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Piotr198117 Oct 2019 20:44Hey,
after receiving great help here in the forum, we are gradually making progress.
The first meetings with different architects have taken place, and as expected, they were all completely different.
I would like to share these experiences with you and ask for your insights.
One of the architects recommended working with a local construction company to build a turnkey house or at least to ensure weather-tightness. This company is apparently well-known and frequently collaborates with the architect. The other architect tends to tender each trade individually and has a construction budget cap set by us.
I have mixed feelings about using a general contractor (GC). On one hand, there is a lack of cost transparency, but on the other hand, we would have a single point of contact.
I wonder if building a house by tendering individual trades might be more sensible, transparent, and possibly more cost-effective than going through a GC. Or would you have the shell construction completed by a GC and then tender the rest? Especially since we have certified electricians, plumbers, and others in our close circle of friends and family who could assist us.
I hope I was able to explain this reasonably well.
Now I am asking those who have had experience with these topics multiple times. Looking forward to your feedback.
Thanks to all
after receiving great help here in the forum, we are gradually making progress.
The first meetings with different architects have taken place, and as expected, they were all completely different.
I would like to share these experiences with you and ask for your insights.
One of the architects recommended working with a local construction company to build a turnkey house or at least to ensure weather-tightness. This company is apparently well-known and frequently collaborates with the architect. The other architect tends to tender each trade individually and has a construction budget cap set by us.
I have mixed feelings about using a general contractor (GC). On one hand, there is a lack of cost transparency, but on the other hand, we would have a single point of contact.
I wonder if building a house by tendering individual trades might be more sensible, transparent, and possibly more cost-effective than going through a GC. Or would you have the shell construction completed by a GC and then tender the rest? Especially since we have certified electricians, plumbers, and others in our close circle of friends and family who could assist us.
I hope I was able to explain this reasonably well.
Now I am asking those who have had experience with these topics multiple times. Looking forward to your feedback.
Thanks to all
N
nordanney17 Oct 2019 20:59You asked a good question, but there isn’t a definite answer.
Each approach has its pros and cons:
General contractor (GC): Allows for a transparent all-inclusive price with a reasonable scope of work. However, it is usually somewhat more expensive than contracting individual trades for the same level of work. During construction, flexibility may be limited, but fixed completion dates can be established. There is only one point of contact for all trades and throughout the warranty period, and so on.
Individual trades: Prices for all trades are fully transparent. This is probably the slightly more expensive option since additional work often comes up during construction. This usually results in a higher-quality house than with a GC—you, as the builder, tend to be blamed for this. Although you have more flexibility managing many trades, you also have to coordinate them all and deal with many points of contact. Construction might also take significantly longer. And so on.
How many trades do you need for the shell construction? Structural contractor, carpenter/roofer. This approach—first having the shell built and then contracting the subsequent trades—is essentially the individual trades method. If you actually have many friends who want to work on the building site for weeks in their free time, are always available, don’t get sick or cancel, and don’t cause difficulties with the warranty (if there even officially is one), then this can be a cost-effective option.
As you can see, there are many pros and cons, and each way of building has to fit the project, the budget, and your preferences and possibilities.
Each approach has its pros and cons:
General contractor (GC): Allows for a transparent all-inclusive price with a reasonable scope of work. However, it is usually somewhat more expensive than contracting individual trades for the same level of work. During construction, flexibility may be limited, but fixed completion dates can be established. There is only one point of contact for all trades and throughout the warranty period, and so on.
Individual trades: Prices for all trades are fully transparent. This is probably the slightly more expensive option since additional work often comes up during construction. This usually results in a higher-quality house than with a GC—you, as the builder, tend to be blamed for this. Although you have more flexibility managing many trades, you also have to coordinate them all and deal with many points of contact. Construction might also take significantly longer. And so on.
How many trades do you need for the shell construction? Structural contractor, carpenter/roofer. This approach—first having the shell built and then contracting the subsequent trades—is essentially the individual trades method. If you actually have many friends who want to work on the building site for weeks in their free time, are always available, don’t get sick or cancel, and don’t cause difficulties with the warranty (if there even officially is one), then this can be a cost-effective option.
As you can see, there are many pros and cons, and each way of building has to fit the project, the budget, and your preferences and possibilities.
P
Piotr198117 Oct 2019 21:05nordanney schrieb:
You asked a good question, but unfortunately there is no concrete answer.
All approaches have their advantages and disadvantages:
General Contractor (GC): Provides a transparent all-in price with a reasonable scope of services. However, it is generally somewhat more expensive than hiring individual trades separately for the same scope of work. During construction, there may be limited flexibility, but fixed completion dates can be set. Only one point of contact for all trades and within the warranty period. Etc.
Individual trades: Fully transparent pricing for each trade. However, this is probably the slightly more expensive option because additional work often arises during construction. So, likely a higher-quality house than with a GC—though the client is usually blamed for that. You have more flexibility with many contractors but also have to coordinate all of them and manage multiple points of contact. Construction might take significantly longer. Etc.
How many trades do you need for the shell construction? Shell builder, carpenter/roofer. This approach—building the shell first and then awarding subsequent trades—actually corresponds to hiring individual trades. If you really have many friends who want to work on the site in their free time for weeks, always have time, never get sick or stand you up, and then also manage the warranty (if an official one even exists), this can of course be a cost-effective option.
You see, there are many pros and cons, and every way of building must fit the project, the budget, and your wishes/possibilities.Perfectly described!
Of course, the GC will award contracts in a way that maximizes their profit, which for me doesn’t create transparency—but yes, you’re right that with a GC there is only one point of contact, etc.
Sure, you can’t always rely on friends & co., and if you’re unlucky, you might wait months for the work to be done.
Would the following scenario be feasible:
We receive a detailed scope of work from the architect, including everything, and then we, for example, request bids from about 5 construction companies for the shell construction including the roof? Does that make sense?
That way, in theory, I would still have the option to compare prices and negotiate afterwards (if at all possible).
Have you built already? What are your experiences?
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nordanney17 Oct 2019 21:23Piotr1981 schrieb:
We are receiving a detailed scope of work from the architect with every little detailThat doesn’t really exist with architects. You can commission them to prepare a tender document, but then it only makes sense for all trades involved. What you are describing is nothing more than awarding contracts to individual trades. Just because you collect bids doesn’t mean you have to immediately award all trades at once.Piotr1981 schrieb:
The general contractor will naturally award contracts in a way that maximizes their profit, which in turn doesn’t provide transparency for meThat’s not quite correct. The general contractor is basically a craftsman who builds a house. If you get a quote from a structural builder, that’s not necessarily transparent either. Or what exactly do you mean by transparency? Every contractor gives you a price for a defined scope of work. You could also contact five general contractors — then you have transparency of general contractor pricing.Piotr1981 schrieb:
Have you built before? What are your experiences?Yes, I have bought, renovated, and also built completely from scratch. In that case, however, the architect was my former father-in-law. We awarded the tenders separately through external contractors. Everything else was done by ourselves — construction management, supervision, awarding contracts, negotiations, changes, and so on. I have also been working in the real estate sector for over 20 years — primarily in financing commercial properties starting at €10 million (about $11 million), but personally I’m also involved with real estate.
Piotr1981 schrieb:
One of the architects recommended that we work with a local construction company for a turnkey build or at least to ensure weatherproofing. It is apparently a well-known company that the architect frequently collaborates with. That sounds like a solid recommendation to me. Managing contracts individually usually isn’t the best approach for first-time home builders, even in a normal market situation, especially since the balance between potential savings and conflicts is often misjudged.
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https://www.linkedin.com/company/bauen-jetzt/
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Piotr198117 Oct 2019 22:44nordanney schrieb:
An architect does not provide something like that. You can commission them to prepare the tender documentation, but then it only makes sense for all trades. What you are describing is nothing more than awarding individual trades separately. Just because you request quotes doesn’t mean you have to award all the trades immediately.
That’s exactly the question. Would it possibly be cheaper if I contract the trades individually? As you can see, I don’t have much experience yet but I’m trying to find out what the possible “right” way is.
That is not quite correct. The general contractor (GC) is essentially a tradesperson who builds a house. If you get a quote from a structural builder only, it is not transparent either. Or what do you mean by transparency? Every tradesperson gives you a price for a predefined scope of work. You can also contact 5 GCs, then you have transparency in GC pricing.
By transparency, I mean I would like to keep the option open to negotiate with the GC and not just accept the price the GC offers simply because it comes from my architect.
That is why I asked whether I can request quotes from 5 construction companies with a scope of services description or plans from the architect. The one with the best offer / price-performance ratio would then be awarded the contract.
Yes, I have already bought, renovated, and also built completely. However, in that case, the architect was my former father-in-law. We awarded the tenders separately to external parties. Everything else was then done by ourselves – construction management, supervision, awarding contracts, negotiations, changes, etc. I have also been working in the real estate industry for over 20 years – mainly in commercial real estate financing starting at €10 million (approx. $11 million), but I am also personally involved with real estate. Similar topics