Contract Question/Advice for Single Family Residence in Florida

7 years ago

Hello

I made a mistake in not reading thoroughly that Windows/Doors were included as a Fixed Item in the contract (versus as an allowance).

When I compare that Fixed Item cost to quotes from other 3rd party Window vendors (for the same model of windows), I am noticing my GC's numbers are easily 20%-25" higher. When I spoke to the GC about this, he said that is the way it is.

What are my options at this point? The project has not started yet, so I am assuming I can back off completely. We are still in the permitting stage.

He is open to reviewing my quotes. However, he says that if I get the windows and doors installed by an independent company, he will charge me 20% to 25% overhead.

I understand it was my mistake for not realizing that the Windows were setup as a Fixed Item in the quote.

Advice/ideas?

Featured Answer

bry911

7 years ago

First, I am not so sure you can simply get out of the contract. A contract is considered executed when signed without contingency. An easy way to think of this is the contractor is owed his profit once he has set aside time for your job, which he does when you obligate him with the contract.

Next, contractors make money from supervising construction. There is still work to do for the windows, that work and any resulting mistakes are his responsibilities and thus he should get his percentage on those items.

Moreover, let's take the idea of no markup on windows to its logical conclusion. Were you to get bids for everything, doors, windows, bricks, plumbing, carpenters, masons, plumbers, etc. should the builder lose his percentage on those items too? If that is the case then we could completely eliminate all builder profit while getting the benefit of his services. Obviously, that can't happen.

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Comments (6)

PRO
toddinmn
7 years ago
Comply, deny or renegotiate.
Amit Ramani
Original Author
7 years ago
I have paid the down payment (initial deposit), but the signed contract has not been submitted yet. However, the permits have been applied under the GC's name.
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User
7 years ago
All materials get the industry standard contractor markup. That covers him sourcing, ordering, following up, accepting and inspecting delivery, etc. And the knowledge and experience that it takes to do all of that.

You can certainly hire some handyman and order all the materials yourself. But it you get it wrong, and you will, because windows are super tricky and specific to each manufacturer, you’ll be out way way more than a 25% markup. As in the entire order. And we won’t even talk about if your uninsured handy guy ruins things like your whole house because he doesnt know how to flash or install brickmold correctly,
cpartist
7 years ago
The builder is entitled to his percentage on everything. That is how working with a builder is.
Amit Ramani
Original Author
7 years ago
Thank you everyone for the reasonable advice. I understand your point. You are right. I will pay a lot more for windows that are not installed right.

I just want to double check with you knowledgeable people from time to time. You have not disappointed me.