Question:
> I am having a new home built and our GC has given us allowances for many > items (windows, light fixtures, flooring, etc) . How do most new home > builders/consumers handle allowances? I obviously made a mistake (see > earlier posting: "Wrong window order…advice needed (long)"). My > understanding was that the customer goes out and finds the best deal for > whatever he/she has an allowance for and then has the builder/gc orders it > and buys it. Is this how it is supposed to work? Any other ideas?
We are in the process (well almost done actually) of building a new house. Our builder gave us an allowence for lights and the choice of taking his (cheap) brand of carpet and flooring or taking the allowence and getting what we want. How we had to do the lights was go and purchase them ourself and have them delivered to the house on the specific date that the builder asked for. The same with the carpeting also, we did the buying but the builder said he would contact the carpet people with a date when they could come in and lay it down. — Machelle Simon-Grech |The opinions above are mine | Ford Motor Company/Visteon |and only mine. They have | Milan Plastics – Incoming Quality |nothing to do with that of | The Quest for Stanley has begun anew! Go Wings!
Response:
>Thanks everybody for the input. I guess what I really needed was more >guidance from the builder as to how he liked to handle things and to ask >more questions of him as things came up. >Bart
When we were planning our new house, everyone told us to pick out doors, paint, trim, flooring, appliances, shingles, light fixtures, faucets, etc., way ahead of time so we didn’t have to do it at the last minute. They said that builders often ask for those choices right before they need them, so be prepared with detailed lists. The trouble was, we never could get our builder to tell us ahead of time how much money he had allowed for such things. He would give a vague, general answer, like, "Oh, pretty much whatever you want," or, "Somewhere around mid-range," etc. It really **wasn’t** nickel-and-dime critical in our case, because we had a "cost-plus" contract; but the contract did have a "guaranteed not to exceed" amount that we were trying not to exceed. The **real** problem was caused by the variety of interpretations of the word "custom". We thought our builder was building OUR house, according to unique, custom plans and a rather specific materials/specifications list (all were part of the contract). What we discovered was that he and his subs really intended to build our house with the same materials and methods they used on ALL their houses–even the spec houses. We have found out since then (we’ve been in the house a year) that our builder has precisely that reputation–he’s a really good builder, as long as your house is exactly like everyone else’s. There’s an old saying: Has your builder built 50 houses, or has he built the same house 50 times? C. Brunner
Response:
Say a person picks out items that cost more than the allowance. Does the buyer only pay the additional material cost that is in excess of the allowance? Or is buyer also required to pay the contractor a markup, say 20%, on the additional material cost that exceeds the allowance? What is customary in this situation? The markup is the contractors profit margin. – Hide quoted text — Show quoted text ->There are two types of "allowances". >If you want to do the shopping around, my experience is that >you go out and actually buy the stuff all yourself. You keep >the receipts, and get "credit" back against the allowance >amount at the closing. You then give the items to the builder >for installation/connection. You are responsible to get >these to the builder before they are needed at the job site. >If you later change your mind, you have the receipts, and it >is up to you to handle the return. For example, you buy >three lights for the bath, but it only needed two. Or you >buy a light for the foyer which hangs down too far and the >door hits it. >If you are using the builder’s usual supplier, the allowance is >basically a builder’s "max". The builder gives you, for >example, a flooring maximum of $1000. You go to the builder’s >flooring provider, and pick out some rather expense carpet. >The builder pays the first $1000, and you need to pay the >flooring provider the rest.
Response:
Also schrieb Howard R. Hansen: >Say a person picks out items that cost more than the allowance. Does the buyer >only pay the additional material cost that is in excess of the allowance? Or >is buyer also required to pay the contractor a markup, say 20%, on the >additional material cost that exceeds the allowance? What is customary in >this situation? The markup is the contractors profit margin.
We pay a 15% "administrative charge" on any upcharges. LOL Get this: One change order was adjusting a $1000 allowance. So the change order read: Electrical allowance: $1000 Additional charge for electrical work: $1100 —– Subtotal: $2100 Administrative charge: $ 315 Total: $2415 Less electrical allowance: $1000 Total due: $1415 Cute huh? Yes, they fixed it. :-{) >If you are using the builder’s usual supplier, the allowance is >basically a builder’s "max". The builder gives you, for >example, a flooring maximum of $1000. You go to the builder’s >flooring provider, and pick out some rather expense carpet. >The builder pays the first $1000, and you need to pay the >flooring provider the rest.
Or the supplier invoices the builder, who writes a change order. That’s how my builder handles it. — Catch the cluetrain. http://www.cluetrain.com ALL programs are poems, it’s just that not all programmers are poets. — Jonathan Guthrie in the scary.devil.monastery
Response:
I suspect it depends upon the builder and the contract. In our case, we tended to use the allowance as a "blank check" for goods in that amount. If we wanted to spend more than that, we wrote the check for the additional amount to the vendor directly ourselves. In fact, our builder didn’t know what our cabinets cost until well after they were installed. If the contractor were trying to play games with a markup on the additional material cost, I think the conversation would go something like this: "Just remove all the allowances from the contract. I will take that money and buy the materials myself. Let me know when you want them delivered." However, this type of negotiation needs to be done before the contract is finalized and signed. Also, I had a builder which I knew didn’t play these games with the allowances. He also didn’t play games with the "packages" and "upgrade options." It really annoys me when I hear about contractors who include cheap carpet and charge twice what the difference is worth to "upgrade" the carpet to something reasonable. Also, I found that working under the contractor’s name, I could usually get his pricing. It doesn’t have to be the builder’s employee that does the shopping. If you have the right relationship with the builder, this can be a win/win situation. You get exactly what you want and they don’t have to spend the time and effort buying this stuff. Mike Nickerson – Hide quoted text — Show quoted text – >Say a person picks out items that cost more than the allowance. Does the buyer >only pay the additional material cost that is in excess of the allowance? Or >is buyer also required to pay the contractor a markup, say 20%, on the >additional material cost that exceeds the allowance? What is customary in >this situation? The markup is the contractors profit margin. >There are two types of "allowances". >If you want to do the shopping around, my experience is that >you go out and actually buy the stuff all yourself. You keep >the receipts, and get "credit" back against the allowance >amount at the closing. You then give the items to the builder >for installation/connection. You are responsible to get >these to the builder before they are needed at the job site. >If you later change your mind, you have the receipts, and it >is up to you to handle the return. For example, you buy >three lights for the bath, but it only needed two. Or you >buy a light for the foyer which hangs down too far and the >door hits it. >If you are using the builder’s usual supplier, the allowance is >basically a builder’s "max". The builder gives you, for >example, a flooring maximum of $1000. You go to the builder’s >flooring provider, and pick out some rather expense carpet. >The builder pays the first $1000, and you need to pay the >flooring provider the rest.
Response:
Thanks everybody for the input. I guess what I really needed was more guidance from the builder as to how he liked to handle things and to ask more questions of him as things came up. Bart – Hide quoted text — Show quoted text – > Organization: University of Virginia > Newsgroups: misc.consumers.house,alt.home.repair > I am having a new home built and our GC has given us allowances for many > items (windows, light fixtures, flooring, etc) . How do most new home > builders/consumers handle allowances? I obviously made a mistake (see > earlier posting: "Wrong window order…advice needed (long)"). My > understanding was that the customer goes out and finds the best deal for > whatever he/she has an allowance for and then has the builder/gc orders it > and buys it. Is this how it is supposed to work? Any other ideas? > — > TIA > Bart
Response:
Amen! Added to bottom…..it got kind of long but……:] – Hide quoted text — Show quoted text – > Also schrieb Bart Nathan: >I am having a new home built and our GC has given us allowances for many >items (windows, light fixtures, flooring, etc) . How do most new home >builders/consumers handle allowances? I obviously made a mistake (see >earlier posting: "Wrong window order…advice needed (long)"). My >understanding was that the customer goes out and finds the best deal for >whatever he/she has an allowance for and then has the builder/gc orders it >and buys it. Is this how it is supposed to work? Any other ideas? > Well, that’s a little different story. You didn’t mention the first > time that it was an "allowance." > The way it worked with my builder is that he had a list of the vendors > that he worked with (all reputable businesses; I checked with local > people, other homebuilders and the various agencies involved.) > With plumbing fixtures, for example, we had $x allowance > and a "standard" package of stuff. We went through room by room and > decided whether we wanted the standard and if we didn’t, what kind of > upgrade. The rep then went and tallied the upcharge and it ended up as > a change order. > With lighting, we had an allowance but no "standard" package. We just > started picking stuff; chandeliers, ceiling fans, etc., and either > stopped when we hit the allowance, or went over and knew that we owed > money. > Same deal with cabinetry and sinks and such for kitchens and baths. The > cabinet guy had a copy of the print, worked out some designs, we added > stuff and picked out finishes, etc. > "Misc. electrical" covered switches, outlets, recessed lights, and that > kind of stuff. Again, there was a standard charge per outlet, per > switch. The electrician gave me a standard layout for a fixed price. > Anything over, was an upcharge. > Floor coverings — tile, carpet, hardwoods. There we had a choice. > Basically the floor place said "Anything in this rack is standard. > Anything over there is custom." We went through and picked the tiles > and whatnot that we wanted, and he figured the charges. > So far, no surprises. > With our appliances, we elected to take the allowance and bag it, since > the builder was offering the stellar GE builder grade. :-{) We instead > went to the Maytag place and bought a kitchen-full of Jenn-Air and > Maytag appliances, and asked the builder to just credit us with the > appliance allowance. > The difference here is that WE are responsible for the details of the > appliances. *I* have to ensure that the cabinetmaker gets the dimensions > for the ovens, the electrician wires the correct stuff for the > dishwasher, the plumber puts in the line for the refrigerator’s > icemaker, etc. I made a checklist of stuff to be done. Either I > instructed the subcontractor to do it, or I told the builder what I was > doing and what requirements I had for whatever system I was talking > about. But if something isn’t right on the 27th when the appliances get > delivered, it’s *my* butt and not the builders. > — > Catch the cluetrain. http://www.cluetrain.com > ALL programs are poems, it’s just that not all programmers are poets. > — Jonathan Guthrie in the scary.devil.monastery
This sounds almost exactly what we did when we built. For any new builders/owners reading this thread they should first sit down with the builder and COMMUNICATE! Who does what! Write it down. Some deals are within the bid and with a little shopping you can come very close without going over. Others will come to you as you go. ALWAYS PLAN ON "EXTRAS". Put the money in your loan if the bank will allow it. (ours did). Our builder was a "town type" so I took care of septic, propane, and brought the water and electricity to the outside. The wife put lawn chairs under the tree for lunch and a cooler of drinks. It was a hot summer. We picked out stuff and gave him all the books and specs. He did the ordering. I got some ideas from the subs as they worked. The carpenters had some great tricks. Even the building inspector contributed. I don’t think the builder made a great killing but he didn’t kill us either. So. While your fortune is slipping away, nothing is on time, the bank is taking your money in intrest, your spouse doesn’t want to move twice, you still have to sell a house, and your life is flashing before your eyes….get lots of Zantac, and COMMUNICATE frequently. And stay out of the way at the same time. Set a reasonable completion date and plan nothing else in your life until two months after that time. Right after you reconcile with the tax collector you will begin to love it. Vince (born to shovel) — Remove (nospam) after 1197. It’s a SPAM blocker.
Response:
>I am having a new home built and our GC has given us allowances for many >items (windows, light fixtures, flooring, etc) . How do most new home >builders/consumers handle allowances?
I know you’ve gotten a few responses already….. Charges against Allowances are often defined in the contract as "cost plus x%" . Like maybe 10%. The customer tells the builder what they want and the builder buys it and charges the markup. The markup pays for coordination services. It then becomes the builder’s responsibility to check the order, get the stuff there on time, to correct errors, etc. Often the builder’s price plus the 10% is no more or not much more than the customer would pay at retail anyway. On our house, we bought all the lighting fixtures directly. The builder spent none of the allowance and we received full credit for it. However, we took on all the responsibility for chasing after out of stock, missing items, broken items, wrong item delivered, receiving, verifying and paying for the deliveries, etc. There was a lot of running around and many phone calls. Do not begrudge the builder the 10%, it can be worth it. In our case, a relative is a big electrical contractor and we got GREAT prices buying through them. (They were not, though, the electrician on our house.) The average homeowner should just tell their builder what they want, and let the builder give them a price. They are entitled to see the receipts to verify actual cost. But it aint worth the time and trouble to be too penny ante about it just ’cause you saw one item out of 10 on sale for $2 cheaper. just MHO, -v.
Response:
My wife and I were rather particular about certain parts of our house and handled them pretty much like you described on the windows. Hwever, there are some things you can do to protect yourself. Our builder provided allowances on flooring, lighting fixtures and cabinets. All other fixtures (plumbing and kitchen appliances) we had already agreed upon during the bid process. Our custom builder had recommended suppliers for each of these but no "packages" or "options." We ended up going with their recommendation on lighting fixtures and flooring and our own supplier for cabinets. Our approach on all these was pretty similar: 1. Look around and make sure we were getting what we wanted. During this phase, we were checking for quality levels and features. We were also choosing suppliers during this time. The lighting fixtures we pretty much chose the builder’s recommended supplier and then just chose the fixtures. The flooring we were very fussy about getting good quality flooring. We went with the builder’s supplier and spent most of our time working on the particular quality level and color. 2. With the cabinets we were looking for a very specific look. We found the cabinet makers that could do it and had competitive bidding from each of them. In the end, it was a combination of customer service and price that led to our cabinet choice. The cabinetmakers we chose actually came to the house and measured for the cabinets on the floor. Also, they had excellent suggestions on cabinet layout and features to add. 3. Once we had the vendors chosen and knew exactly what we wanted, we got it documented and clarified. We also negotiated for better pricing at this point. We tried to make it very clear exactly what we had ordered and for how much money. I think this is the step that could have helped you out with the windows. If you are doing all that work, I think you also need to make sure that it is clearly written down and understood by all parties. 4. At this point, we stepped out of the picture. We told the vendor to call the builder to arrange delivery schedule and final measurement and installation details. We told the builder to coordinate with the vendor and gave the builder a copy of what we had ordered for their information. Once we had decided what to order and how much it should cost, we didn’t think we needed to deal with the details of schedules and exact measurements, etc. Those details are between the other parties. This worked well for us with all three vendors. We got what we wanted and thought we paid a fair price. Mike Nickerson – Hide quoted text — Show quoted text – >I am having a new home built and our GC has given us allowances for many >items (windows, light fixtures, flooring, etc) . How do most new home >builders/consumers handle allowances? I obviously made a mistake (see >earlier posting: "Wrong window order…advice needed (long)"). My >understanding was that the customer goes out and finds the best deal for >whatever he/she has an allowance for and then has the builder/gc orders it >and buys it. Is this how it is supposed to work? Any other ideas? >– >TIA >Bart
Response:
Also schrieb Bart Nathan: >I am having a new home built and our GC has given us allowances for many >items (windows, light fixtures, flooring, etc) . How do most new home >builders/consumers handle allowances? I obviously made a mistake (see >earlier posting: "Wrong window order…advice needed (long)"). My >understanding was that the customer goes out and finds the best deal for >whatever he/she has an allowance for and then has the builder/gc orders it >and buys it. Is this how it is supposed to work? Any other ideas?
Well, that’s a little different story. You didn’t mention the first time that it was an "allowance." The way it worked with my builder is that he had a list of the vendors that he worked with (all reputable businesses; I checked with local people, other homebuilders and the various agencies involved.) With plumbing fixtures, for example, we had $x allowance and a "standard" package of stuff. We went through room by room and decided whether we wanted the standard and if we didn’t, what kind of upgrade. The rep then went and tallied the upcharge and it ended up as a change order. With lighting, we had an allowance but no "standard" package. We just started picking stuff; chandeliers, ceiling fans, etc., and either stopped when we hit the allowance, or went over and knew that we owed money. Same deal with cabinetry and sinks and such for kitchens and baths. The cabinet guy had a copy of the print, worked out some designs, we added stuff and picked out finishes, etc. "Misc. electrical" covered switches, outlets, recessed lights, and that kind of stuff. Again, there was a standard charge per outlet, per switch. The electrician gave me a standard layout for a fixed price. Anything over, was an upcharge. Floor coverings — tile, carpet, hardwoods. There we had a choice. Basically the floor place said "Anything in this rack is standard. Anything over there is custom." We went through and picked the tiles and whatnot that we wanted, and he figured the charges. So far, no surprises. With our appliances, we elected to take the allowance and bag it, since the builder was offering the stellar GE builder grade. :-{) We instead went to the Maytag place and bought a kitchen-full of Jenn-Air and Maytag appliances, and asked the builder to just credit us with the appliance allowance. The difference here is that WE are responsible for the details of the appliances. *I* have to ensure that the cabinetmaker gets the dimensions for the ovens, the electrician wires the correct stuff for the dishwasher, the plumber puts in the line for the refrigerator’s icemaker, etc. I made a checklist of stuff to be done. Either I instructed the subcontractor to do it, or I told the builder what I was doing and what requirements I had for whatever system I was talking about. But if something isn’t right on the 27th when the appliances get delivered, it’s *my* butt and not the builders. — Catch the cluetrain. http://www.cluetrain.com ALL programs are poems, it’s just that not all programmers are poets. — Jonathan Guthrie in the scary.devil.monastery
Response:
The reality is options like outlined by "quantum" are pretty much the common way to do things. One caveat, if the builder has strong opinions about NOT using something, please listen to them! Certain items are much harder to instal and/or much more of a long term headache. If the builder feels their back is up against the wall it will not lead to a good project. When you , as a buyer, are showing the sales reps. the "plans", and talk about costs & delivery you are committing to things AS DRAWN. If you later make changes, it is imperative that all the other committments that relate to the changes are also updated. This usually doesn’t happen. Sometimes nice people make mistakes. It happens. I remember once a nice couple with three kids wanted to turn a storage close in an under construction home into a tiny ‘wash-up’ lavatory. After about a dozen attempts mom finally decided that any lav would have been too small. The couple had four custom/semi-custom bathroom base cabinets that they tried.I felt sorry for them and actaully "shopped around" those cabinets to other contractors to help the couple out. I still get kidded about being a "cabinet salesman", but this was a really nice couple to work for… If you are picking out things beyond "color, style, finish" choices you are starting to eat in to the GC role. A good GC will tell you want is appropriate for a given home, even though "the buyer is always right" the GC should be hired for their ability to help the home buyer evaluate from many choices. As long as it doesn’t take time away from me supervising/working on site, I like to go along to showrooms with clients. They can learn why things cost more or less, what will install best, and I can learn about different tastes and trends in styles… – Hide quoted text — Show quoted text – > Also schrieb Bart Nathan: >I am having a new home built and our GC has given us allowances for many >items (windows, light fixtures, flooring, etc) . How do most new home >builders/consumers handle allowances? I obviously made a mistake (see >earlier posting: "Wrong window order…advice needed (long)"). My >understanding was that the customer goes out and finds the best deal for >whatever he/she has an allowance for and then has the builder/gc orders it >and buys it. Is this how it is supposed to work? Any other ideas? > Well, that’s a little different story. You didn’t mention the first > time that it was an "allowance." > The way it worked with my builder is that he had a list of the vendors > that he worked with (all reputable businesses; I checked with local > people, other homebuilders and the various agencies involved.) > With plumbing fixtures, for example, we had $x allowance > and a "standard" package of stuff. We went through room by room and > decided whether we wanted the standard and if we didn’t, what kind of > upgrade. The rep then went and tallied the upcharge and it ended up as > a change order. > With lighting, we had an allowance but no "standard" package. We just > started picking stuff; chandeliers, ceiling fans, etc., and either > stopped when we hit the allowance, or went over and knew that we owed > money. > Same deal with cabinetry and sinks and such for kitchens and baths. The > cabinet guy had a copy of the print, worked out some designs, we added > stuff and picked out finishes, etc. > "Misc. electrical" covered switches, outlets, recessed lights, and that > kind of stuff. Again, there was a standard charge per outlet, per > switch. The electrician gave me a standard layout for a fixed price. > Anything over, was an upcharge. > Floor coverings — tile, carpet, hardwoods. There we had a choice. > Basically the floor place said "Anything in this rack is standard. > Anything over there is custom." We went through and picked the tiles > and whatnot that we wanted, and he figured the charges. > So far, no surprises. > With our appliances, we elected to take the allowance and bag it, since > the builder was offering the stellar GE builder grade. :-{) We instead > went to the Maytag place and bought a kitchen-full of Jenn-Air and > Maytag appliances, and asked the builder to just credit us with the > appliance allowance. > The difference here is that WE are responsible for the details of the > appliances. *I* have to ensure that the cabinetmaker gets the dimensions > for the ovens, the electrician wires the correct stuff for the > dishwasher, the plumber puts in the line for the refrigerator’s > icemaker, etc. I made a checklist of stuff to be done. Either I > instructed the subcontractor to do it, or I told the builder what I was > doing and what requirements I had for whatever system I was talking > about. But if something isn’t right on the 27th when the appliances get > delivered, it’s *my* butt and not the builders. > — > Catch the cluetrain. http://www.cluetrain.com > ALL programs are poems, it’s just that not all programmers are poets. > — Jonathan Guthrie in the scary.devil.monastery
Before you buy.
Response:
There are two types of "allowances". If you want to do the shopping around, my experience is that you go out and actually buy the stuff all yourself. You keep the receipts, and get "credit" back against the allowance amount at the closing. You then give the items to the builder for installation/connection. You are responsible to get these to the builder before they are needed at the job site. If you later change your mind, you have the receipts, and it is up to you to handle the return. For example, you buy three lights for the bath, but it only needed two. Or you buy a light for the foyer which hangs down too far and the door hits it. If you are using the builder’s usual supplier, the allowance is basically a builder’s "max". The builder gives you, for example, a flooring maximum of $1000. You go to the builder’s flooring provider, and pick out some rather expense carpet. The builder pays the first $1000, and you need to pay the flooring provider the rest. – Hide quoted text — Show quoted text – > I am having a new home built and our GC has given us allowances for many > items (windows, light fixtures, flooring, etc) . How do most new home > builders/consumers handle allowances? I obviously made a mistake (see > earlier posting: "Wrong window order…advice needed (long)"). My > understanding was that the customer goes out and finds the best deal for > whatever he/she has an allowance for and then has the builder/gc orders it > and buys it. Is this how it is supposed to work? Any other ideas? > — > TIA > Bart
Response:
I am having a new home built and our GC has given us allowances for many items (windows, light fixtures, flooring, etc) . How do most new home builders/consumers handle allowances? I obviously made a mistake (see earlier posting: "Wrong window order…advice needed (long)"). My understanding was that the customer goes out and finds the best deal for whatever he/she has an allowance for and then has the builder/gc orders it and buys it. Is this how it is supposed to work? Any other ideas? — TIA Bart
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