Never Sign A Builder's Contract
Thought you all might be interested in this.
NEVER SIGN A BUILDER'S CONTRACT
If you build or remodel your home, you could be stuck with a huge unexpected bill unless you take one simple step to protect yourself. The high cost of building materials means some builders are coming up with a sneaky way to jack up the price of a new home or remodeling project. And you need to beware. They're using something called an escalation clause, which is added to the contract. Basically it gives the builder the right to pass on to you any material costs above the expected total. Often times it's hidden in the fine print. This is why you should never sign a builder's contract. They are very one sided and you cannot control the outcome. Instead, hire a construction attorney to help you write up a contract. Ask the attorney to negotiate with the builder for a cap on what you will pay for the project. That way, you'll be protected.
Best,
[addsig]
Hi there....
I just thought that I would add a bit to this. In working as a general contractor now for the past seven years, I have had lots of experience in dealing with these types of contracts from both sides.
The cost of building materials today is an unpredictable thing. Recently, the price of steel has skyrocketed causing increases in prices for steel studs, piping, and even metal door jambs. Many contractors (including myself) have had to begin including stipulations that bids are only good for 30 days, as this seems to be the longest period of time that prices can be guaranteed.
While every GC will try to protect himself from rising product costs, he also knows that a savvy customer will not and should not agree to escalation clauses. As mentioned above, do not sign a contract with a stipulation like this in place. In addition, never work with a contractor that demands large sums of money up front. Reputable contractors will have accounts with supply houses that eliminate the need to get money up front from their customers.
Not all contractors are bad people, but with anything, there are always people looking to take advantage of a situation. Buyer beware, and read those contracts closely. I have tips for anyone looking to write their own contracts from an owner's standpoint, and would be happy to pass along ideas. Just message me, or send e-mail.
Happy Building,
Matt