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baumhaus8151 Dec 2016 15:14Hello house building forum,
We are planning to build a turnkey (or “paint-ready”) single-family house soon and have initial meetings scheduled in the next few days with various general contractors (GCs).
We are currently considering whether it makes sense, in principle, to exclude certain trades from the contract—typically flooring and painting—and contract those separately, mainly managing them ourselves.
We expect that this could result in lower prices from the individual craftsmen, especially regarding any special requests, as they would not be bound to the main GC and we could switch to another company if a quote seems overpriced.
On the other hand, I worry that the GC might underestimate the price of these trades during the offer and negotiation phase to discourage us from removing them from the contract.
What are your experiences with this? Is it worthwhile to exclude certain trades if you cannot carry out the work yourself but still rely on (other) craftsmen? As mentioned, the advantage would certainly be not being tied to the GC and thus having more options.
What do you think?
We are planning to build a turnkey (or “paint-ready”) single-family house soon and have initial meetings scheduled in the next few days with various general contractors (GCs).
We are currently considering whether it makes sense, in principle, to exclude certain trades from the contract—typically flooring and painting—and contract those separately, mainly managing them ourselves.
We expect that this could result in lower prices from the individual craftsmen, especially regarding any special requests, as they would not be bound to the main GC and we could switch to another company if a quote seems overpriced.
On the other hand, I worry that the GC might underestimate the price of these trades during the offer and negotiation phase to discourage us from removing them from the contract.
What are your experiences with this? Is it worthwhile to exclude certain trades if you cannot carry out the work yourself but still rely on (other) craftsmen? As mentioned, the advantage would certainly be not being tied to the GC and thus having more options.
What do you think?
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Painkiller1 Dec 2016 15:31There is really no general answer to this question.
Using our example:
We removed some of the floor coverings ourselves because we could install them on our own.
The gross material cost was estimated at 30€/m² (approximately 2.79 USD/sq ft). For 70m² (approximately 753 sq ft), we were reimbursed 4900€, which results in an installation price of 40€/m² (approximately 3.72 USD/sq ft). If I were to contract this separately, I would probably have to pay extra.
Additional requests are billed directly with the respective trade. This means the general contractor doesn’t earn anything from these items. But again, if I can do it myself, there is potential to save money. If I want to contract it separately, it will probably just break even, and at best, I save a few euros.
Another disadvantage is that you have to manage the scheduling yourself to make sure the respective trades are available when needed.
As mentioned, we only trusted ourselves with part of the flooring, which we can install within the required time frame.
Using our example:
We removed some of the floor coverings ourselves because we could install them on our own.
The gross material cost was estimated at 30€/m² (approximately 2.79 USD/sq ft). For 70m² (approximately 753 sq ft), we were reimbursed 4900€, which results in an installation price of 40€/m² (approximately 3.72 USD/sq ft). If I were to contract this separately, I would probably have to pay extra.
Additional requests are billed directly with the respective trade. This means the general contractor doesn’t earn anything from these items. But again, if I can do it myself, there is potential to save money. If I want to contract it separately, it will probably just break even, and at best, I save a few euros.
Another disadvantage is that you have to manage the scheduling yourself to make sure the respective trades are available when needed.
As mentioned, we only trusted ourselves with part of the flooring, which we can install within the required time frame.
Our contractor specified all reductions in scope for the trades before the contract was signed. This way, we knew exactly how much would be credited back to us. Trades could then be excluded or included up until the detailed design phase or the finishing selection appointment.
You could ask about this before signing the contract as well.
Edit: We did the electrical work ourselves, or are currently doing so, because of the installation of a bus system. We also removed the floor coverings since we are doing these ourselves (laminate) or contracting them out independently, as our builder’s selection was too limited and/or too expensive. In all cases, we ended up being cheaper or roughly cost-neutral.
You could ask about this before signing the contract as well.
Edit: We did the electrical work ourselves, or are currently doing so, because of the installation of a bus system. We also removed the floor coverings since we are doing these ourselves (laminate) or contracting them out independently, as our builder’s selection was too limited and/or too expensive. In all cases, we ended up being cheaper or roughly cost-neutral.
As a rule, it is usually not worthwhile to outsource the work, unless the trade exceeds the capabilities of a general contractor (e.g., bus systems) or your requirements are so specialized that the prices the general contractor charges are simply unrealistic (because they need to buy in the expertise).
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baumhaus8151 Dec 2016 21:23Painkiller schrieb:
Additional requests are billed directly by the respective trade specialists. This means the general contractor (GC) does not profit from these items. However, if I can do it myself, there is potential for savings. If I want to outsource it separately, it will probably break even; in the best case, I save a few dollars.
Okay, I understand that the GC doesn’t profit from these special requests if you have the option to bill the trade work directly.
But isn’t it then similar to staying with the GC, since you are still tied to the specific subcontractor for that trade (e.g., electrical installation) and essentially have to pay the price set by the company… rather than a fair market price?
Overall, it sounds to me like removing and outsourcing electrical work or flooring might not save much money unless you can actually do it yourself?
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HilfeHilfe2 Dec 2016 07:15Forget about saving money, especially in regions like Baden-Württemberg where there is virtually full employment. Your general contractor (GC) runs his company based on a stable order situation, coordinates the trades, and usually, the subcontractors already know each other from building the GC’s houses. A good GC rarely, if ever, changes their subcontractors.
If you want to do one trade yourself and mess with the plans, it could ultimately mean that the construction takes longer and costs more.
If you expect to get it done cheaper, a craftsman would have to be extremely eager to get a house project and offer you a super low bid. That’s a myth in a full-employment market.
And then there is the question of liability. When something goes wrong, blame is often shifted around.
Good luck. My personal advice is: don’t do it.
If you want to do one trade yourself and mess with the plans, it could ultimately mean that the construction takes longer and costs more.
If you expect to get it done cheaper, a craftsman would have to be extremely eager to get a house project and offer you a super low bid. That’s a myth in a full-employment market.
And then there is the question of liability. When something goes wrong, blame is often shifted around.
Good luck. My personal advice is: don’t do it.