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Of your total construction costs, what's a fair percentage to pay in profit and overhead to your general contractor?
About 10-15%, but determining what your general contractor will charge takes negotiation up front and monitoring throughout the construction phase.
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You hire an architect to design and supervise your new kitchen addition. By the end of the design phase, you decide you do not want him to supervise the construction phase. Can you move forward without him? Who owns the house plans... you or the architect?
Surprise, the architect owns the house plans and you may not be able to use your copy to move forward.
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Your general contractor comes to you a week into your construction project and says he can get windows that are comparable to those in your house plans, and reduce their cost by 20%. What do you do?
After confirming that the proposed windows are comparable, you'd better research the cost and find out what portion of the actual savings you're being offered by the general contractor.
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Your house plans have an error in them that result in a code violation. The city inspector catches the error and insists the problem be rectified before you can occupy the space. Most likely, who will pay for the fix... the architect who designed the error, the general contractor who built the error, or you?
Ouch! It's rarely the architect or the general contractor. Most often it's you.
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You walk into the newly wired home office addition and find the overhead light has been located in the wrong place and the electrician is there. How do you rectify this situation?
If the electrician is working for a general contractor who is working for you, do not give directives to the electrician. Contact the general contractor immediately.
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Your general contractor has asked you for 30% of the total construction cost up front or "he cannot start the project". What do you do?
If you have a construction loan, your loan officer can help you limit and structure up front payments. Otherwise see if you can buy the materials directly from the supplier to help the project get started.
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