Caught by the inflation demon

[grsthegreat]

You wont make a cent in court. .. hes offering you the return of your deposit.

its not his fault prices have gone nuts. But it is his fault for not placing a clause in contract to cover price increases due to inflation.

as long as he returns all funds less permit fee, i dont see why you would try to force a job completion that will have to be done half assed to prevent his bankruptcy. I know my state will refund permit fees if not used within 6 months. Not sure about yours.

 

[ArlyA]

A freind of ours built a house here and while that was going on, he brought the crew pop, donuts and snacks on regular bases. He made sure they felt appreciated by them. Why would they do that? He was a retired union construction worker and knew 1st hand if the company his crew was working for put the screws to his guys, they'd "get back at them" every chance they could while they weren't being watched. Since you can't watch the crew building your house 24/7, I'd be really careful about cutting their $$$ back.

 

[4570Man]

You wont make a cent in court. .. hes offering you the return of your deposit.

its not his fault prices have gone nuts. But it is his fault for not placing a clause in contract to cover price increases due to inflation.

as long as he returns all funds less permit fee, i dont see why you would try to force a job completion that will have to be done half assed to prevent his bankruptcy. I know my state will refund permit fees if not used within 6 months. Not sure about yours.

I’d worry about the competence of the builder for agreeing to such a contract to begin with. Anyone with any sense that’s watched anything the last 2 years knows the material is too volatile for a deal like that.

 

[jigs_n_fixtures]

The OP might want to look at a smaller expandable home. The house my Dad built was designed to be done in stages. He built the core kitchen, family room used as two bedrooms, tow baths, with one finished, and a dining/living room. Then built four more bedrooms on one end, and a carport on the other. Then built the garage past the carport, and the carport got closed in and became the living room. He had a bad mitral valve when he started, and wouldn’t go any further in debt, than his life insurance would pay off just in case he died.

Materials prices here are nuts. If you can find products. I just spent most of a week trying to buy a 100-gallon light commercial weather heater for a helibase. lead time were four to eight weeks, maybe, for a new propane unit. Six weeks or so for triple element electric units. i finally found a guy only 120-miles away who happened to have two electric units in his warehouse, and was willing to make the 120-mile delivery. The base has been without hot water for almost a month. The new electric unit was almost three times what I paid for a similar unit two years ago.

I bought a new Rhem Marathon for my house, it only took a month to get here. So, this weekend will be devoted to laundry. I have five weeks worth piles up. Guess I should be grateful that I own enough clothes to go five weeks.

 

[beowulf]

This proves once again that posting here is alway a wise first step. I am getting much advice, information and support and it is very much appreciated. I mean that.

I will think over my strategies - with the input received here.

Possibilities and likely: (all will be documented in emails)
Let them know that they will be in breach, but that settlement is a far better course - and make an offer to pay some of the increase - acknowledging they are getting hit with increases - but not my fault - and agreeing on any other details that may present issues going forward.
Depending on how that goes:
-cancel and get the refund (BTW - the builder said he hopes I will not cancel)
-get bids on the existing and approved plans
-consider tackling the build ourselves - and perhaps downsizing what we contemplated
-consider a totally different plan, a log cabin kit, or other options.
(I do see cabin kits at reasonable prices - downsized from what we were going to build, but recognize the issues they present)
-talk to some of the locals as to what they might be able to help with.

I will discuss all this with my (uber deserving) daughter and SIL tomorrow when they are both here.

BTW - in reliance on the agreed to contract price we proceeded with, and budgeted for everything else - well drilled, pad, road septic test holes, pump installed, water tanks bought and delivered and pad built for those, water yield tests and more.

 

[ultrarunner]

Contracting at work I go out of my way to help anyway I can and in 30 years it has paid off...

Could be as simple as having the site work ready, being reachable and bringing by goodies for the crew.... probably the big gulps we're the most appreciated by the framers during a mini heat wave!

Friday after work beer well received too.

What part of the increase is for foundation, framing, siding, roof, rough plumbing and windows... in other words weather tight?

Maybe the kitchen doesn't get the stone counters and only one bathroom finished or the floor is plywood?

Many in my family built their homes as they could afford which often took a lot longer but it meant they were able to end up with what they wanted..

 

[grsthegreat]

The OP might want to look at a smaller expandable home. The house my Dad built was designed to be done in stages. He built the core kitchen, family room used as two bedrooms, tow baths, with one finished, and a dining/living room. Then built four more bedrooms on one end, and a carport on the other. Then built the garage past the carport, and the carport got closed in and became the living room. He had a bad mitral valve when he started, and wouldn’t go any further in debt, than his life insurance would pay off just in case he died.

Materials prices here are nuts. If you can find products. I just spent most of a week trying to buy a 100-gallon light commercial weather heater for a helibase. lead time were four to eight weeks, maybe, for a new propane unit. Six weeks or so for triple element electric units. i finally found a guy only 120-miles away who happened to have two electric units in his warehouse, and was willing to make the 120-mile delivery. The base has been without hot water for almost a month. The new electric unit was almost three times what I paid for a similar unit two years ago.

I bought a new Rhem Marathon for my house, it only took a month to get here. So, this weekend will be devoted to laundry. I have five weeks worth piles up. Guess I should be grateful that I own enough clothes to go five weeks.

Well, if you only change underwear once a week……

 

[4570Man]

Well, if you only change underwear once a week……

I’d be a lot more in favor of building the shell and finishing it in stages vs trying to add on later. Adding on always cost a lot more than just doing it to start with and frequently is cobbled up.

 

[2manyrocks]

6 months to get a permit...if changes to the plans are made, does that trigger a new approval process and how long will that take?

 

[Dftodd]

Go ahead and vent… it’s a way to get things off your chest.

We just finished a commercial project with delays but the only saving grace is materials ordered at time of signing which worked pretty well.

If materials are really up a lot I imagine not much opportunity for savings except taking on some of the work?

New home construction being built on a postage stamp lot around here were starting at $130,000 3 years ago.

They are now starting at $195,000 for an 1100sqft home.

Neighbor purchased a small lot and was going to have a house built on it.

Lot was on a hill side, so they were gonna have to do a foundation and substantial crawl space instead of a slab.

Current prices made it prohibitive. They have the lot for sale and purchased a home in town instead.

 

[Torvy]

Glad we are building where we are...virtually no permitting needed. 6 month wait for you and the builder is unconscionable. They should be refunding your fees even if work does continue.

Good luck. Keep us posted on the progress

 

[Dftodd]

I looked at a log home when house hunting 20 years ago. The realtor said they were nice to look at, but the maintenance on them was an ongoing problem. Probably some of the most honest real estate advice I've ever gotten.

My grandfather had a log cabin built for my grandmother before she passed away.

Windows and eaves needed to be sealed periodically. Seemed like that was every year due to shrinking and swelling. Periodic exterior staining every few years.

And for some reason, they could never keep the wasps out of the place. They would find a little chink in the armor and move back in.

That was a constant battle.

The place was very comfortable. But a lot of work.

 

[beowulf]

Ditto on taking care of the crews. For various projects here I would let them know I would get their lunches - asked them when they took lunch and went and brought food back. I made sure there were chairs and shade and a table for lunch time. Had ice and sodas and water. At the end of the day, I would ask the supervisor if it was okay if I gave them a beer - making sure it was just one. A couple of times they were a guy short and I helped out (though the supervisor, I was found out later, was told not to do that again). Those projects were for reroofing, stucco, a garage/gym building, a concrete pour, and more.

 

[orezok]

I was a licensed general for 40 years. In all that time, never once did I have a sub tell me that a cost had gone down, or that he over estimated an item and that the cost was actually less. Sometime it happens that they guessed too high or the original supplier they planned to use was too expensive. Some generals use the same subs on all their projects and the subs do a cost creep on every job. If you are assured of the job, costs go up along with the profit.

The general finally figures it out and dumps them to get back to market value.

Sit down with your builder and go over the cost line by line and determine if he is actually bidding the work or just using his “good ole boy network” for cost.

You may be surprised and he may be also.

 

[dmccarty]

We looked at log homes and homes built with 6x6s(long story on that design) but in then end, after talking to people and investigating these construction methods, decided to build stick built. We also look long and hard at ICF.

Log homes have issues with settling/shrinkage, bugs, rot, and were more expensive to build when we making decisions. I even read of a case, where the log home was put up during the week, and was stolen over the weekend. Never would have thought that would happen and it certainly is unusual.

As others have said, if the contractor wants out because of money issues OR he has a more profitable house to build, do you really want him building your house?

I would not want to be building or buying a home right now. Too much uncertainty and high prices for materials and workers.

We know of a house sale where the buyers AND sellers have gotten themselves into a real bad situation. The buyers have a good lock on an interest rate but the lock has run out and they are paying the bank money they cannot afford to keep the rate. Each day they pay quite a bit money When the house inspection was done, quite a few problems were found, which was surprising, and these are going to be expensive to fix so the house price was renegotiated. The buyers WANT the house for a variety of reasons but a major one is the low interest rate. If they don't get the house, they will have a much higher rate and they will have to buy a much smaller home as a result. The seller is shafted because of equity debt(Long HORROR show that would shock TBNers) that they don't have the cash or equity to FIX the problems found in the inspection. The sellers will have to disclose the problems to future buyers if the sale falls through and the seller has to sell because of raising interest rates on the equity loan. If it was me, I would run from the sale based on some of the problems found in the inspection. The builder should be hung for what he did and I am shocked the house passed inspections. The current buyers are willing to deal with the problems because of the interest rate lock..... It is a vicious circle the buyer and seller are locked into.

Later,
Dan

 

[ultrarunner]

Some friends are generals although all retired now.

Almost across the board they would spread business around even if it was just one job out of 7 or 10.

I asked why and was told good for business both so no one gets too comfortable but also to establish multiple relationships to have established back up.

My builder friend was at the coffee shop and a commercial electrician said how about letting my boy bid on your next spec home as I want him to have residential experience.

The way it worked was dad basically bought the job for his son and made sure it was done right.

It was half the cost and no shortcuts.

 

[Larry Caldwell]

My grandfather had a log cabin built for my grandmother before she passed away.

Windows and eaves needed to be sealed periodically. Seemed like that was every year due to shrinking and swelling. Periodic exterior staining every few years.

And for some reason, they could never keep the wasps out of the place. They would find a little chink in the armor and move back in.

That was a constant battle.

The place was very comfortable. But a lot of work.

I saw Hoy Axton's house on the North Umpqua. He was living there when he wrote "Joy To the World." Jeremiah was a chainsaw carving of a frog that sat on the porch.

It was a log mansion. We actually looked at buying it, but the necessary maintenance was outside our budget. The bottom two courses of logs needed replaced, and I would have put a copper lock seam roof on it. It was a beautiful hand carved two story log house. The interior door latches were carved pine knots, smoothed to fit your hand, with a hand carved wooden mechanism. It was built in the '50s by two bachelor brothers.

I hope somebody bought it who deserved the place.

 

[DB Pilot]

We had our house built in 2019. Just a short 44 years from the day we were married and planning a house. We found a good builder and are satisfied with the house, but I must say the BS these contractors have is difficult to deal with. I would not want a disgruntled contractor any where near my property.
We also lost money in plans that we had to step back from, for various reasons and misunderstandings, but I like to think that our guardian angels kept us out of trouble, until we found the right way for us to go.

 

[Hay Dude]

We had our house built in 2019. Just a short 44 years from the day we were married and planning a house. We found a good builder and are satisfied with the house, but I must say the BS these contractors have is difficult to deal with. I would not want a disgruntled contractor any where near my property.
We also lost money in plans that we had to step back from, for various reasons and misunderstandings, but I like to think that our guardian angels kept us out of trouble, until we found the right way for us to go.

The primary reason I stopped actively being a builder was the severe degradation in subcontractor quality I experienced from about the beginning of the last great recession in 2008.
I was building and farming from 2000 to today, but by 2020 I had pretty much stopped my construction business advertising and walked away from quite a few offers to build homes.

Too many of today’s customers are overly involved in the process and my good subs retired. New subs I tried made too many mistakes and I knew it was time.

I reshaped my construction business to a more barn/farm construction and away from residential. Also tripled the size of my farming business.

Much happier now.

Will be rebuilding the foundation of a barn to keep a foot in construction for a while longer.

 

[dodge man]

Sometimes the best thing to do is just walk. Stop the entire project for now. I’ve missed out on a house, cars, trucks and felt bad at the time but later realized it was for the better.