Construction contract canceled | Coffee Break Q&A #18

Nick Schiffer answers your construction, renovation, and business questions in-depth on Coffee Break. If you have a question leave it in the comments below. This week the questions are:

:35 Is the money your making as a GC worth more than just being a carpenter? Not looking for a tax return, but are the numbers going through your accounts simply larger or are you actually earning that much more? I understand a single pair of hands will earn you a single wage, but I’ve been a carpenter for 25 years. I’m always torn between hands on work gratification, sustainability, and money...(notice, I mentioned money last, if you provide a quality product, the money always works out.).

4:19 If you decide to roll a mistake into your overhead, do you ever run into issues with the increase in overall construction time that the mistake will cost you? I’d imagine that clients wouldn’t mind it not costing them more but they might mind if the schedule keeps getting pushed back.

6:30 As a non-professional (homeowner), I’ve had a few past experiences with less than ethical builders that have not paid subs, not bothered to get permits and come back with unexplained price increases. I appreciate the company wisdom of a 20% deposit of unearned income to buffer your expenses but how do clients of less reputable builders protect themselves from being taken advantage of in that model? I’m on the verge of another project and assumed a progress based payment schedule with a 10% holdback would be a reasonable arrangement for most builders? Do you have any suggestions for someone living in the wild Wild West where there are still plenty of bandits wearing tool belts...

11:36 (1) how did that cancellation happen, (2) what’s your practice in those circumstances, and (3) what are the financial consequences for the homeowner? and how do you personally deal with it?

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