it out right in the contract.

I will continue to use social media to warn potential customers of their unscrupulous business practices.

So your boss walks into your office and says, "Hey. Good news, we just cut 10% out of our supplier costs and so since you are now working with cheaper inputs, we are going to cut your pay by 10%."

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In the end, the only thing you ever pay for is time. Cost plus contracts attempt to use cost as a proxy for complexity which is a good proxy for time, however, just because you cut $30,000 of costs doesn't mean the builder is going to see a reduction in time spent on your project. This is why cost plus contracts are usually cost plus a flat fee on the initial contract and cost plus a percentage on changes and overages.

Your builder has a finite amount of time to dedicate to building houses, if you take up 20% of his time, then you need to be 20% of his profit.

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Additionally, your job has a profit floor, which is the profit on a substitutable job. Suppose that the builder is choosing between two projects that will take about the same amount of time and effort to build. The first project gives him $45,000 in gross profit and he likes the project a lot (cool project). The second project gives him $50,000 in gross profit and he doesn't like it as much (boring project). Suppose he takes the second project because he has kids to send to college, etc. Now suppose the second project made some changes and the client expects him to reduce his gross profit by $10,000. Is that fair?

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The point of all of this, is that there are perfectly proper and legitimate reasons for the builder to not lower his margin just because you lowered your costs. He may well be a crook, but that isn't evidenced by the information you provided.

Now the biggest problem here, is the fact that you are starting the relationship off on the wrong foot. If you are already looking for reasons to slam him on social media you are going to end up with a very long list and a very bad build. You are already in the absolute worst position that someone building a home can possibly be in, and it is only going to get worse from here. My advice is to go find and existing house and buy it because if you are already at the threatening to ruin his reputation stage before you have even dug the footers, you are in for a very bad ride.

My contract stated and my contractor verbally explained that his profit % was not going to change if he didn’t do some of the line items on our contract. He said if we added stuff he wouldn’t add anything to that line item — I assumed it was going to be added into the price he’d quote us anyway ;-)...And that if we decided not to do something, he wouldn’t be deducting it from the profit line. I think it makes sense-he needs to know what he’s in for. So he gave us the opportunity to add/subtract from that before we signed the final contract.

Actually...this thread is a perfect demonstration of the importance of reading (and understanding) a construction contract before signing. And doing whatever is needed to achieve awareness and understanding, including sound legal advice.

The thread is also a demonstration that many points of subsequent concern could either be explained and/or negotiated before signing the contract.

And it's a demonstration that few consumers actually do this.

Go figure.

I actually think all consumers do read contracts BUT many don’t fully understand what they are signing and that is why they struggle later. Contract language is often complex and then construction and builder jargon added in makes it even trickier. People think they get it and realize too late they don’t. I had my husband, who is a lawyer, read the contract and explain it to me in sections I didn’t fully understand. I’m a
University education and well read person but it was like reading another language! Luckily one he spoke.

br..........that's COMPLETELY BS!!!!!! If you have 'any' business management you would KNOW this!!!!!!!!!!!!!!!!! Obviously you don't@!!!!!!!!!!!!!!!!!!!!!!!

br..........that's COMPLETELY BS!!!!!! If you have 'any' business management you would KNOW this!!!!!!!!!!!!!!!!! Obviously you don't@!!!!!!!!!!!!!!!!!!!!!!!

To everyone else here your particular style of over the top writing may have them believe that you are a successful business man. However, I am not fooled. You may well have a great product or service, but from the things you have consistently posted here, your business is obviously successful despite you, rather than because of you. That happens quite often.

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Now to the subject at hand, please explain how a business thinks about gross profit. Do you actually believe that any contractor is going to take a pay cut because you bought materials? Of all the things you have ever posted this thread proves more than any other that you are inflating both your experience and your education.

Are you happy with the house otherwise? Quality, timeliness of the completion? To me this sounds like a symptom of a larger problem that is eating at you.

Honestly - life is too short. If your home is done, makes you and your family happy, let it go. And don't hit up social media to kvetch. in this instance, from what I have seen, if you stick to the facts, you'll seem petty. Why let this eat at you?

If you want to know what to actually bitch about, go read my saga thread.

I used to use a straight markup that covered my insurance, overhead, time and risk. Now that lenders show cost breakdowns to clients I break it out.

"To everyone else here your particular style of over the top writing may have them believe that you are a successful business man."

Actually quite the contrary most know exactly...............................

Successful con man, maybe. With the first victim in the mirror.