Steve Payne
I don’t have a clue what to charge!
Canadian ContractorOur Florida subscriber, Ivey, is not the first contractor to get nervous about pricing out a new home build, when they have been pricing mostly renovations for years.
Our Salary Survey is up and running, and it helps everyone to get a grip on shifting gross and net margins in both renovating and custom homebuilding.
Here is a question from Ivey Harris, a reader down in Florida, on the challenge that renovators face when asked to do a custom home build, re: the old question: What to charge. Comments anyone?
“I am a small remodel contractor in Florida and that’s what I mostly do, residential and commercial. Like most renovators, occasionally I get asked about building a new home. I don’t have a clue what to charge for a fair contract for the owner and for me, versus my experience in fair prices for remodeling. Do you have any guidelines for this?”
I am in the same boat when it come to pricing new homes. I get asked a few times a year to bid on a new home. I will not price anything that does not have a full set of construction drawings. I price it the same way I do an addition, where I submit the plans to my material suppliers, and apply my standard sub trade rates in sqft or unit allocations. ie. drywall by the sqft, elect by the box. I also allow for site costs such as clean up labor, in house alterations, dumpsters, safety railings & supplies, port-a-john’s, heat & generators. I then factor in my “management cost”
So the first thing I ask myself is “do I want the work?, Is it something I can take on? Do I have the manpower? and do I want to get involved in this type of work? OK so more then one question. Pricing new construction would involve getting the subs to commit to a fixed price first. For anything you would do price it the same way you would do a reno. OH and P tend to be lower in new construction on a percent base but the total dollar value will be higher as the project is larger in nature. There are lots of additional factors to consider when pricing new as well, esp. if this is a new world for you. Surveyors, form workers, excavation etc. before you get out of the ground.