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Builder miscalcated and now wants to add $5000

21,406 Views | 85 Replies | Last: 4 yr ago by dubi
AggieDruggist89
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And we already have a signed contract and I'm in a middle of the mortgage process. We expect to close in 2 months.

Builder made an error on how much stone was required for the front of the house. When we made the changes to side load garage and 2 to 3 car, they added $10,000 which I agreed to.

Am I obligated to pay the extra $4,600? See email below.
AggieDruggist89
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Here's the email

Quote:

I got an email from our person that does purchase orders for each home. When we originally did the sketch and pricing for the stone on the front, we had the 2 car front loading garage. After we changed it to a 3 car side load, the amount of stone needed to complete the extra space has increased due to the side wall at the right of the porch going from 10 feet to 20 feet and the front is now 2 windows instead of a garage door and it is also wider.


To keep the full front view in all stone, the price increases by $4,600.


Do you want to keep the street appearance the same or do we want to look at reconfiguring where the stone would be placed at a lesser cost?


I am working today and can talk about it further or I can meet you at the homesite and look at it in more detail.


I apologize that we did not catch this sooner.


Please let me know how we want to proceed.


Thanks,
aggiepaintrain
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AG
what does the contract say about errors
JP76
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What does the contract say about change orders ?

Is this a fixed cost build or a cost plus ?

AggieDruggist89
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Doesn't say anything about error. Just says what's added on the design center sheet is binding. Well the design center sheet doesn't include the extra $4,600.

Bob_Ag
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Flip the script. Imagine you screwed up and forgot to put something on the design or some structural modification. You think they would be just hunky dorrie about it? No, they are gonna make you pay and you should do the same. If they executed the contract and there is no provision, they have no recourse. $4600 is nothing to their bottom line.
AggieDruggist89
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Bob_Ag said:

Flip the script. Imagine you screwed up and forgot to put something on the design or some structural modification. You think they would be just hunky dorrie about it? No, they are gonna make you pay and you should do the same. If they executed the contract and there is no provision, they have no recourse. $4600 is nothing to their bottom line.


You're exactly right. Thank you.
HouAggie
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Sounds like an honest mistake. I'd either reconfigure the design or pay the extra $4,600.
ratfacemcdougal
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Could be a number of if's and's and but's and not having the exact full story. You could offer to split the difference.
Diggity
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Builder contracts tend to be pretty one sided. Just the nature of things in Texas.
TombstoneTex
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HouAggie said:

Sounds like an honest mistake. I'd either reconfigure the design or pay the extra $4,600.
HA!!
AggieDruggist89
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This is a 2,050 sqft house with a full unfinished basement and it's $420,000 excluding the lot.

The entire frame was a pre-fab that was delivered and set up. They nickle and dimed me for everything. It's definitely not a custom home rather pretty ugly and I couldn't even upgrade the windows

I bought the house for the lot.

We signed the contract in February and they broke ground on the memorial day. The biggest rate limiting step was the interior person who only worked mon-Friday 9 to 4 who was booked for 2 months.

Honest mistake on their part maybe. But then again, they did surcharge me for the extra garage. 10 ft of extra stones for $4900? I could pay it. But I'm not sure I want to nor am I legally bound to.
AggieDruggist89
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ratfacemcdougal said:

Could be a number of if's and's and but's and not having the exact full story. You could offer to split the difference.


The full story is in the email I quoted.
AggieDruggist89
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Diggity said:

Builder contracts tend to be pretty one sided. Just the nature of things in Texas.


This is in Southwest Virginia
Diggity
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Well then I got nothing for you
ratfacemcdougal
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To make the change, the builder said it would be 10k, you said ok, Did you sign a change order at that point. Then the builder came back and said it would be 4600 more because of a mis-calculation on his part. Sounds like you should not have to pay anymore. If you have the signed changed order, you may be able to fight it and the builder will drag things out....or say "I know mistakes happen, it is not my fault, however, I will spit the difference with you."
AggieDruggist89
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ratfacemcdougal said:

To make the change, the builder said it would be 10k, you said ok, Did you sign a change order at that point. Then the builder came back and said it would be 4600 more because of a mis-calculation on his part. Sounds like you should not have to pay anymore. If you have the signed changed order, you may be able to fight it and the builder will drag things out....or say "I know mistakes happen, it is not my fault, however, I will spit the difference with you."


Yes I have a signed change order. And yes exactly as you described.
TombstoneTex
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AggieDruggist89 said:

ratfacemcdougal said:

To make the change, the builder said it would be 10k, you said ok, Did you sign a change order at that point. Then the builder came back and said it would be 4600 more because of a mis-calculation on his part. Sounds like you should not have to pay anymore. If you have the signed changed order, you may be able to fight it and the builder will drag things out....or say "I know mistakes happen, it is not my fault, however, I will spit the difference with you."


Yes I have a signed change order. And yes exactly as you described.


I would think they have to honor the contact. If they want to play hardball I wonder if the builder can say "OK, we are in breach of contract you can walk away with no penalty and we refund all payments or you pay the extra for the stone".
AggieDruggist89
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I would gladly walk away. As long as they pay back the deposit. I'm in no hurry. They can take all the time they want. I can buy somewhere else.
CaptnCarl
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If this is your dream home, I'd probably let it slide. I usually offer to split change orders with contractors, because it's sometimes not worth getting sideways. Especially on the early stages.

If you have already signed a change order, and they have been nickel and diming you, I'd get serious with them. But before that, it's often worth studying the contract. If you think the contract is on your side on this, don't give them a dime.

Sounds like you should stand firm in this instance, or ask a lot of questions.
Build It
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Split it with them and move on. Do you really want to be sideways with the builder? It probably will not work out in your favor in the long run. The gross profit on your house is probably 10-15 percent. The net is much lower. I wouldn't want the guy building my house pissed , thinking he was losing money or irritated at all over a couple grand in the deal. Do this for him and he'll most likely take care of you in other ways. Be hard to work with to prove a point and you'll be disappointed in the end.

In short let the guy make a little money, be easy to work with, you'll both be happy.
AggieDruggist89
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It's not a guy or an independent builder. They're a big builder in the area. Never met the owner. Just the sales rep, project manager and interior person. Work is done by subs.
AggieDruggist89
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CaptnCarl said:

If this is your dream home, I'd probably let it slide. I usually offer to split change orders with contractors, because it's sometimes not worth getting sideways. Especially on the early stages.

If you have already signed a change order, and they have been nickel and diming you, I'd get serious with them. But before that, it's often worth studying the contract. If you think the contract is on your side on this, don't give them a dime.

Sounds like you should stand firm in this instance, or ask a lot of questions.


Not a dream home at all.
Bob_Ag
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Build It said:

Split it with them and move on. Do you really want to be sideways with the builder? It probably will not work out in your favor in the long run. The gross profit on your house is probably 10-15 percent. The net is much lower. I wouldn't want the guy building my house pissed , thinking he was losing money or irritated at all over a couple grand in the deal. Do this for him and he'll most likely take care of you in other ways. Be hard to work with to prove a point and you'll be disappointed in the end.

In short let the guy make a little money, be easy to work with, you'll both be happy.
Not to sidetrack the convo, but in my area, the profit margins are quite a bit higher than that. I've seen the direct costs and land costs. Gross profit is easily 20+ percent on base floorplans. It goes higher as the options go up.

expresswrittenconsent
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Watch out for a bag of raccoons in the chimney.
aggiepaintrain
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I would want some free upgrades or something else to sweeten the pot for me. I would not want to piss off the person in charge of building where I live.
I guarantee they will try to get that $4600 somewhere else and maybe even more than that, people are just that way. Kinda like acting like they owe you something for a simple mistake

Bob_Ag
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The people actually building his house will never know this event even happened. They are all subs and won't have a care in the world. Some of you are acting like the builder is going to go taddle tale to all of the framers, masons, and other contractors.

And it's not a simple, honest mistake. Had the buyer known, he may have never made the structural change to begin with, which I am pretty sure cost him a decent chunk of change already. It may not have been intentional, but it was misrepresentation. Like I said, its a drop in the bucket to them, they should eat the cost.
expresswrittenconsent
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Bob_Ag said:

The people actually building his house will never know this event even happened. They are all subs and won't have a care in the world. Some of you are acting like the builder is going to go taddle tale to all of the framers, masons, and other contractors.

And it's not a simple, honest mistake. Had the buyer known, he may have never made the structural change to begin with, which I am pretty sure cost him a decent chunk of change already. It may not have been intentional, but it was misrepresentation. Like I said, its a drop in the bucket to them, they should eat the cost.

Well in that vein does he have any room to negotiate? Like for the builder if he agrees to pay the 4600 (or half of it) is there some other padded area he can ask for some type of upgrade?
Ulrich
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Might be an honest mistake, but it's still five thousand dollars the customer did not agree to pay. If the work has been done, the builder needs to eat that and if it were me I would be a little bit irritated that they even asked.
Bob_Ag
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expresswrittenconsent said:

Bob_Ag said:

The people actually building his house will never know this event even happened. They are all subs and won't have a care in the world. Some of you are acting like the builder is going to go taddle tale to all of the framers, masons, and other contractors.

And it's not a simple, honest mistake. Had the buyer known, he may have never made the structural change to begin with, which I am pretty sure cost him a decent chunk of change already. It may not have been intentional, but it was misrepresentation. Like I said, its a drop in the bucket to them, they should eat the cost.

Well in that vein does he have any room to negotiate? Like for the builder if he agrees to pay the 4600 (or half of it) is there some other padded area he can ask for some type of upgrade?
I mean, from what it sounds like, the contract was executed and the terms were set forth.Not really seeing where the builder has a pot to piss in to be honest unless there is some provision in the contract.
Bonfire1996
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He shouldn't be asking you for this money, period. Saying no to him is likely going to piss him off, because he has demonstrated what type of business man he is by asking you to pay it. Paying it invites other changes at your expense.

1. I'd ask for the work to be completed and for him to submit to you all the mason's bills so you can check his math. He may end it right here. He won't want to share that.
2. I would demand a lien waiver that the mason signed for being paid for the work to completion.
3. I would ask the builder to await final completion of the entire home to ensure no more unforeseen change orders take place.
4. Tell him once the house is complete, "we will settle up what is owed."

Once the house is finished to your satisfaction, I would
A. Pay him
or
B. Ask him to show you where in the contract you are liable for a take off mistake in the bid process.

A or B simply depends on how you feel about everything.
AggieDruggist89
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I haven't responded to the email and I will just sit on it. They can't reconfigure the stonework without breaching the contract as the material sheet clearly shows the elevation on what it's supposed to look like.
IrishTxAggie
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AggieDruggist89 said:

I haven't responded to the email and I will just sit on it. They can't reconfigure the stonework without breaching the contract as the material sheet clearly shows the elevation on what it's supposed to look like.
Be sure to provide updates. These stories is why I come to the Real Estate board!
FancyKetchup14
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Noticed you said SW Virginia. Is this Ryan homes?
AggieDruggist89
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FancyKetchup14 said:

Noticed you said SW Virginia. Is this Ryan homes?


Stateson..... Ugliest houses ever
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