Custom Residential Architects Network

 View Only
  • 1.  Architect's Own Home/Contractor Pricing

    Posted 11-20-2011 01:51 PM

    We're building our own home and expect wholesale pricing from the contractor, because the end product showcases both our work. Our contractor proposes marking-up his supplier's already marked-up prices, 'to receive deliveries, chase down missing parts etc.' Fair enough, or is it? Appreciate some feedback and thanks.


    -------------------------------------------
    Heather Johnston AIA
    Principal
    Heather Johnston Architect
    La Jolla CA
    -------------------------------------------
    AIA Business Academy: A high-impact, four-part intensive program starting June 9. Earn 22.75 LUs. Click here to learn more.


  • 2.  RE:Architect's Own Home/Contractor Pricing

    Posted 11-20-2011 03:51 PM


    -------------------------------------------
    Michael John Smith FAIA
    Owner
    MJS Lighting Consultants
    Houston TX
    -------------------------------------------
    Heather, 

    In my experience, whenever I have purchased items for my own home, I pay the manufacturer directly.  I have relationships with folks in some factories.  In that case I can deal with them.  In some other cases I deal with the manufacturer's local representative.  Most often they require a check for the full amount with a P. O. on my company letterhead.  The items must be delivered to a secure place, usually my office.  Large items can be delivered to the contractor or the jobsite if it can be secured.

    I agree with the contractor.  If he is responsible for ordering and receiving the product, he deserves his markup for the inevitable hassles involved in coordinating ship dates, delivery to the proper address, and delays.  If monies must go through his account, he also deserves his markup for the time between writing his check and receiving yours in payment to him.





    AIA Business Academy: A high-impact, four-part intensive program starting June 9. Earn 22.75 LUs. Click here to learn more.


  • 3.  RE:Architect's Own Home/Contractor Pricing

    Posted 11-21-2011 09:35 AM
    Heather:
    I agree with Michael, both in thoery and in practice. the contractor is entitled to hiss mark up for all of the reasons of tracking & coordiantion, unless like Michael you will order & pay direct, also shouldering all responsibility.
    In addition, i would caution you on another issue, more of perception than reality. will potential client's question your impariality in reccommending a contractor who you have showcased. Best to keep as much of an arm's length relationship relationship a spossible.

    -------------------------------------------
    Burton L. Roslyn, FAIA
    President
    Roslyn Consultants, LLC
    Roslyn Heights, New York
    -------------------------------------------






    AIA Business Academy: A high-impact, four-part intensive program starting June 9. Earn 22.75 LUs. Click here to learn more.


  • 4.  RE:Architect's Own Home/Contractor Pricing

    Posted 11-21-2011 02:15 PM
    To me, the fee paid to a "partner" should be based on the differential between the benefit to you and the benefit to the contractor. He'll get visibility/marketing out of the deal. You'll get the same, but the fees you stand to make from projects the two of you share that result from this visibility is probably much lower than his. However, you also get to use the space and profit from the resale of the house and he doesn't. So I think monetizing and comparing the relative benefits is rather difficult.

    -------------------------------------------
    Sean Catherall, AIA
    Herriman UT
    -------------------------------------------



    AIA Business Academy: A high-impact, four-part intensive program starting June 9. Earn 22.75 LUs. Click here to learn more.


  • 5.  RE:Architect's Own Home/Contractor Pricing

    Posted 11-21-2011 11:22 PM


    -------------------------------------------
    Jerrold Brim AIA
    Manager
    Brim Consulting LLC Architects
    Buffalo Grove IL
    -------------------------------------------
    I would agree with both responses recieved from Michael Smit and Burton Roslyn
    and to a lesser degree with Sean Catherall; all for differant reasons.

    First: Consider the big picture. You are designing and developing a project of your own making for both personal and marketing use. Any stigma attached to your efforts of this product percieved to be impacted by outside influences cannot be a good thing for future marketing or for future clients that do not share your enthsiasm for your contractor..The idea of sharing costs because youwii both benifit from showcasing the home, in my opinion, will never smoothly occur in the real world for a book full of reasons.In addition, if you even think you can negotiate a fair evaluation of benefits from this concept, your dream will never reappear since it has already passed.

    Second: As you well know, every project incuding your home, wii have a number of general conditions which must be covered by the general contractor. For all other items, not general conditions, will require all sorts of administrative, co-ordination, supervisory, storage and asundry costs which must be paid for. Make the best good deal arragement( cost plus small override) to pay for these directly and do not expect the contractor to absorb these from an over ride of material purchases. Any other approach can almost guarantee a hissing match.

    Third: There are no free lunches in this industry. The last person you want to have working on your project is a contractor who is making no overhead let alone no fee.
    Your turn will come when and if he brings clients to your attention even if that client is him. How long will you provide free services on that project.Now re-evaluate my comments about determining each others value.

    Fourth:Make a best deal arrangement( professional consideration)
     on the ordering of materials based on the fact that you will pay directly for deposits, transportation, storage, tax, etc., etc.,etc.
    Perhaps this is where his overhead can include a smaller amount of administrative time only. Be aware there is plenty of exposure here

    Fifth:Michael Smith suggests you may be able to by reasonable appliance, furniture,cabinet and accessorie items directly at cost or less from manufacturers and local distributors and have them delivered (where?-depends on construction progress)and stored. Determine who pays for storage, transportationand when items are missing, broken, improperly filled, wrong finish etc. A lot to think about.

    Sixth: When is the job finished and what leverage do you have?
    .
    If an offer looks too good...it probably is!

    AIA Business Academy: A high-impact, four-part intensive program starting June 9. Earn 22.75 LUs. Click here to learn more.