ᐅ General contractor requests price increase for the entire house

K a t j a schrieb:

Word of Mouth

What kind of mess is this? O_O

chand1986 schrieb:

What kind of mess is this? O_O

That's how we say it here – completely family-friendly. Different countries, different customs.

K a t j a schrieb:

That’s how we say it here – completely family-friendly. Different countries, different c... uh, customs.

I might have accepted word of mouth ;-).
Here, it’s called word of mouth advertising.

In the end, advertising just has to work.

Bardamu schrieb:

In general, if I buy a house and the contract states a fixed price with the associated services that have to be delivered for that price, then as a buyer I would assume that the materials for the house have already been paid for and are on hand at that point.

I definitely wouldn’t assume that. Building materials cost a lot of money. My general contractor (GC) told me recently that the only reason he can still offer fixed lump-sum prices and stick to them is because he has the liquidity to pay upfront. He already had bricks loaded on the back of his pickup before our foundation slab was even poured, and he asked if we had finalized the color choice and if it was okay because he wanted to order them. The heating system was already stored onsite. But this is definitely not common. He said that before the huge price increases, he used to buy material “just in time”, directly from the building supply store to the construction site. Now he needs a lot more storage space. Not all companies have the storage capacity or the liquidity to pay everything upfront.

MSHausbau schrieb:

...
So the result of the phone call wasn’t really satisfactory. ...
The result is that he will review the numbers again next week and we think we’ll probably settle somewhere between 15,000 and 25,000.

Given your situation, I think you could be quite satisfied with that. You always have to consider what the alternatives would be if you don’t reach an amicable agreement. In my opinion, the damage was done when the contract was signed. You say that yourself. Now you are where you are, and in that situation, agreeing on the amount and an amicable separation is most likely the cheapest option and also the one that causes you the least stress. Don’t underestimate what years of disputes or legal battles can do to your mental health and well-being. It’s a lot of money, but sometimes it’s better to have an end with hardship than an endless hardship without end.

hauskauf1987 schrieb:

I can’t believe it, 25,000 more without disclosure just like that because everything got expensive. Nice save on the margin...

Whether you can believe it or not, the signed contract (at least from what we have seen of it) is drafted to the disadvantage of the homeowner. And it was accepted that way. Paper is patient, and legally you don’t have a particularly strong basis to challenge the GC.

MSHausbau schrieb:

It’s a big GC. Sorry, at first I confused GC with main contractor.

Don’t worry, I’ve been here for years and I still can’t keep them straight either.

It would also be interesting to know what price range you were in before the increase.
It cannot be ruled out that the general contractor did not raise prices as much in 2021 as others, but is now catching up in 2022.

This could also have strategic reasons.

Who knows?

kati1337 schrieb:

He said that until the steep price increases, he used to purchase his materials more "on the fly," directly from the building materials supplier to the construction site. By now, he needs much more storage space. Not all companies can afford the storage space or the liquidity to pay everything upfront.

The fact that he operates this way and can afford it without feeling like the one taking the loss speaks volumes about him as a highly recommended contractor and, accordingly, about your good choice. However, having your own liquidity also involves capital costs (commonly called returns). The general contractor’s business has become more challenging...

kati1337 schrieb:

and in this situation, agreeing on the amount and parting on friendly terms is probably the most cost-effective option,

... but that is the contractor’s business risk and legally and morally none of the client’s concern. That said, there may still be reasons—some self-interested—for the client to appeal to not only their business sense but also their conscience. However: if, as a client in such a situation, I pay a voluntary price increase, this has two aspects. One is an investment to keep the contractor financially able to act—which can turn out to be a sham investment or an unfortunate speculation. The contractor can still go bankrupt during the warranty period, and then, politely put, I am not among those most likely to be adequately compensated. The second aspect left for me is to enjoy a sense of personal goodwill (and to admit that, from a business perspective, this goodwill is a luxury). Because the money paid as a price increase is gone, and it has never increased the value of the completed work—neither for me nor as security for the financing bank. Personally, I would only provide such a private safety net for my contractor if it secured the completion of my house and effectively protected its business value for me. In this case, however, this is only "pseudo-necessary" due to the original poster’s negligence in contract drafting. Readers should learn from this that appropriate milestones in the payment schedule (e.g., the construction status of a "weatherproof shell") or, in a way, retroactive price adjustments should also be considered as possible contract termination points. If the original poster had accounted for this, they could now calmly stick to a WYSIWYG ("what you see is what you get") approach, consider the construction progress achieved as "theirs," and delegate the completion at their discretion without fearing any objection from the general contractor.

---

https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/