Home Building Contractor Secrets How to Buy Wholesale and Save 40000 or More on the Construction of Your Dream Home Without Driving a Nail

Home Building Contractor Secrets:

How to Buy Wholesale and Save $40,000 (or More) on the Construction

of Your Dream Home Without Driving a Nail

By Lane W. Moore

Home Building Contractor Secrets

Build It Wholesale - $ave Thousand$

Home Building Contractor Secrets:

How to Buy Wholesale and Save $40,000 (or More) on the Construction of Your

Dream Home

By Lane W. Moore

ISBN: 1-933351-01-2 Published by BooksOnStuff Publishing, 2005

©2005 Lane W. Moore. All rights reserved. No part of this publication may be

reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, recording or otherwise, without the prior written permission of

the author.

Produced in the United States of America.

©2005 Lane W. Moore 1


Disclaimer Side effects of home building may include headache, nausea, indigestion, diarrhea, domestic trials and losses of large sums of money. There is always risk of loss when building any home. Failed construction projects can cost the builder or owner (or both) anywhere from hundreds of dollars to millions. . It is the responsibility of the reader to sufficiently prepare himself/herself for an undertaking of this kind and to seek whatever advice, guidance and counsel necessary to successfully complete a home building project. It is also the reader’s responsibility to determine whether he/she is qualified psychologically and financially to do the work of a building contractor. Under no circumstances will the author or publisher assume any responsibility or liability for any loss incurred in a home building project by a reader of this book.

Dedication Luther Moore, Jr. was a successful businessman and building contractor who perfected the techniques described in this book. He was my father. And like all good fathers he taught his son what he knew. He taught me not only most of what is found in this book, but he also taught me about salvation through Jesus Christ. I will be forever grateful.

About the Author

Lane Moore has worked as a general building contractor, Realtor and currently is a commercial property owner and lessor. During his twenty-five years as a builder, he has overseen the construction of more than one hundred homes and commercial buildings. This book is the direct result of lessons learned over those twenty-five years. Lane Moore resides in Kansas with his wife of thirty years, LaDonna (a city and community planner). They have three children, Aubree, Jesse and Lacey.



Table of Contents

DISCLAIMER 2

DEDICATION 2

ABOUT THE AUTHOR 2

TABLE OF CONTENTS 3

INTRODUCTION 9

Your Dream Home Doesn’t Have To Be Just A Dream 9

The Contractor’s Secret 10

Subcontract Your Way to Your Dream Home 10

You Can Do It 11

Buy At Thousands of Dollars Below Market Price 11

Don’t Pay Retail 11

Buy Wholesale 11

Make This Book Work for You 12

CHAPTER 1: HOUSE PLANS 14

Estimate Cost 14

What Type of Plan? 15

Computer-Aided-Design (CAD) Software 16

Designer 16

Plan Services 17

Complete Set of Plans 17

Summary 18

CHAPTER 2: BUILDING OFFICIALS AND CODES 19

Building Department 20



Rapport 20

Code Book 21

Plan Review 22

Disagreements 22

Summary 23

CHAPTER 3: FINANCING 24

Preparation 24

Qualify Yourself 25

Charge Cards 27

Selecting A Lender 28

Pre-Qualifying For Your Loan 29

Other Loan Application Information 30

Freddie Mac 30

CHAPTER 4: BIDDING 33

Specifications 34

Price Discounts 34

Lender Endorsement 35

Bid Confidentiality 35

Sales Tax 35

Surprises 35

Choosing Bidders 36

Conventional Materials 37

Building Codes 37

Written Bids 37

Court Of Law 37

Change Orders 38

Summary 38



CHAPTER 5: SOLICITING BIDS 39

Construction Staking 39

Excavation and Backfill 39

Footings 40

Foundation Walls 41

Buying Material 44

Foundation Drainage System 44

Concrete Slabs 45

Termite Treatment 47

Rough Carpentry 48

Shingling 50

Equipment 52

Exterior Siding 52

Windows and Exterior Doors 52

Sectional Garage Doors 54

Finish Carpentry 54

Cabinets 56

Hardware 57

Counter Tops 57

Masonry 57

Drywall 58

Paint, Stain and Varnish 59

Floor Covering 60

Insulation 61

Electrical 62

Plumbing 64

Heating, Ventilation and Air Conditioning (HVAC) 66



Telephone and Cable TV 67

Appliances 68

Trash 68

Eave Gutter 68

Irrigation System 68

Landscaping 69

Odds and Ends 69

Contingencies 69

Builder’s Risk Insurance 69

Subcontractor Credit Worthiness 69

Summary 70

CHAPTER 6: FINALIZING SUBCONTRACTS 71

Evaluation 71

More Checking 71

Credit 72

Utility Hook-Up Charges 74

Interim Interest Costs 74

Building Lot 74

Total Cost 75

Summary 75

CHAPTER 7: BUYING YOUR BUILDING LOT 76

Zoning 76

Where to Build 77

Overbuilding For the Neighborhood 77

Orientation to the Sun 78

Restrictive Covenants 78

Easements 79



Summary 82

CHAPTER 8 : CONSTRUCTION PREPARATION 84

Permit 84

Pre-Construction Conference 85

Temporary Utilities 86

Summary 87

CHAPTER 9: THE SCHEDULE 88

Delays 92

Speed vs. Quality 92

Summary 92

CHAPTER 10: RECORDS 93

House Estimate File 93

Unsuccessful Bidders 93

Unpaid Bills 93

Paying Bills 94

Checking Account 95

Running Cost Record 95

Cost Reconciliation Record 95

Approving Bills 96

Freight Bills 96

Retainage 96

Summary 96

CHAPTER 11: CONCLUSION 97

APPENDIX I: HOME COST WORKSHEET 98

APPENDIX II: COST RECONCILIATION RECORD 102



APPENDIX III: MORTGAGE PAYMENT CALCULATOR 105

INDEX 107



INTRODUCTION Your Dream Home Doesn’t Have To Be Just A Dream Picture your Dream Home. Does it look like something out of the pages of “Better Homes and Gardens,” or off the cover of a house plan catalog? Is it a Mediterranean two-story or a California contemporary? How about a lakeside A-frame cabin? How many bedrooms – four, five, six? How many bathrooms, one for every bedroom? Or, maybe it’s a simple three bedroom, 1 3/4 bath ranch-style that is yours… and not your landlord’s. Regardless of its size or style, for most people their Dream Home is just that – a dream. Why? One thing pure and simple: money. Dream Homes, and every other kind of home for that matter, are expensive. That’s why they’re called dreams. It seems like we can never quite afford or justify the cost of our Dream Home. What if you could build the home of your dreams for thousands of dollars below market price? In other words, buy at wholesale what is regularly selling at retail. Buying low and selling high is a concept successful investors use all the time. Now you can apply it to your home. And it’s not a concept for Dream Homes only. You can apply it to a family room, bedroom addition, or kitchen remodel just as easily. In fact, when it comes to construction, you can always buy wholesale – when you know how. You buy wholesale when you become your own general contractor and build it yourself. Please understand, build it yourself does not mean do-it-yourself. This book is not going to teach you how to do the backbreaking work of pouring and finishing concrete. You aren’t going to be hauling 100-pound bundles of shingles up a 20-foot ladder or meticulously fitting mitered door trim. There are volumes of books and newsstands full of magazines dedicated to do-it-yourself work.



The Contractor’s Secret What this book will teach you is how to become your own building contractor by subcontracting all the work. Instead of teaching you how to do-it-yourself, this book will teach you how to hire-it-yourself and save tens of thousands (and in some cases hundreds of thousands) of dollars in the process. This is the contractor’s secret. Women can do this type of contracting just as easily as men. You do not need specialized knowledge or skills, and average intelligence will do just fine, thank you. As long as you’ve got the desire to build your Dream Home at a fraction of its normal cost and can follow directions, you can learn to be your own general contractor. Subcontract Your Way to Your Dream Home What is subcontracting? As defined by the Oxford Dictionary, a subcontract is an “arrangement by which a person who has contracted to do work arranges for it to be done by others.” Simply put, the first contractor (the general or building contractor) hires subcontractors (tradesman and vendors) to perform work and supply materials used in the building of a home. This part can be a little confusing. Each subcontractor hired by a general contractor is a contractor as well, and only is called a subcontractor because he is working for another contractor. Example: an electrical contractor, a plumbing contractor, a masonry contractor are all subcontractors when hired by the general contractor (often times referred to as the building contractor). Subcontracting is a way of life in the construction business. It is usually cheaper and easier for a building contractor to subcontract work to one who is a specialist in that field, rather than perform that work himself. Example: a carpet layer who lays carpet daily will do a faster and better job than a building contractor’s employee who might try to lay carpet once every couple of months. The same can be said for laying bricks, pouring foundation walls, hanging wallpaper and practically any other trade you can think of. Some building contractors have become so adept at subcontracting their work that they do none of the on-site construction of a home. If contractors can build homes without doing any of the construction themselves, “what are they paid to do anyway, you ask?” General contractors, more and more, are paid to manage the construction of a home, rather than do the actual building of that home. During the fifteen years that I was a general contractor building for others, and in the years afterwards building for myself, I can count on two hands the times I have put my own physical labor into a project. However, my customers were satisfied, my company was successful and I won several construction awards. I did it by employing honest,



quality- conscious subcontractors and by making sure that they performed to the best of their abilities. You Can Do It Please do not think that being your own contractor won’t require effort. Nothing of value is accomplished without effort. But it is something that you can do. And as mentioned before, women can do it just as easily as men. In fact, you’ve probably already performed the work of a general contractor. Anytime you’ve hired a tradesman to perform work at your home you’ve done the work of a general contractor. This book will teach you how to organize and manage that hiring on a larger scale… the scale that it takes to build your Dream Home. Buy At Thousands of Dollars Below Market Price “Why bother with the effort, you ask?” Why not just hire a general contractor like everyone else and pick up the keys when it is done? Most people buy new homes at retail. By being your own building contractor you can buy at thousands of dollars below market price. If you are not interested in saving anywhere from 10% to 30% (on a $200,000 home, that translates to $20,000 to $60,000 in savings) on the price of your new home, you may want to stop reading. Probably, this book is not for you. But if you think trading some of your effort for a $20,000 to $60,000 payoff is fair, please continue. Don’t Pay Retail Remember, general contractors have to make a profit to stay in business and they have to stay in business to service the customers they’ve built for. Staying in business means paying the overhead, which is a word for the fixed costs of a business. In the case of a general contractor, costs not incurred during the construction of a home but costs that have to be paid whether a home is built or not, is overhead. Office and warehouse rent, secretary and bookkeeper salaries, utility, telephone and advertising bills, as well as the ever increasing costs of workmen’s compensation and liability insurance are only some of the expenses that a contractor has to recoup with the sale of his homes. He recoups those costs in his markup or margin, which is the amount (10% to 30%) added to all the subcontracts involved in the building of the home. The more the recoup, the more the markup, the more the price of the home for you.

Buy Wholesale As your own contractor, you have no overhead. You do not need to make any profit. You are your only customer. Your savings will be the general contractor’s mark up and those savings will be substantial. Saving just 20% on a $200,000 home is a cash



savings of $40,000. If you take out a loan, saving $40,000 will translate into reducing your monthly mortgage payment (on a 15 year loan) by $350-$500 depending on your interest rate. What could you do with an extra $4000-$6000 a year or $60,000 to $90,000 over the next 15 years? Make This Book Work for You This book comes from the knowledge gained from fifteen years experience as a general contractor for the public plus an additional ten years experience as a general contractor for myself. It is knowledge that was acquired by doing things correctly, and in some cases doing things incorrectly. Lessons were learned from both successes and failures,but they were lessons learned nonetheless, and they are lessons that you can capitalize on – without the high cost of personal experience. I am committed that this book will benefit you and help you to build your dream home for significantly less than it would otherwise cost. I have been working on it for almost three years, trying to make sure that it includes as much critical information as possible without any unnecessary fluff. However, it is quite possible that I left out something that you would find helpful. Fortunately, since this is an e-book, it can be updated quite easily. So, if you have any suggestions for how the book could be improved, please let me know. My email address is [email protected]. As a special thank you, if you email any feedback on the book, I will send you a free bonus report that gives you a sample set of specifications you can use when getting bids from contractors. Please note: Due to the volume of mail that I receive, I cannot promise to respond to all reader questions. But I want you to be successful; so, I will do my best. However, please read the book before emailing me questions, as your question might already be answered within. Whether your Dream Home is a multi-story, ten-bedroom mansion or a cabin with a sleeping loft, with the knowledge you gain from this book you can be enjoying it instead of just dreaming about it.


mailto:[email protected]?subject=Feedback


SECTION I: PREPARATION

With most tasks, if it can be broken down into several smaller tasks, it is more easily understood and undertaken. Consider building your home as that task. We will break the process down into the following smaller tasks of sections, chapters and sub-chapters of this book. Once the smaller tasks are understood and implemented, a finished home at a wholesale price, many thousands less than the regular retail price is the reward. To paraphrase an old real estate joke, the three most important things to successfully building your dream home are … preparation, preparation, and preparation. Do not rush the preparation process. If your project runs into a snag, you can bet it was because you or one of your subcontractors was not properly prepared.



Chapter 1: House Plans

House plans or building lot, which comes first? It is something of “the chicken or the egg argument.” The lot people say anyone is silly to choose a house plan without knowing the configuration of their lot or its orientation to the sun. Pick the lot and adapt the house plan to it, they say. The plan people say you live in the house. Settle on your plan and then buy a lot that fits it. They are both right. What is most important to you is what you should prioritize. However, whether you own your lot or not, you need a house plan. Estimate Cost Before you choose your plan you want to be certain that you can afford to build it. What might keep you from being able to build your home? Namely, the cost of construction. So, how can you know, before you go to the work of deciding on a plan and taking subcontractors’ and suppliers’ bids, that you can afford the home you’re trying to build? You can’t completely, but you can usually get a pretty good idea by asking Realtors, contractors, appraisers and lending institutions the price per square foot of new construction. I can’t give you prices per square foot in this book, because costs in geographic areas differ due to construction practices, proximity to raw materials and other factors. You must talk to the locals. Be prepared for this response from those questioned. It’s the one I usually used when I was asked. “That’s hard to say. Price per square foot changes depending on the size of the house, the type (such as ranch style or two-story), the finish and amenities. Then you say, “let’s talk about (you fill in the blank) a _______ square foot ________(ranch, two-story, split-level) home with (or without) a basement and a (two,



three or more car) garage. What would the range of price from standard finish to exceptional finish be?” After two or three responses you should have an idea of what you can do. Generally, price per square foot is figured on the perimeter dimensions of the living area of the home, excluding the garage and basement. If the basement is garden level, only partially in the ground such as a split-level, then it is counted as living area. Second stories, of course are counted as living area. Make certain that the people giving you estimates are basing their prices on the same assumptions and that you know what those assumptions are. What Type of Plan? Although a house plan is the obvious place to start when contemplating building your home, agreeing with one’s spouse on what that house plan should be can become a painfully elusive matter. “I want three bedrooms and a nice sized family room,” won’t get the job done when you are taking bids for rough carpentry. Your plan must be specific to layout, dimension, roof style and pitch, material type and any other specifications that we will cover. Picking a plan that you may live with for several years can be tough. I know of marriages that have caved in under much less strain than that fostered by house plan decisions. The family summit begins calmly enough with the first question addressed being the number of bedrooms. However, battle lines are drawn and the tempo picks up when the question is posed: “Do we include a fourth bedroom for that little someone who may or may not come along, or do we put a billiard room in the basement?” Quickly, the bargaining chips are on the table and any thought of a peaceful settlement is abandoned. The meeting collapses with the parting shot, “O.K. fine, you want a central vacuum system, I’ll just add another twelve feet to the garage and rebuild that Jeep I’ve been looking at!” “Jeep. What Jeep!?” Contractors are not immune. I once designed a home—my own as a matter of fact—around an antique oak pedestal dining table which—get this—belonged to my sister-in-law. Although the table is long gone, the wife is not and we lived in the home for twenty years. Things do work out. If things get a little tense as you are putting your plans together, just remember that nobody died and your kids still love you. If you have to give a little to agree on a plan, then give a little. Given that you are normal and didn’t wake up one morning with a vision of your new home’s exact layout, style and finish, I suggest that you acquaint yourself with as many



floor plans, house styles, amenities and exterior and interior finishes as possible. You can do that by looking at house plan books found on magazine racks, by reading home oriented magazines, or by going to open houses, home tours, and new housing development model homes. Computer-Aided-Design (CAD) Software A wonderful tool that combines a library of stock floor plans with the ability to design your own floor plan is computer-aided-design (CAD) software. Professional CAD software for architects and engineers has been around for some time. Now CAD software for consumers is available. Not only can you design your dream home with CAD programs, you can also look at it in 3D. Meaning, you can view your kitchen cabinets and their layout. Most programs allow you to locate furniture on the plan. Arrange a sofa, end tables, coffee table and chairs and see if you like it. Do you have room to comfortably move around or does it seem cramped and crowded? The furniture-arranging feature is invaluable. The first house I built, thankfully for myself, required quite a creative master bedroom furniture arrangement because every wall but one was filled with closet doors and windows. A quick tour through a CAD program would have prevented that. When you are satisfied with your floor plan, print it out. CAD programs can be found in software stores and over the Internet. Here are three, Professional Home Design Suite (www.punchsoftware.com), 3D Home Architect Deluxe (www.broderbund.com) and Floor Plan 3D Design Suite (www.imsisoft.com). Get one of these or another good one. New ones come out periodically. It is good preparation and good preparation saves you money. Take plenty of time evaluating your plan. That is the beauty of CAD programs. Changes are easy and they cost you no money. Once you take your plans to a draftsman or architect to draw your bid drawings, re-drawings can become expensive. But what is really expensive, like national debt expensive, are changes made after construction begins. Remember this formula, more planning and preparation before construction = less money spent after construction. Designer Now that you have settled on your floor plan, house style, finishes and amenities you need a complete set of plans drawn. Depending on the building laws where you live and the complexity of your plan, your designer will be either a draftsman accomplished in drawing house plans or a registered architect. These plans will be used not only by subcontractors to place bids on their work but also by building officials when it comes time to procure a building permit so you can begin construction.


http://www.punchsoftware.com/

http://www.broderbund.com/

http://www.imsisoft.com/


If you pay someone for drawing plans you want to make sure that both the person and the plans are acceptable to the local building department. If the building department in your town does not require plans drawn and sealed (stamped) by a professional architect, you can often times save quite a bit of money on the cost of your house plans by having them drawn by an accomplished draftsman. However, if you are not using a registered architect, research the draftsman that you intend to use to make certain that he is capable of the job and your building department will accept his plans for a permit. To find a good designer ask the building department in your town for names of either draftsmen or architects accomplished at drawing house plans. If you don’t get any help there, ask around at the lumber yards and cabinets shops or question tradesmen involved in the building of new homes. Once you have the names, take your CAD drawings to them and ask for a price on a complete set of plans. Plan Services Plan services provide professionally designed house plan packages from a multitude of stock floor plans. Often times they can make minor modifications to their inventoried plans for a reasonable cost. Because they work on volume (they sell the same plan to more than one customer) their costs can be considerably less than a custom design by a local designer. The catch is that you are limited to their plan. However, you can find a wide variety of plans from plan services, everything from modest to mansion. Just make certain that the plans comply with your local building code. Plan services can be found in plan books, on magazine racks, or on the Internet. Some websites are www.dreamhomesource.com, www.eplans.com and www.homeplaninfo.com. These are just three of many. For others do a word search on “house plans.” Complete Set of Plans A complete set of plans should include at least a floor plan, foundation plan, the exterior elevations, a cross section and a site plan. The floor plan should locate all electrical outlets, fixtures and breaker panels, as well as, all plumbing fixtures and furnace and air conditioning units. The foundation plan outlines and details all concrete footings, foundations and basement walls. The exterior elevations are drawings of each side of the home from a straight on view point, detailing the window and door locations, exterior wall coverings, shingles and any other exterior features the home will possess. Elevations are drawn to scale, without any representation of depth.


http://www.dreamhomesource.com/

http://www.eplans.com/

http://www.homeplaninfo.com/


A cross section is a cut away side view of the home identifying material that is unseen, such as building paper, sheathing, flooring, roof decking, trusses, joists, insulation, stud walls and foundation walls. The site plan defines the boundaries of the lot, locates the house and any other improvements on the lot. Obviously, the site plan cannot be drawn until the lot is purchased. Make certain that your prospective draftsman or architect understands the local building code or codes and will draw your plans to conform to all applicable codes. This is very important. When you go for your plan review you want your plans to meet the building code without changes. Ask to see your prospective draftsman’s or architect’s work. Hire him based on his expertise, helpfulness, demeanor , and of course, price. Take all the time you need to ensure that your plan is what you want it to be. Regardless of how often this is said, it can’t be said enough. It must be clear and concise and portray exactly what you want to every subcontractor that looks at it. It must also be complete. Making changes and additions on the job site can blow a house budget faster than an unexpected baby. Remember the home designed around the dining room table? It also featured a 15% cost overrun because the builder (i.e., me) decided to add some things during construction. You know, a bathroom here, a partially finished basement there. Make all the changes you want on paper. Once construction begins, restraint is the key. Regardless of how much harping I do, it is inevitable that something will be changed or added on the job. When it is, get a price quote on a change order from the subcontractor involved BEFORE the change is made. Change orders will be covered in Chapter Four, Bidding. Now that you have decided on a house plan, what’s next? You will need several complete sets of drawings. Start with six, as well as an additional six floor plans. However, purchase only one complete set until your plans have passed a preliminary plan review by your local building department. Plan reviews will be covered in Chapter 2. Although each of these plans should be drawn to scale, actual dimensions should be recorded as well. A plan cannot have too many written dimensions. The more dimensions that are left for a subcontractor to scale and interpret, the more potential for error. I saw a bathroom once that was built without the aid of written dimensions. The toilet was so close to the wall that it had to be ridden sidesaddle. Summary Preparation. Preparation. Preparation.



Chapter 2: Building Officials and Codes It is the duty of local governments to enact laws that protect the health and welfare of their citizens. Building codes are one manifestation of that duty. As stated by the Uniform Building Code, “The purpose of this code is to provide minimum standards to safeguard life or limb, health, property and public welfare by regulating and controlling the design, construction, quality of materials, use and occupancy, location and maintenance of all buildings and structures within this jurisdiction and certain equipment specifically regulated herein.” Although not worded exactly the same way, all building codes agree on that same purpose. There is more than one building code. The main codes observed in the United States are the Uniform Building Code (UBC), the Southern Building Code Congress International (SBBCCI), the Building Officials and Code Administrators International (BOCA), and the International Conference of Building Officials (ICBO). The SBBCCI, BOCA and ICBO are merging into one organization, the International Code Council (ICC). These codes are published in book form that is referred to as (surprise) a code book. There is only one building code per city or county, and one can be confusing enough. So, these building codes compete for circulation, so to speak. Because city and county governments don’t have the time or expertise to write their own building codes, they usually adopt one of these codes into law as an ordinance, sometimes with minor changes to conform to local needs. Building code organizations supply fill-in-the-blank sample ordinances to aid governments in the ordinance adoption process. Further references to building codes shall be generic. The various codes are similar in content and, on a single-family residence, differ only slightly, if at all. Also, further references to city in this chapter shall be read to include county and other local governments with the power to enact building codes into law. Companion codes, such as electrical, plumbing and mechanical (heating, air conditioning and ventilation) codes are adopted to ensure safety in those areas of construction as well.



These companion codes are compatible or are modified to be compatible with each other and also with the building code of your city.

Building Department The duty of enforcing the building code and other related codes lies with the building official and his staff of inspectors. The building official, inspectors, plan reviewers, secretaries and clerks make up the building department. Depending upon the size of the jurisdiction, the department may be manned by one harried official who performs all of the departmental jobs, or by twenty people or more, each of whom spends his day performing a specific duty. Building inspectors are like umpires. It is their job to make sure that things are done by the rules. Building inspectors are often disliked and easy to blame when things don’t go our way, and they can be next to impossible to argue with. That does not mean that inspectors are bad people, usually. Oh sure, you come across a jerk once in a while. But you can run into jerks in all lines of work. A few inspectors, none that I’ve known, are crooks. Periodically an investigative reporter will expose a building inspector, usually in a metropolitan area, that will allow the code to be short cut in exchange for a bribe. It makes great reading, but it doesn’t happen very often. Inspectors can be defensive and abrasive when their judgment is questioned or their authority is challenged. Inspectors can also be very helpful and easy to get along with. What all this means is that inspectors are human just like the rest of us. So, big deal. Who cares, anyway? If you consider getting along with somebody that can shut down your dream home project as having any importance, you do. Just as an umpire can toss a Vaseline ball-throwing pitcher out of a baseball game, an inspector can stop the construction of a house until a code violation is corrected. Rapport Now, granted, a construction stoppage is extreme. It is usually only resorted to when an inspector thinks the builder is repeatedly ignoring the code (either out of deceit or ignorance), not cooperating with orders to correct violations, making unkind remarks about his mother, or all of the above. How do you make sure that contractor / inspector relations stay normalized and never reach the work stoppage point? I suggest establishing a rapport with your building inspector or inspectors and learning the basics of your city’s building code. Now establishing a rapport does not mean picking up the tab on your inspector’s new big screen. Unless your name is Vito, it’s tough to run a job from prison.



Go to your city’s building department and ask to meet the head of the department, called the building official. Explain to him that you intend to subcontract the construction of your home and that you want to follow all of the ordinances and procedures properly. Ask him what building code and other codes apply to building a home. Do this before you request any bids. Ask if you are required to have a general contractor’s license to build a personal residence. Usually, you are not. If you are required to have a general contractor’s license, ask what the requirements are. If you only have to pay fifty dollars, get licensed. However, if you are required to be licensed, then you will probably have to be bonded and insured to certain limits. This is more hassle than you need. When it comes time to get a permit, ask your framing carpenter, who should be licensed as a general contractor anyway, to take the permit out in his name. He shouldn’t fuss about it, especially if you told him it was a condition of the job when you requested his bid. Ask the building official what the permit fees are and what the permit procedure is. Take notes. He will be impressed by your thoroughness and good notes beat a lousy memory by a ton. Code Book You will need a code book. Your city library probably has a current copy which should get you by up to the point of permit application. However, if you are going to build, you will need a code book of your own, if for no other reason than to defend yourself. You should be able to purchase one at the building department; and if not, the building department can tell you where to order a copy. Show the building official that you want to understand the building code by asking him to write down the chapters and sections of the code book that apply primarily to single family dwellings. Thank the building official for his time and trouble. Tell him you will study the code book and be back. Read those sections slowly and carefully. Read them again, more slowly and more carefully. Write down whatever questions you have and try to relate them to your house plans. Remember the schoolteacher that told you there are no dumb questions? If it is a question to you, it is important. At least as far as building codes are concerned, she was right. About twenty minutes or less into your first code reading session, you are going to realize that this is not a Pulitzer prize winner before you. Reading a code book is about as exciting as watching paint dry (more on that in a later chapter). As tough as it is, you still need a basic understanding of the code. The building official, inspectors and plan reviewers can help you but you’ve got to show them that you are trying. You do that by asking questions.



After you cannot make yourself read another sub-paragraph, go back to your new friends at the building department. With plans in hand, ask the building official your code questions. At this point he may suggest a preliminary plan review. Take him up on it. If he does not suggest a preliminary plan review, ask him if one would be possible. Plan Review A plan review is the process of studying your plans for code violations. An example of a violation that might show up under review would be a foundation footing that was not drawn to be placed deep enough into the ground. That violation and any others would be noted and would have to be corrected on the plans before a building permit could be issued. Plan reviews usually are a part of the permit process and are covered by the permit fees. However, preliminary reviews may not be covered by the permit fees and may constitute an additional charge. Even if you are charged, a little money spent on a preliminary plan review will save you both time and money. You will have your draftsman or architect correct your plans after the review, which he should do for free. Time will be saved because bids will not be taken on plans that do not pass the code and then have to be taken a second time on corrected plans. Money will be saved by having a plan that is to code. It will show your prospective subcontractors that you are serious about the project. When a subcontractor believes that a job is going to be built, in contrast to a price fishing expedition, he will give his best price. On a normal home, a two thousand square foot ranch style or multi-level as an example, house plan code violations should not amount to much. Regardless of the violation or its significance, ask the plan reviewer to cite the section of the code book that was violated. Reading the section violated will give you a better understanding of the code and also show the plan reviewer that you are paying attention. A plan reviewer or building inspector can misinterpret the code. He also does not have the right to require more of you than the code requires. It is not common for the building department staff to make a mistake, but it is not unheard of either. Plan reviews are fairly straightforward affairs. However, there is a lot to learn and understand in over seven hundred pages of code book. Disagreements If you think a reviewer or inspector is in error, speak to him tactfully, and if possible, out of earshot of any co-workers or bystanders. Nobody likes to be shown up. Do not make him defensive and do not get defensive yourself. Explain your interpretation. Unlike umpires, reviewers and inspectors will change their minds. However, if he does not and he cannot convince you that he is correct, then you do have other options.



First, let me offer this caution. Your reviewer or inspector is probably right. He does this for a living. Even if he is not right, if what he asks you to do is not a hardship, it is worth doing just to keep the peace. Do not make this a matter of principal. You probably cannot afford it. Whatever happens, do not alienate your reviewer or inspector. An alienated reviewer or inspector will haunt you to the job’s end. Still not convinced? Ask for a meeting with the staff member with whom you are at odds and the department head. Cite the code and explain why what you want to do is safer or stronger. Do not use cheaper or easier. As with your first attempt, stay composed and do not make the staff and department head your adversary. If you do not get what you want now, stop here, unless it puts the project in jeopardy or at the least costs serious money. You be the judge of serious. Then ask the department head what the appeals process is and make application at your own risk. The danger of an appeal at the plan review stage is this: You have the whole job ahead of you and it creates the potential for a good deal of future head butting. Also, compliance changes are much easier to make while the home is still on paper. Once you begin building and a code standoff occurs, changes are now much harder and more expensive to make. After construction begins, the risk of upsetting the building department may be worth it. But again, only if it involves serious money. Once your plan review is complete and you have a corrected set of plans, have the extra five complete sets and six floor plans that we discussed in Chapter 1 made up. Good contractors comply with the local building code even when building outside of a building department’s jurisdiction. A home that meets a building code is stronger and safer than a home that does not. Be a good contractor and build a home that will comply with a building code, even without someone inspecting your work. Summary In summary, follow the directions in this chapter and you should have very little building department troubles. A well-built, well-thought-out home will meet virtually all code requirements anyway. Learn the basics of the building code that applies to single-family dwellings and do your best to establish and maintain a rapport with the building department.



Chapter 3: Financing Two forms of financing are involved when building a home. Interim or temporary financing, often times called the construction loan, is used to pay the bills during the construction period. Material suppliers and subcontractors expect to be paid shortly after they deliver material or perform services. Most of us do not have the cash that these bills require lying around collecting dust at the bank. To satisfy these obligations, the bill paying money is usually borrowed. Once construction is complete and the bills are paid, it’s time to borrow the permanent financing or what most people call the home loan. Although the interim financing and the permanent financing are different loans, they are related. Often times both loans are made by the same lender. The permanent financing pays off the interim financing so you must either demonstrate an ability to repay the interim financing separately, or qualify for the permanent financing at the time the interim financing is borrowed. Restated, either offer the lender enough security to loan you the interim money on its own merit, or arrange for both the interim and permanent financing at the same time. Lenders intimidate some people. Don’t let them intimidate you. Chances are they are no smarter than you are. They do know more about lending money than you do. A tire repairman knows more about fixing flat tires than you do, but that doesn’t make you nervous, does it? You may run into a lender that is not too thrilled with the thought of you being your own contractor. “I don’t lend money to amateur builders,” he says, or at least thinks. Preparation The best way to ease your fear of the lender, and the lender’s fear of you, is with adequate preparation and explanation. Most fears are fostered by the unknown. What questions will the lender ask? Do I make enough money? What does this ________ (fill in your occupation) know about building a house?



Don’t misunderstand. Lenders want to make loans, or at least loans that are paid back. It makes them money. However, the last thing he wants, especially if it is incomplete, is your house back in his lap. Foreclosure, taking the property for non-payment, is painful for both the borrower and lender. Qualify Yourself How do you know what you can borrow and comfortably pay back? Qualify yourself. Qualify is loan business talk for meeting the criteria or formula that lenders have determined will ensure repayment. Mortgage lenders will usually require that your housing expenses do not exceed 28% of your gross income. Example: If your total family gross income is $6,000 a month, your housing expenses could not exceed 28% of $6,000, or $1680, per month. Housing expenses include:

Mortgage payment (principal and interest) Utility bills Homeowner’s association dues One month’s hazard insurance One month’s real estate taxes (including special assessments) One month’s flood insurance

How much can I borrow? Let’s do the math. Remember those story problems you hated in school? This is why you learned them. Let’s say your total projected utility bills (gas, electricity, water, sewer, telephone, cable TV, and trash service) average $400 a month. Figure the average by taking the annual amount divided by twelve. You don’t have a homeowner’s association and don’t need flood insurance because you are building on high ground (always a good idea). One month’s projected hazard insurance will cost $90. One month’s projected real estate taxes will cost $200 a month. Subtracting utility bills ($400), hazard insurance ($90), and taxes ($200) from $1680 (your total allowable housing expenses) leaves $990 for a mortgage payment. Monthly gross income $6.000 Maximum percent allowable for housing expense . 28 Amount available for housing expense $1,680 Utility bill: Gas $105 Electricity $150 Water $ 30 Sewer $ 15 Telephone $ 50 Cable TV $ 35 Trash $ 15



Total $400 - $ 400 Monthly hazard insurance - $ 90 Monthly real estate taxes - $ 200 Maximum allowed for mortgage payment $ 990 If your loan is for 15 years and you borrow at 7.5% interest, you can borrow $106,000 and pay it off with a $990 payment per month. If your loan is for 30 years at 7.5% interest, $990 a month will pay off a $141,000 loan. If you borrow for 30 years, you can borrow $35,000 more for the same payment. But you get to pay $990 a month for an extra 15 years, which means you are paying $178,000 for the privilege of borrowing that $35,000. One thing that you need to realize is that even though you can qualify to pay back a $106,000 loan (15 years) or a $141,000 loan (30 years) the cost of your new home will have to be greater than that before you can borrow the full $106,000 or $141,000. Mortgage payment calculators can be found on the internet at mortgage lender websites such as www.ditech.com and www.eloan.com, or in chart form in Appendix III at the end of this book. If your cost is $106,000 and your loan is $106,000 you would have a zero down payment loan. Commercial lenders are reluctant to make loans on homes where the borrower has not invested any of his own money. Lenders like to know that you have a monetary stake in the property. That way, they figure, you are less likely to skip off to Rio and forget to mail the mortgage payments. Lenders will usually loan up to 90% and sometimes 95% of cost or appraised value, whichever is less, on permanent home loans and 75% of cost or appraised value, whichever is less, on construction loans. The part of the cost that you are not loaned is your down payment. That is the standard policy. Remind your lender that by being your own contractor, you are building your home for 10% to 35% less than the cost of new construction. That should be worth, if not a complete removal of the down payment, at least a reduction. The second major qualifying formula that you must meet is that the sum of all your monthly obligations cannot exceed 36% of your gross monthly income. Monthly obligations are the monthly housing expenses mentioned above plus any installment payments you have, such as payments on revolving charge accounts, cars, or your teenager’s braces. Also included under monthly obligations is the payment of alimony and child support. This story problem is like the one you just did, except that all your monthly obligations are accounted for and you get to use 36% of your gross monthly income to pay for them.


http://www.ditech.com/

http://www.eloan.com/


It is for good reason that lenders look hard at your installment debt. Too many bass boats, garden tractors and diamond dinner rings can make short work of your house payment money. The cleaner your application is of installment debt, the more attractive it is to a lender. For that reason, if you have consumer loans that you can pay off without undue hardship, pay them off.

Charge Cards Which brings us to revolving charge accounts. Have you ever tried to read the back of your charge account statement? It explains how your finance charge is calculated. Take two aspirin before you begin, you’ll have a head start on the ensuing headache. Buried beneath the definitions of “Average Daily Balance of Previous Billing Cycle Purchases,” “Average Daily Balance of Old Purchases,” and “Average Daily Balance of Cash Advances,” and the part they play in determining the finance charge, which are two words that mean interest, is the realization that I am not supposed to understand how my finance charge was calculated. Because if I and any other marginally intelligent person did understand these finance charges, we would not let one Jefferson nickel in “New Balance” go unpaid. To illustrate is a true story (the names have been withheld to protect the guilty and impolite). I have a bank charge card and use it to charge car expenses and other business necessities. It gives me a single monthly print out itemizing my purchases for my records. It is light and doesn’t make my pocket bulge. It is accepted nearly everywhere I go. In short, it does everything that every bankcard hawker on television and telephone says it will. What I wasn’t told, because the guys on TV and telephone probably don’t understand the back of their statements either, is what it would cost me if I did not completely pay off my charge card “New Balance.” I even meant to pay off the “New Balance” completely, but you know about good intentions and the road to you-know-where. The “New Balance,” is the sum of any old balance, finance charges and purchases made during the new billing period. Every thing you owe added together, is the “New Balance.” My “New Balance” had always been only the total of my purchases during the new billing period, because I always paid off my “New Balance” in full. Not because I’m so smart, I just like to stay current. Some time ago, five days before my due date, I mistakenly wrote and mailed my payment check for $151.30, $6.20 less than the “New Balance” amount of $157.50. My next month’s statement showed a finance charge of $2.41. After checking to see if I paid on time, I discovered my error. So, let’s see what that $2.41 finance charge amounts to in real live interest. It doesn’t sound too bad, does it? Because I shorted my check by $6.20 I had the use of that money, but only that $6.20, for one month. Walking around with an extra $6.20 in my



pocket cost me $2.41. Dividing $2.41 into $6.20 equals 38.87% for one month’s interest. Multiplied by twelve months in a year equals an annual interest rate of over 466%. Seems rather steep doesn’t it? I’m glad I only owed $157.50 instead of $1575 or more. So what happened to that 18% yearly interest rate, no small amount itself, which is printed on the front of the statement? In fairness, the bankcard company has an explanation. Even if it is offered by an anonymous and bored voice on the other end of a toll free number. “Interest accrues and compounds as of day one,” Ms. Anonymous monotones offering no further explanation. Upon additional probing, she allows that, unless I pay off the “New Balance” in full, interest accrues and compounds on all purchases as of the date of posting at the rate of 1.5% per month. So the six tanks of unleaded that I charged, always before at no interest, started the interest meter ticking as soon as the gas pump meter quit. Had I paid my tab in full, all would have been forgiven. That’s nice, but who asked me anyway? Too many people ring up outstanding charge card balances, not through mistaken check writing, but by purposely tapping what they believe to be an easy line of credit. It may be easy, no loan application or credit checks, but at 18% interest, or in my case much more, it’s sure not cheap. And most importantly, it can blow the loan on your home. But you say, “even including the ‘easy pay plan’ on my charge account, my monthly obligations are still 36% of my gross income.” That makes you a marginal loan. All lenders have a disclaimer in their loan guidelines that goes something like this, “Because each applicant is different, each application will be judged on its own merits.” That may be the crack through which your application falls. To most lenders, large outstanding charge card balances (four figures), demonstrate a lack of fiscal restraint. Remember what I said about fear being fostered by the unknown. If you are carrying a large unpaid balance now, how does your lender know that after you start making these new and usually larger house payments, that your unpaid charge card balance won’t just increase. And if it increases much more, it is going to put your house payment in jeopardy. If these are his fears, he won’t make the loan. Do not give your lender the opportunity for fear. Pay off your charge card balances before you have to list them on your loan application, even if you have to have a garage sale to do it.

Selecting A Lender Now that you have a good idea of what you can borrow and pay back, it is time to visit with some lenders. If you have a home loan now and you and your lender still like each



other, as long as his interest rates and loan fees are competitive, there is no reason to change. If you do not have a favorite lender, talk to Realtors you know and ask them who they recommend and why. Talk to friends who have home loans to see if they are satisfied with their lender. Compare interest rates and loan fees of the recommended lenders and narrow your choices down to three. Rank them in order of preference. Make an appointment with lender number one. Question him on his percentages for the two major qualifying criteria for house payments that we have discussed. Verify his interest rates, loan fees and down payment requirements. If he answers those questions to your satisfaction, show him your house plans. Explain that you would like to pre-qualify for the maximum construction loan and permanent home loan for which you are eligible. That does not mean you will borrow that much money in the end, but it can give you a cushion if your home costs more than you have estimated. Pre-Qualifying For Your Loan It is very important to complete this part of the planning process before you begin talking to subcontractors. It is inexcusable for an owner contractor to take the time (his bidder’s and his own) to determine the price of his new home, find that it meets his original estimate and then be denied the loan because he could not qualify. When you talk to subcontractors, know what you can afford to spend on your home and know what you can borrow from a lender. Your lender’s reaction to your pre-qualifying request will be a good indication of his interest in doing business with you. He certainly will ask questions about your ability to conduct and supervise the project. If he asks no questions, his mind is probably already made up to deny you the loan. Explain to your lender that before it is time to finalize the construction loan, you will have a site plan, detailed cost estimates, material and labor specifications and a construction schedule to include with the plans. Ask him if there is any other information that he needs at the time of closing. As long as you deliver on your promises, this straightforward approach should assuage any of your lender’s fears about your abilities. If you are meeting resistance at this point, ask your lender politely what additional information you can give him to help him evaluate your loan request. Hopefully he will request information that you can provide. However, he may not be willing to grant your loan. Don’t take it personally. It probably has nothing to do with you. He could have had a bad and costly experience with an owner-contractor in the past and vowed never to do it again. Or more likely, he heard second or third hand about someone else’s perceived horror story.



Don’t worry, chances are you will find a receptive lender on the first try, but if not, give it another shot. One will come soon. Once you have settled on a lender and you begin the pre-qualifying process, you will be asked to fill out a mortgage pre-qualification form. It’s usually only one page and asks for employment and income information, as well as the projected monthly expenses of your new home and your other monthly obligations. Sound familiar? Also the form asks for your assets, which is information needed to determine your down payment ability. You and your lender will have several meetings before your home is completed. As we have discussed, there is the first, or introductory, meeting. You then will meet after your bids are taken and your building price is defined for finalizing the construction loan. You may meet several times while building to report to your lender on the construction progress and to pick up intermediate draws against the loan. Your last meeting will be to pay off your construction loan and to finalize or close your permanent home loan. Other Loan Application Information Your lender will want to verify your employment with your employer. He will need proof of earnings, such as your last check stub or federal income tax W-2 form. If you have income derived from commissions, rent or self-employment, you will need to provide your last two federal income tax returns. And if you are self-employed, you may also be required to provide income statements and balance sheets on your business. If your credit history is less than sterling, you should provide letters of explanation concerning the problem (bankruptcy, judgments, collections, slow pay, etc.) and outline what you have done or are doing to correct the problem. Confess your poor credit history up front, before any credit checks are done. Your honesty may help convince your lender that your are overcoming your bad bill paying habits. Never try to fool a lender or withhold credit information from him. It is a certainty that he will find out whether you are paying your bills or not and if you have not been honest with him, your chances of qualifying for a loan are less than bad. Lending is an exercise in trust. A lender must think you are trustworthy to loan you money. Freddie Mac You can find a wealth of information on home loans at www.freddiemac.com. Freddie Mac is short for the Federal Home Loan Mortgage Corporation. Calculators for determining what can be borrowed and worksheets for making budgets, financial statements and mortgage qualifying tools can all be found there.


http://www.freddiemac.com/


Summary In summary, check around to determine the aggressive lenders in your area. Prepare for your lender by qualifying yourself. Ask your lender to pre-qualify your loan request so you can verify your budget assumptions. Improve your odds of getting the loan approved by paying off all charge card balances and any installment loans possible. Supply your lender with plans, specifications, a construction schedule and any other information he requests to prove to him that you are a capable general contractor. Always remember, regardless of how much money you borrow, how easy it is to borrow, or from whom you borrow, you must still pay it back. And the paying back is your job, not your lenders.



SECTION II: PRE-CONSTRUCTION



Chapter 4: Bidding The price of your home depends on the subcontractor and material supplier bids that you receive. After gathering your subcontractor bids, you will select the best bid from each category. The total of those best bids will be the price of your home. If you are like me, and every other person that I have done business with, you want the best material and workmanship for the lowest price possible. That should be your goal in taking bids. Does that mean that the lowest price for a given trade is the best price and the price that you should use? Only if you are assured that the low bid is offering you the same thing, in terms of quantity and quality, that the other bids of the same trade are offering you. Comparing bids from the same trade, that offer different methods and materials to perform the same work, is one of the toughest jobs for even an experienced contractor. It is also one of the largest sources of animosity between a general contractor and an unsuccessful bidder. The subcontractor’s wail of, “I could have been the low bidder had I bid the same stuff he did. You don’t have to pay much for junk,” echoes through a contractor’s office days after a subcontract is awarded. As a general contractor you will quickly learn that many times the definition of junk, as defined by a subcontractor, is any product or workmanship of a competitor. Doesn’t that sound cynical? It does and I hate it, but believe me, rare is the subcontractor or general contractor, for that matter, who does not find some kind of fault with the work of a competitor. With that in mind, when a subcontractor is discussing a competing subcontractor, always take what is said with at least one grain of salt. Listen to what is said and if necessary check out the information with an unbiased source, such as a building inspector or previous customers of the alleged offender.



In the construction business, attempting to compare unlike bids is referred to as comparing apples to oranges. They both may be good, but they are not the same product, they do not cost the same and any comparison of the two is futile. The apples/oranges controversy can only be completely eliminated from a construction project by rigid specifications that allow no deviation whatsoever for material or method. Unless you go to the considerable expense of hiring an architect to draw a set of plans and write a complete specification book outlining in detail the brand name and model number of every piece and part to be used on the job, as well as step-by-step instructions on the installation of each piece and part, (and I have yet to see a specification book with that much detail) you will still have to do some comparing of unlike bids. Specifications However, by eliminating as many variables in each bid as possible, we can reduce those comparisons to a painless few. When that is done, everyone benefits. As contractor and owner you have an easier job of picking the best job at the best price. The subcontractors can figure their work without trying to guess what they think you want. That normally equates to a better price. And after a subcontract is awarded, the unsuccessful bidders know that their bid was evaluated fairly. If you would like a sample set of specifications that you can use to get accurate and consistent bids, please email me at [email protected] and I will email you a copy of this bonus report. Price Discounts Your home will be made up of a good deal of material, everything from lumber and nails to wallpaper and paint. If you, rather than your subcontractors, purchase the material, you are entitled to the same contractor’s discount as any other general contractor. That is easily said, but how do you make sure that you are receiving that discount? Take a complete material list to the vendor of that material and ask him for his best price. Tell him that he is bidding against others for the sale and that if he is the successful bidder you will purchase the entire list from him. Putting the vendor in a competitive bidding situation will ensure that you get his best price, which includes any contractor’s discounts. Have the vendor include item prices, as well as totals, not so that you can pick and choose items between bidders, but so that you will have an agreed upon price for items that you may need larger quantities of once construction gets underway. Ask each vendor if he offers discounts for paying cash at the time of purchase, or discounts for paying the balance on an account within a certain time. Regardless of their nature, by asking all of your questions when requesting the bid, you are more likely to get the answers you want than after the contract is awarded and the material is delivered.


mailto:[email protected]?subject=Bonus%20report


This procedure will work for all material bids. Each material list will be discussed more specifically under the various types of work where they occur. Lender Endorsement There are two more things that you can do to ensure that your bids, whether for material, labor or both, will be the best possible. First, demonstrate that you are serious about the project and have the ability to pay your bills by having an endorsement from your lender in the form of a letter stating that you have been approved for a loan of $_______. A subcontractor who knows he will be paid on time will not add interest to his bid to cover late payments, thus increasing your price. Bid Confidentiality Secondly, tell your bidders that this is not an auction. They have only one chance to be the low bidder. For the work and time that they spend preparing their bids, you will give them the courtesy of confidentiality. No one will see another’s bid and no one will be given the opportunity to lower his bid, once presented. Make your bidder’s believe it and then do it. Your bidders will respect you for your candidness. All too often bids of this type turn into contests of “whatever old Joe will do it for, I’ll do it for $100 less.” That is not bidding. Knowing that they will not be subjected to an auction, your bidders should give you their best price first. Sales Tax Regardless of the bids involved, sales tax and any other applicable charges should be included. Make it a common practice to ask every bidder if his bid includes sales tax and any other applicable taxes or charges. You are the end user of whatever goods and services you are purchasing and should pay sales tax at the point of the sale. If your tradesman and vendors do not charge you sales tax, you are obligated to pay it directly to the state, complying with all the regulations and form filing that it entails. You do not need the fuss. Pay sales tax to your tradesman and vendors and let them pay the state. Surprises There’s nothing like surprises on Christmas, birthdays and construction projects. Christmas and birthday surprises are laughed about and cherished. Construction surprises are wept over and mourned. When a contractor is surprised, it is always bad. The carpet price included the carpet, but not the pad. The heating and air conditioning quote included all of the labor and



material to perform the work, except the exterior concrete slab that the compressor unit sits on. When these surprises arise on the job, get out your checkbook. When situations like the above rear their ugly heads, the subcontractors involved usually try to excuse themselves from guilt by whining, “you only asked me for a carpet price,” or, “air conditioner slabs are always poured by the concrete contractor.” And of course the concrete contractor did not have the price included in his bid because he was not asked to quote the compressor slab. The specifications should prevent most surprises; however asking the following questions of each and every bidder should eliminate them completely.

Question 1: Have you included all the material and labor necessary for the total completion of this work? If not, what is not included.

Question 2: What work by other trades must be done before you can perform your work?

Question 3: What work by other trades must be done after your work is completed, before this part of the work will be completely finished?

Write the answers down. As the saying goes, the faintest ink is brighter than the best memory. Choosing Bidders Just as in picking house plans, dealing with the building department and securing financing, preparation is the key to selecting good bidders. Going to the yellow pages and picking the five largest ads from each trade as your prospective bidders does not tell you who pays their bills on time, who does quality work and who finishes their jobs on schedule. It only tells you who has the largest yellow page advertising budget. Remember the rapport that you established at the building department? Instead of asking the staff who they would recommend, as they may not be allowed to make recommendations, ask individual staff members if they were building a home, which tradesmen would they hire and why, which material vendors would they buy from and why. Asking in that manner may skirt the delicate issue of ‘no recommendations.’ Ask those questions about every tradesman from the concrete workers to the roofers and everyone in between. Ask those same questions of your lender, Realtor, insurance agent, staff of your local Chamber of Commerce, friends who have built a home recently and anybody else whose opinion you value. Don’t forget prayer. Seriously, for most people their home is their biggest investment. Your bidders list is an important decision. If you pray about other important things in your life, add this to your list. If you don’t pray about important things in your life, this is a good time to start.



Choose the three most highly recommended subcontractors and vendors from each trade and request their bid. If you have a tie for third place, add the fourth place or fourth and firth place bidders, but remember, every bid requires an evaluation and you have a lot of bids to take. Do not take bids from everybody in sight just because your ego gets a boost every time you lay your plans on a bidder’s drawing board. Determine that your bidders are qualified to do the job before you talk to them, or you will waste their time and yours. Conventional Materials Do not be a building pioneer. Your job will be easier for your subcontractors to perform, which translates into a job that is easier for you to manage, and cheaper as well, if you use materials and building practices that are customarily used in your area. Concrete slab floors are popular in many southern states but avoided like a rabid dog in northern areas of the country. Without going into why slab floors for homes are not customary in the north, I would not recommend that you build one there solely because your subcontractors will not be familiar with the process. You will be busy enough with all of the normal duties of a general contractor without taking on the added job of re-educating your workmen. Building Codes Remind each subcontractor that they are responsible for satisfying the building code and any and all companion codes within the scope of their work If an item listed in the specifications or drawn on the plans does not meet the code, it is their duty to bring it to your attention at the time of the bid. Each subcontractor is also responsible for calling for inspections from the building department when they are required. Once they have bid their work to you, they are agreeing that their work will meet all of the applicable codes. If a code violation occurs during the performance of their work, even if the violation was due to an error in the plans or specifications, the subcontractor will correct the violation with no charge to you, the general contractor. Make that clear to all subcontractors. Written Bids Only accept written and signed bids. There also should be language on the bid stating that the bidder agrees to provide all labor and material to do the following work with a detailed description of the work and material. Require specifics. The more that is written down now, the less that is left up to interpretation later. Office supply stores carry forms designed for bidding work, if your bidders don’t have their own. Regardless, make your bidders write it down in detail and sign it. Court Of Law



The reason for requiring written bids is to eliminate any argument as to what was bid. Hopefully, your investigation has yielded only honest bidders. However, if you have any question as to whether your subcontractor’s bids will be bound by law, then have your attorney write language that will bind your bidders and stand up in court. Have them include that language in their bids. Change Orders Change orders authorize a change in the original bid, in scope of work and price. Never make a change or addition to the work on your home without a written change order specifying the work to be performed and the price. Change orders before the work is performed eliminate arguments afterward. Summary Work hard at identifying subcontractors that are accomplished and honest. If you have any question about the integrity of a tradesman or supplier, do not ask them for a bid. Make certain that all bidders understand that they are responsible for satisfying all code requirements. Treat your bidders as fairly as you expect them to treat you. Honor their bids with confidentiality. It is an excellent way to foster trust and respect. Avoid surprises with good preparation. Remember, the subcontractors chosen from your bidders list will build your home. Make sure it is a good one.



Chapter 5: Soliciting Bids

As has been previously stated, this is a hire-it-yourself rather than a do-it-yourself book. However, to intelligently solicit bids you should have a basic understanding of how the pieces and parts of a home go together. The discussions of this chapter should aid in that pursuit. Another invaluable resource for a fundamental understanding of home construction is an illustrated construction manual. A classic is “Building Construction Illustrated,” by Francis D.K. Ching and Cassandra Adams. It lists for $40.00 but I ordered my copy online for under $30.00. It is an excellent investment at either price. You should not attempt this job without this manual or one similar to it. The bids required to build your home follow. Construction Staking The perimeter of your home should be located on your lot with stakes. This is called construction staking. Your foundation contractor can do the job, as long as you have a large lot and proximity to boundary lines is not important. However, if the distance between your home and lot boundary lines is critical, hire a registered land surveyor to stake it out. Sure, it will cost you some money, but how much do you suppose it will cost if one corner of your fireplace is mistakenly set on your neighbor’s property? Your lender may require a boundary survey of your lot at the time of your loan closing, if so, for a few more bucks the surveyor will stake out the building lines as well. Take bids on boundary surveying and construction staking from the registered land surveyors in your area. Excavation and Backfill



Basement and crawl space holes as well as foundation footings will require some type of excavation. Basement and crawl space holes are usually dug with a front-end loader (a tractor with a large scoop on the front), a bulldozer or a very large backhoe. Footings for a garage or a home on a slab are dug with a backhoe. Once foundation and basement walls have cured for seven days and been waterproofed, the hole on the outside of the wall should be filled with dirt. This work is called backfilling. The same contractor that did the excavating does it. When excavating for a basement or a crawl space, have your excavator strip the top six inches of topsoil and stockpile it apart from the remaining excavated soil. After the foundation walls have been backfilled, the earth has settled, and the remaining lot has been brought to within a few inches of the desired elevation, distribute the topsoil. Topsoil distribution should not be done until the home construction is completed. Leave the yard elevation, after the topsoil has been placed, about two inches below any adjacent concrete slabs. This two-inch elevation difference will provide space for the building of turf, without the turf growing above the top of the slab. It makes lawn edging much easier. Your foundation wall bidders are the best source for good excavation bidders. Footings Footings are the base of foundation walls. They are poured from concrete before the foundation walls are built. Since the total weight of your home will rest on the footings, and you would prefer that your floors remain level, your doors plumb and your walls crack-free even after years of living, your footings must be sized properly and built on stable soil. Verify with your building official and foundation bidders what footing size is adequate for the normal soils found in your area. If there is a question of size, always error on the side of strength. Footings must be built on stable soil, which is soil that will not settle, heave or move. The best assurance of building footings on stable soil is to build on virgin soil. Virgin soil is the soil that God put there, not soil trucked in by a developer to raise the elevation of the lot. Virgin soil has been compacted and settled by the elements over millions of years. It will not have a landfill in its past, which means that you will not be building over old car tires, sofas and washing machines, which never compact properly. Even if your lot is elevated by fill dirt, you can still build your footings on virgin soil. Just excavate beneath the fill dirt into the original soil and place your footings there. A



properly sized footing placed on stable virgin soil will ensure that your home has a rock solid base. There are instances where even virgin soil can be unstable (sand) and require additional measures to provide a solid base. Again, always consult the building official and foundation contractors on what your footing specifications should be. They should understand the soils in your area. If you are still in doubt, consult a structural engineer. Correcting inadequate footings after your home is completed is extremely difficult and tremendously expensive. Foundation Walls Foundation walls are built on top of the footings and can be built from poured concrete or be constructed of concrete blocks. When concrete blocks are used as foundation walls, the block cavities must be filled with concrete. Filling the blocks helps tie them together, increasing their strength and helping to prevent the transfer of moisture from the ground through the blocks to beneath the home. All foundation and basement walls should be waterproofed by the application of an impervious material on the outside of the wall. Since waterproofing methods can vary across the country, I suggest that you quiz the people on your foundation contractors list. They know what the proven waterproofing methods are in your area, as well as the waterproofing contractors who best apply those methods.

Concrete blocks work well for a foundation wall with a crawl space. However, even with adequate waterproofing, block walls are more susceptible to moisture problems than poured concrete walls. A poured concrete wall is seamless, a concrete block wall has a seam in the form of a mortar joint every sixteen inches horizontally and every eight inches vertically. Every seam offers the opportunity of a crack. Every crack can become a leak. Good waterproofing should prevent the cracks from leaking. But unless ready mixed concrete is unusually expensive where you live and there is a considerable price difference between poured walls and block walls, why worry about leaks? Pour concrete. Ready mixed concrete is measured in cubic yards, commonly referred to simply as yards. The strength of the concrete is determined by the mix. Concrete is made from Portland cement, aggregate and water. Concrete mixtures are labeled by either the number of sacks of cement in a cubic yard along with the type of aggregate used, or by the tested strength in pounds per square inch (PSI) of the mix. Example: a mix that is called a 5 sack sand mix is a mixture of five sacks of Portland cement, sand (the aggregate) and water for every cubic yard of concrete made. To add strength to the mix, increase the number of sacks of cement and increase the percentage of crushed rock in each yard. A six sack-20% rock mix has six sacks of cement and twenty percent of the aggregate (the sand or rock) is crushed rock.



As mentioned, concrete mix can also be identified by its tested strength. Concrete is tested by filling a test cylinder with the concrete mix to be tested. The cylinder is cured for twenty-eight days and then broken by a press in a testing laboratory. The pressure exerted by the press on the cylinder at the time of breaking is the tested strength of the mix. A particular mixture that will consistently test above a certain pressure will be identified as that strength of concrete. Concrete will test, depending on the mix, anywhere from 2,000 PSI to 4,500 PSI and above. A good mix will range from 3,500 to 4,000 PSI. Even when a ready mixed concrete plant does not identify a mix by its strength on a price list, the strengths for each mix are known, and the plant will give you those strengths when asked. The strength of concrete is also affected by the amount of water it is mixed with. Concrete that runs from a ready mixed truck’s chute, like pea soup from a saucepan, is too wet. Its strength will also be lower than the same mix that is poured with a thicker consistency. Policing the amount of water added to a concrete mixture is tough, not so much the water that is added at the plant, but the water added on the job site. All ready mixed trucks carry a water tank on board. If the mix is so thick that it will not run down the chute, water added on the job site will help it pour more easily. The trick is to not add too much. Water is often added to concrete to ease the strain on a concrete worker’s back, at the expense of concrete strength. You see, the wetter the concrete, the more easily it flows, and the less effort it takes to move it around. No problem, you say. You will instruct your workmen to pour your foundation walls with concrete so dry that it raises dust when it falls from the chute. That’s fine; you will have strong walls, what there is of them. When concrete that is too dry is poured into standing forms, it inconsistently fills the forms, creating voids. In construction talk, those voids are called honeycombs because that is what they look like. Honeycombed walls look terrible! But worse than that, if the void of the honeycomb is two-inches deep, on an eight-inch thick wall that is a twenty-five percent reduction in wall thickness. When you lose thickness, you lose strength. Puddling, which is jabbing up and down into the concrete with a long stick, helps prevent honeycomb and should be done regardless of the consistency of the mix. Enough water in the mix to consistently fill the forms with concrete, without so much water that the mix turns to soup, is the delicate balance that you strive for. How do you make sure that your foundation contractor will get it right? Look at his work. The performance of good work in the past is the best indication of the performance of good work in the future. The names on your foundation contractors bidder list will consist of recommendations given you by the building department, area



ready mixed concrete plants, area iron and metal yards, and your normal sources. Iron and metal yards are where concrete reinforcing bars (rebar) are sold. Look at the foundation walls of prospective bidders. Try to get to a job site before the foundation or basement walls have been backfilled. Ready mixed plants can give you those locations. Check for wall straightness by standing at one end of a wall and sighting down its length. Check for honeycomb. Check for cold joints. A cold joint is not a sleazy bar with a furnace problem, but is a seam in the wall that is created when one batch of concrete sets up (begins getting hard) separately from the concrete poured immediately adjacent to it. Because of the seam or joints, the wall is not built from a solid mass of concrete from top to bottom. Therefore, it is structurally weakened. A wall with a cold joint will show a crooked line, usually somewhere between horizontal and diagonal, separating the batches. That line is a cold joint. A straight line, either horizontal or vertical is not a cold joint, but probably a form mark, which has no affect on wall strength. Cold joints can be caused by inadequate puddling, which fails to blend the two batches at their intersection. Cold joints can also be caused by factors over which workmen at the job site have no control. A flat tire on a ready mixed truck en route to the job site causes a delay in pouring. That delay allows the previously poured batch to begin setting up before the batch that is to be poured on top of it. Since the first batch has begun to set up or harden, the second batch will not mix with it, which creates a cold joint. When evaluating contractors, one cold joint on one job is probably not a big deal, except to the owner of the home where it occurred. However, if after looking at two or three jobs you continue to see cold joints, you’ll know a pattern is developing. This contractor is either doing poor work or he is getting some sorry service from the ready mixed plant. Sorry service is usually non-discriminating. If other contractors on your list use the same ready mixed plant as the cold joint specialist above, and do not have the same affinity for cold joints that he does, you can bet it is the contractor’s fault and not the ready mixed plant. You want your prospective bidders to be the builders of straight, honeycomb and cold joint-free concrete walls. Once you have picked your top three choices for foundation contractor, take them your plans and ask them to bid all of your footing, foundation and basement walls, including any porch walls and piers. Piers are either square or cylindrical chunks of concrete that are poured in place and used to support beams (either wood or iron) that joists bear If your home needs piers, your foundation plan will identify them.



Buying Material You can ask your bidders to price you their labor only, and you can figure and pay separately for the material. By paying for the material yourself, you are going to save some money. However, on hard to figure quantities with many different types of materials, unless you are a skilled estimator, what you save by eliminating the subcontractor’s material mark-up you can easily spend in mistakes and stress. Plan on your subcontractors including the price of all material necessary to the completion of their work, sales tax included. Exceptions might be large, expensive, easy-to-price items like kitchen and bathroom cabinets and countertops, doors and trim, windows and carpet. Here is another precaution on buying material for a third party to install. I have never heard a subcontractor complain about material that he was selling. However, that same material invariably has something wrong with it when another provides it. Example: the first thing you hear when you walk on the job is, “We had to wait thirty minutes between pours with that Unready Ready Mixed Company you hired. I can’t be responsible for any cold joints.” The wait may have been only ten minutes; you have no way of knowing unless you were there when the concrete was poured. But since you are paying for the concrete, a cold joint is your fault and you’ll have to fight with the ready mixed plant. If your foundation contractor sold you labor and materials, he is responsible for the cold joint regardless of its cause. It is his job to make it right and unless he enjoys publicizing his bad judgment, your foundation man will not be burdening you with the lousy job that the concrete plant he hired is doing. To summarize, as with all trades and vendors, thoroughly investigate your potential bidders. If you put a bidder on your list, make sure that you would be willing to hire him. Hiring honest, competent and helpful subcontractors is the key to this whole business. Foundation Drainage System Water that pools on top of and around basement footings can cause seepage through the basement wall footing joint. This pooling can be caused by high amounts of rainfall, or moderate amounts of rainfall in areas where the soil does not allow for proper drainage away from the basement walls. If a foundation drainage system is necessary where you live, use what is common to the area. Drainage tiles, perforated PVC pipe or a flexible large diameter hose in a bed of gravel can all be used depending on the local practices.



Concrete Slabs Driveways, sidewalks, garage and home floors, basement floors, porch floors, patios and air conditioning compressor unit slabs are all poured from concrete. In the construction business, the job of pouring concrete slabs is called flatwork. Flatwork and foundation walls may or may not be poured by the same subcontractor, depending on how specialized the trades are in your area. Often times in smaller towns, a concrete man is a concrete man, pouring everything from curb and gutter to flatwork and basement walls. In urban areas, the trades may be so specialized that one subcontractor forms the flatwork, while another pours and finishes the concrete. As a general contractor, it is advantageous to hire a subcontractor capable of doing all of your concrete work. The fewer subcontractors on the job, the fewer people you need to keep track of, and the smoother the job goes. Ideally, you would turn the construction of the entire home over to one subcontractor. Talk about smoothness. A baby’s bottom should be so smooth. Of course the problem with that type of contracting is that your lone subcontractor becomes a general contractor because he has to hire trades to perform the work that he is incapable of. To cover his responsibilities as general contractor, he will have to mark up the subcontractors’ bids. You’ve still got smoothness but because of the mark up you haven’t saved any money, which is why you bought this book in the first place. That may be taking things to the ridiculous, but the point it illustrates is this: the fewer the subcontractors the better the deal for you, as long as you are not paying a cost penalty. The price of smoothness is the cost difference between one subcontractor pouring walls and flatwork, against the price of two subcontractors doing the work. You be the judge of what it is worth. A slab is made of a specific thickness of concrete, poured over a cushion of sand. The price of a slab is determined by the labor cost to form it, pour it and finish it plus the material cost of ready mixed concrete, sand and reinforcing. In residential construction, whether you’re pouring a sidewalk, driveway, basement floor or house floor, a four-inch thickness is normally poured. Five inches is stronger and less apt to crack, but the concrete in a five-inch floor will cost you twenty percent more than the concrete in a four-inch floor and the extra strength is not really necessary. Unless you park a winch truck or something of a similar weight, a four-inch driveway and garage slab should be adequate. The movers cannot hump enough pianos into your home to put a strain on a four-inch floor. However, because soil types and concrete mixes (mainly the type of aggregate) vary, always pour the thickness that is the standard or better for your area.



Sand should be placed and leveled at the slab site. Pouring concrete over leveled sand ensures a slab of uniform thickness. Ideally the sand fill should be about three inches thick. More or less sand can be used, but with more sand, more compaction is needed to prevent the sand from settling after the slab is poured. Since sand will compress and absorb pressure, a slab with an adequate sand cushion can tolerate a slight upward movement in the earth (sub-grade) beneath it without raising the slab. However, a slab poured with little or no sand fill will rise with the very slightest upward movement of the sub-grade. The principals of pouring flatwork are the same as pouring walls. The more cement and aggregate per yard, the stronger the mix. The drier the concrete is poured, the stronger it will test. Caution your flatwork contractor about adding water on the job. Concrete that is poured too wet is the largest cause of cracks in slabs. Large slabs such as driveways, and garage, basement and home floors should be reinforced with wire mesh (remesh). Commonly on homes, 6x6-10x10 remesh is used. The 6x6-10x10 means that the wire forms six-inch squares and the wire on each side of the square has a thickness of ten-gauge. Heavier remesh is sold for paving or for heavy commercial and industrial uses. They are way too heavy, in pounds and in dollars, for residential construction. Bidders may tell you that on home slabs, remesh is a waste of money. That is correct if the remesh is allowed to lie at the bottom of the slab, thus making it effectively nonexistent. What is it reinforcing, the fill sand? Remesh must be positioned one third of the way from the top of the slab to do its job correctly, which is helping prevent small hairline cracks from opening up into large gaping cracks. The remesh lies in the sand when the concrete is poured and so it must be pulled up by hand, one-third of the way from the top of the slab. When in the correct spot, remesh holds the concrete together, thus resisting separation. Have you ever seen a basement floor with cracks so large that you feared what might crawl out of them? That is why you need remesh. The strongest of mixes poured drier than popcorn, with the remesh placed just right, will be no better than the cheapest slop if it is poured over an unstable base. An unstable base is ground that is not solid. For some reason it is still moving. Of course you would not knowingly build over a geological fault line. That ground can move in a hurry. Less dramatic, but a much more real concern, is building over a filled area that has not yet completely settled. When concrete is poured over filled ground and the ground settles beneath the slab, a void is formed. There is not support for the slab at the void, which will lead to a crack in the slab and then a settling of the slab.



Filling is the process of increasing the elevation of a tract of ground by adding soil. The best way to ensure that the ground on which you are building is stable and has settled completely is to avoid building over fill at all. However, if the surface water running off of your lot drains into your proposed home site, filling the lot now is preferred to bailing out the living room later. Fill that is placed where slabs are to be poured should be placed in lifts (a lift is a section of dirt with a specified thickness) of six inches and sufficiently compacted before the next lift is placed. Since soils vary greatly from geographic area to area, seek the advice of an experienced, reputable dirt contractor concerning the proper compaction methods. Regardless of how you compact the soil, the longer the fill sits before it is built upon, the better the chance is that it has settled completely. Rain is your greatest ally. Compact the soil well. Let it sit through a couple of frog-choking rains and it should be ready. Pick your flatwork bidders after taking recommendations and looking at their work. When examining basement and garage floors, look for a highly troweled finish with the absence of pockmarks, trowel marks and many cracks. Don’t misunderstand, cracks in concrete are as certain as death and taxes. However, while a couple of small hairline cracks are acceptable, a spider web of cracks is not. Cracks can be controlled by the proper placement of scored joints or saw cuts. Concrete tends to crack in squares. Theoretically, a five-foot wide sidewalk will crack every five feet. That is why you see sidewalks divided by joints every five feet. The sidewalk may crack, but the joint allows it to crack without being seen. A twenty-four foot driveway should be scored or saw cut with a concrete saw, down the middle lengthwise. And then crosswise every twelve feet, forming twelve by twelve squares. Since concrete expands during warm weather, expansion joints should be placed between the driveway and the garage floor as well as between the driveway and the curb and elsewhere if necessary. Without expansion joints, an expanding slab has no place to move and will break and heave to relieve the pressure. In summary, pour a good mix without excessive water. Pour over a solid base with sand fill. Score or saw the slab into squares to control the cracks. Termite Treatment To termites, the Victorian mansion that you are contemplating is an open dinner invitation, unless you treat the footings, foundation and basement walls and floor slabs, including the basement, garage and porch floors.



An initial termite treatment also entitles you to purchase a maintenance contract from the treating company. If active termite infestation reoccurs, and your annual payments are current, there is no charge for the second treatment. However, that is customarily the extent of the treating company’s liability. The repair bill for whatever was on the termites’ menu is on you. When evaluating bidders, consider not only the cost of the initial treatment, but the type of guarantee and the annual maintenance contract renewal cost. You could be doing business with each other for a long time. Solicit bids from companies with proven longevity. Guarantees and maintenance contracts do you little good, if the backer of that guarantee has disappeared and is dangling his toes somewhere in the Caribbean. Rough Carpentry There is an old story in the construction business that goes like this: A large unshaven man looking for work walked onto the site of a home under construction. After being directed to the job foreman by another workman, he asked the foreman for a job. “Are you a rough carpenter? I sure do need one,” the foreman said. Without a word, the man walked over to a nearby 2x4, picked it up in one meaty fist, raised it high above his head, and swinging it like a hammer broke the 2x4 over a sawhorse. Still holding onto half the board, he handed the splintered end to the foreman and asked, “Is that rough enough for you?” While I have known some rough carpenters who could single-handedly clean out a serviceman’s bar, belligerence is not part of a rough carpenter’s job description. The term rough is used merely to distinguish this type of carpentry work from finish carpentry. In order to get accurate bids for rough carpentry, it is important to understand some of the technical jargon that contractors will use. While the rest of this section might seem somewhat technical, you will want to refer back to it when you are getting your bids. Rough carpentry is the framing of the home with dimensional lumber, installing the flooring and the roof and wall sheathing. Rough carpenters often times operate under the politically correct name of framing contractor. The framing of the home is the home’s skeleton. The studs, joists and rafters are the bones over which the skin of siding and roof covering is applied. Contrary to what they would like you to believe, studs are not virile carpenters. They are vertical structural members, either 2x4s or 2x6s that are usually placed either sixteen or twenty-four inches on center (o.c.). On center means the measurement from the center of one stud to the center of the next.



Dimensional lumber is not really the size it is labeled. A 2x4 is not 2”x4”. It was when it was rough cut. However, after milling it is about 1.5’’x3.5’’ Other lumber sizes shrink similarly. Studs are customarily placed 16 inches or 24 inches on center. When 2x4 studs are used 16 inches is the standard. A wall with studs 24 inches on center should use stronger studs than 2x4s to give the wall proper stiffness and strength. Floor structural members hold up the floor. These are usually either joists of 2x8, 2x10 or 2x12 lumberdepending on the span, or a pre-engineered floor truss. A floor truss is built in a factory, out of 2x4-triangulated bridgework and is designed to a specified span. The advantage of floor trusses is that when the bottom of the truss is used for the ceiling of the floor beneath it, whether that ceiling is the ceiling of the first floor in a two-story home or the ceiling of a basement, all ductwork and piping can be hidden within the truss space. With joists, the ductwork must be left exposed. No problem in an unfinished basement or crawl space, but less than elegant in a family room. Even when exposed ductwork is enclosed, its presence still disturbs the normal lines of the room. The problem with trusses, other than a higher cost than joists, is that on longer spans, eighteen feet and more, trusses develop a disconcerting springiness. The strength is there, but so is a certain amount of flex. Keep the spans below eighteen feet and you should eliminate the problem. Roof structural members are either a combination of ceiling joists and rafters or roof trusses. Joists and rafters are built on site out of 2x6 and 2x8 lumber. Roof trusses, like floor trusses, are pre-engineered and delivered to the job site already built. Roof trusses save labor costs and can span significantly longer distances than joists and rafters. Because of their long span capability, trusses allow for much more freedom of interior design. Interior bearing walls are not necessary with trusses as they are with joists and rafters. Wide-open great rooms reaching from one side of the house to the other can be created. Flex is not a concern with roof trusses as it is with floor trusses because, unless the neighbor kids are adventurous, roof foot traffic should be minimal. The sub floor is the material that is placed on top of the floor joists or trusses. Wafer board, a combination of thin plywood and particleboard, and ¾ or 1 1/8 inch tongue and groove (T&G) plywood are all used for flooring. The thicker 1 1/8 inch T&G is stronger and squeaks less than the other materials mentioned. It also can be spanned to 24 inches. Never span ¾ T&G over more than 16 inches. Roof and wall sheathing is the material that covers the rafters or trusses on the roof and the studs on the exterior walls. Wafer board, which is made by impregnating wood chips or wafers with glue under pressure and molding them into 4’x 8’ sheets, is often used for roof sheathing, as well as CDX plywood. Both materials are made with exterior grade glue, which is a must for any sheathing material. Sheathing can range from 7/16” to 5/8” depending on the span.



Roofing paper and shingles are installed over the roof sheathing. The exception to the solid sheathing of wafer board or plywood is when a roof is shingled with wood shingles (not wood shake shingles). Wood shingles that are not shakes should be installed over spaced sheathing often called stripping. Codes usually specify that spaced sheathing must not have gaps of more than six inches, or be wider than the width of the sheathing boards, whichever is less. Spaced sheathing allows air to reach the underneath sides of the wood shingles which helps to dry them after a rain. In time, wood shingles over solid sheathing will rot due to improper drying. Shake shingles are not subject to damp rotting because the roughness and irregularities of wood shake shingles allow sufficient air circulation. Wall sheathing can be made from the wafer board or plywood previously mentioned, asphalt impregnated fiberboard, expanded polystyrene or other types of foam sheathing. Foam sheathing is for insulating purposes and affords none of the lateral strength of wood sheathing. Diagonal bracing must be used with foam type sheathing. Also included in your rough carpentry bid should be any necessary blocking. Since you may not always be so lucky as to have towel racks, hand rail brackets, paper towel holders and any other accessories fall in the exact spot to screw to a stud, you should have lumber nailed between the studs to fasten these items to. Ceilings require blocking at the room perimeter to nail the sheetrock edge to. Bathtubs and showers need blocking where the wall covering and tub or showers meet. Rough carpentry bids should include all material and labor to build the skeleton of the home including the roof and wall sheathing, all sub flooring and anything else made of wood contained within the wall, floor or roof cavities. Take copies of your plans to each person on your rough carpentry list. Ask your bidders to return your plans with their bid. Plans get very scarce during the bidding process and you need as many available sets as possible. Shingling Shingles are priced and sold by the square. A square is one hundred square feet of roof. Because of the roof slope, the area of the roof will be greater than the area of the home. The more the roof slope the greater the difference. The most commonly used shingling materials are asphalt shingles, wood shingles and wood shake shingles. Asphalt shingles are graded by weight with minimum weights being approximately 215 lbs per square ranging to maximum weights of 300 lbs, and more, per square. The heavier the shingle (i.e., the more material that is used), the higher the price. The heavier asphalt shingles have more “body” in an effort to simulate the appearance of



wood shingles. Asphalt shingles commonly come in strips of thirty-six inches, which contain three individual shingles. The most common type of asphalt shingle is the self-sealing type. With self-sealing shingles, each shingle has a factory-applied adhesive spotted on the top part of the shingle strip. As the next course of shingles is laid over the bottom strip, the adhesive sticks to the underside of the upper shingle, holding it securely in place. Sun radiation and warm air temperatures activate the adhesive, creating a permanent bond between the shingles. When self-sealing shingles are installed on a cold day, the adhesive may not activate properly. If a high wind comes up before the sun comes out, the shingles will stand up like the upturned bill of a ball cap. If at all possible, do your asphalt shingling on a warm, sunny day. Interlocking shingles are another type of asphalt shingle. Each shingle interlocks with the one adjacent to it. Self-sealing shingles are much more aesthetically pleasing and have completely replaced interlocking shingles in most markets. Asphalt shingles must be installed over an underlying layer of roofing paper usually referred to as felt. Regardless of type, all asphalt shingles (and wood as well) are fastened with nails or staples above the part of the shingle that is exposed to the weather. Where a roof changes direction, a valley is required. Valley flashing for asphalt, wood and wood shake shingles is the same. It should be made of galvanized sheet metal that is installed over felt. Where the roof abuts a vertical surface, such as a chimney or second story, flashing must be installed to weatherproof the roof at that intersection. Any penetrations through the roof such as plumbing and furnace vents must be flashed or sealed. Your local building code will address the approved amount of exposed shingle for various roof slopes. The steeper the slope, the more shingle exposure that is allowed. To ensure a watertight roof, shingles should extend past the edge of the roof sheathing and fascia board by about an inch. To support the extended shingle at that point, roof edging should be nailed to the fascia board. Roof edging can be made from galvanized sheet metal, cedar or redwood. Shingling bids should include all shingles, roofing felt, nails, roof edging, flashing and anything else required to complete the roofing job. If they wish, give your rough carpentry bidders the opportunity to bid on your shingling work as well, along with subcontractors that specialize in shingling. As mentioned earlier, if you are not paying a price penalty, the more work one subcontractor can perform the easier it is for you.



Equipment Make sure that your subcontractors understand that they are responsible for any equipment required to complete their job. If your rough carpenter can’t horse trusses into place by hand, then he had better have a piece of equipment (either owned, rented or borrowed) that can. Do this with all of your subcontractors. Make it clear to all that you are not providing any equipment. Exterior Siding Exterior siding is installed horizontally, vertically or in some instances diagonally. Horizontal siding is normally 12” or less in width. It is installed in an overlapping style, meaning that the top of one siding board overlaps the bottom of the board above it. Horizontal overlapping siding is most commonly manufactured in redwood, cedar, hardboard, vinyl, aluminum and steel. Vertical siding is usually manufactured from either plywood or hardboard in 4’x8’ or 4’x9’ panels. The panels may have vertical grooves machined into them that are called reverse battens. The panels may also lack grooves and instead have batten strips nailed to the plywood to simulate a board and batten appearance. Although as just described, most board and batten siding is now done with plywood, the installation of vertical siding lumber with battens nailed at joints is still practiced. Diagonal siding is installed like vertical siding, only at a 45-degree angle. Windows and Exterior Doors I suggest that your finish carpenter install your windows and exterior doors. The reason for this is that the subcontractor that has to finish and trim around the windows and doors will be more particular about their installation being plumb and level than a rough carpenter who may have framed up another three houses by the time the trimming on your home begins. Window types can be horizontal sliding, single hung, double hung or casement. Sliding one of the windowpanes to the side opens horizontal sliding windows. Single hung windows are raised vertically to open, while the bottom pane raises and the top pane drops on a double hung window. Casement windows are cranked open and closed with either the side opening outwards like a door, or the top (also called awning windows) or bottom (also called hopper windows) opening out like a flap. All four window types can be manufactured in aluminum, wood or wood clad. Aluminum windows have for many years enjoyed great popularity in the temperate climate of the south. Aluminum windows are inexpensive and easy to install. Until recently however, aluminum provided about as much thermal resistance as a pair of gym shorts on a winter morning dash for the newspaper. Because of that poor thermal



resistance, which not only let in the cold, but also allowed condensation to create mini waterfalls on the inside metal and glass, aluminum windows were shunned in the central and northern states. But iinstead of being made with only a single pane of glass and nothing to stop the heat and cold transfer through the metal sash (sash is the frame around the glass), they are now made in double and triple glazed insulated glass with a thermal block in the metal sash to impede thermal transfer. Because of the new energy efficient construction, aluminum windows now receive a much warmer reception north of the Sun Belt. Aluminum windows are factory finished in the traditional mill finish (everybody’s idea of what aluminum looks like), white, or dark bronze. The advantage to aluminum windows is that they require no painting. Wood is a natural thermal block and has been used to make windows since man decided to abolish the draft. Wood windows, like metal windows, are made with double and triple glazed glass. When you buy a wood window, plan on periodically painting it because they do require maintenance. However, if you enjoy changing color schemes, that may not be so bad. With wood clad you have the no-maintenance advantage of aluminum windows, coupled with the warmer, more traditional appearance of wood. What ‘clad’ means is that the exterior wood of the window is covered witheither vinyl or metal. Windows, especially if they are wood clad, will most likely be your most costly bid. Research what is popular, in terms of style and brand, in your area and why. Exterior doors should be manufactured for exterior use, which means that if it is a wood door, it is laminated with an exterior grade of glue. Hollow core wood doors are offered as exterior doors, but they offer little security. Solid core wood doors are a much better choice. Exterior doors are also manufactured with a steel cladding over a foam-insulated core. Insulated doors are usually built with the doorframe pre-hung at the factory. By building and weather stripping the door and frame as a unit, the factory controls the thermal efficiency of the entire opening. If your doors require on-site hanging, buy an exterior doorframe to hang it on. An exterior doorframe is meatier than an interior frame, plus the stop is an integral part of the frame rather than a separate piece nailed to it. The doorstop is the part of the frame that the door’s edges rest against when the door is closed. Wood is removed at the factory from the inside face of the jamb on the door side, leaving a ridge all the way around the doorframe. The ridge is the stop and the door closes against it. Cutting the stop from the frame improves the weather tightness of the frame as opposed to nailing on a separate piece of stop.



Aluminum windows are generally manufactured regionally, while major brands of wood and wood clad windows are distributed nationally. Wood and metal clad doors are also distributed nationally. Sectional Garage Doors Sectional garage doors can be made from wood, steel, aluminum or fiberglass. Wood doors will require priming and painting. Steel doors will most likely have a primed finish. It is important to know what is required to finish the type of door that you choose. Sectional garage doors should be purchased from a dealer that also installs them. Sectional door contractors also sell and install door operators. Finish Carpentry Door hanging, trim and molding installation, shelf building, hand rail installation, fireplace mantel building, paneling installation and the building or installation of any other finished wood project falls under the category of finish carpentry. Doors and trim are milled in several species of wood, from soft woods like white pine, silver maple and hemlock, to harder woods like mahogany, birch, oak and ash. Although somewhat difficult to work with and more expensive, the harder woods yield a more beautiful grain when stained and finished. The harder woods are also much more durable than the softer woods. Where a recklessly wielded vacuum sweeper can take a nasty chunk out of a white pine baseboard, an oak baseboard will take the same blow as easily as George Foreman. After five years of furniture rearranging, Tonka truck crashes and sweeper banging, oak door trim will look like new, while pine trim will be ready for the fireplace. It does take a little longer to install the harder trim. Because of its hardness, driving a finish nail into it without first drilling a pilot hole will usually spilt the trim. Drilling a hole for each nail is time consuming and will cost you more than not doing so, but it is necessary for a good job. Wood trim is milled not only in a variety of species, but in a variety of configurations as well. The style of your home and your intended décor will determine your trim configuration. A traditional two-story with early American furnishings lends itself well to the scrollwork of a colonial trim. A more contemporary home in style and furnishings dictates the use of a smooth surfaced modern trim. You should choose doors from the same wood species as the trim. That choice seems obvious. However, for reasons of economy, a more expensive species of door is often paired with a cheaper species of trim. That’s like walking a thousand dollar suit in a pair of discount boat shoes.



As you have a choice of configurations with trim, you have a choice of types with doors. A flush door is the smooth face door that everybody is used to. A raised panel door is the relief routed door that everybody whose homes have his and hers Mercedes are used to. If you haven’t blown your budget yet, raised panel doors make a great impression. Raised panel doors are solid wood doors. Flush doors are either hollow core, which means the surface veneer is laminated to heavy honeycomb formed paper; or solid core, which means the surface veneer is laminated to a core of particleboard. There is another choice in doors, which is a cross between a hollow core and raised panel door. It is made from hardboard (paper thin layers of wood pressed together) and is formed to have the appearance of a raised panel door, although in reality it is hollow core. These doors come either pre-finished or unfinished. Solid core doors have more material, which makes them more expensive than hollow core doors. Since they are heavier, they are also more costly to install. They are also more private because they don’t transfer sound as easily as hollow doors. Doors and doorframes can be purchased unhung or pre-hung. When doors and frames are purchased unhung the door is blank. It has not been mortised for hinges and has not had a latch set hole drilled. The frame comes knocked down, (K.D.), which means it is made of two separate sides (jambs) and a top (header). The frame must be installed in the rough framed opening and then the door is hung on the frame. It is time consuming, precision work. Pre-hung doors come assembled from millworks with the door already hung on the jamb. Solid jambs and split jambs are the types of pre-hung doorjambs available. With split jamb pre-hung doors, jambs are split down the middle with a tongue and groove connection. The casing trim is already fastened, usually with staples, to each side of the jamb. The split jambs slide together from each side of the opening. To secure the door in the opening, the casing is nailed to the rough opening frame. Nails cannot be driven through the frame in the normal manner because the casing trim is already attached and shims cannot be placed to support and stiffen the jambs. Nailing through the jamb would distort it to the point that the door would not fit properly. Solid jamb pre-hung doors, once in the rough opening, cannot be distinguished from doors that were hung on the job. The casing trim is installed on the job so the frame can be shimmed and laterally supported properly. Make sure that the frame is milled from the same wood species as the door, and that the gap between the door and the frame is uniform all the way around the door. Solid jamb pre-hung doors are labor savers; it is much faster to hang a door in a millwork jig than on the job. It is also a method of quality control. At the millworks, each door is hung like the one before it. On the job, each door is hung individually and subject to



mistakes. Less hanging time equals less labor cost. Better quality control equals no mistakesand therefore less cost due to no ruined material. Interior doors should be at least 32 inches wide. All exterior doors should be 36 inches wide. Check your local code for any special door width requirements. Solicit bids from recommended finish carpenters. When evaluating prospective bidders’ work, look for tight, mitered trim joints and corners. Tight means no gaps that need to be filled with putty. There should be no split wood around the nail holes, no clinched (bent over) nail marks and no hammer marks on any of the trim. All trim should be installed with finish nails (the head is only slightly bigger than the nail shaft) and the nail heads set (driven below the surface with a nail set). Check the doors for plumb. Without hauling a carpenter’s level with you everywhere you go, you can check a door for plumb by verifying that the gap between the door and the frame is the same width from side to side and from top to bottom. The gap should be approximately 1/16 to 1/8 inch. The mark of a good finish carpenter is that you will see no marks. Wherever wood meets wood, you will see no space. If putty is seen other than to fill a small nail hole, a mistake has been made. It is possible that you will find finish carpenters who prefer not to supply the material. They want to be paid for their labor and not worry about anything else. If that is the case, you will be purchasing the material directly from the supplier. Millworks and lumber yards are suppliers of doors and trim. Take your plans and specifications to each material bidder and have them do their own material list, also called a take-off because the list is taken off the plans. All door trim, baseboards, window trim, paneling, wainscot, ceiling and floor tile molding and any other trim or moldings made necessary by your house plans should be included in the bid. Have all door hardware, including latch sets, figured into the bid as well. Cabinets Cabinets can be built specifically for your home by a craftsman working on the premises, or in a local cabinet shop. Your cabinets can also be an assembly of factory manufactured cabinet units, designed to fill the allotted cabinet space. Factory units come in sink bases, drawer bases, door bases and corner bases which sit on the floor and are capped with a counter top for use in the kitchen, laundry room or wherever else cabinets are needed. Wall units of various widths can house shelves. They are wall hung above counter tops, or above the washer and dryer in the laundry room or the toilet in the bathroom. As long as you get a good result, it matters little whether the cabinets are built on site or off. However, cabinets are like most commodities: the price when manufactured in a factory is cheaper than when built by hand. There are exceptions so certainly do not



ignore the local cabinet shops in your area but remember that cabinets built away from the job, whether in a shop or factory, still must be installed in your home. Cabinets built in a local shop should be installed by the cabinetmaker. Factory-built cabinets should be installed by your finish carpenter. Regardless of which method of cabinet manufacture you select, make sure that you have quoted prices for both the cabinets and installation labor. As with finish carpentry, look for tight joints and plumb hanging doors. Unlike walk through doors, cabinet doors lap the frame so there is no space between the door and frame to check the cabinet door for plumb. However cabinet doors usually hang in pairs. Check for a consistent space from top to bottom between a door pair and make sure that the tops and bottoms of each door pair line up. Try to match the wood species of your cabinets to the wood species of your doors and trim. Realistically you will probably pick your cabinets first and then match your doors and trim to them. It doesn’t matter which one you start with when matching wood species, you can begin with your great grandpa’s hall tree for that matter, as long as they are the same. Factory built cabinets are purchased at millworks, lumberyards or at specialty cabinet or kitchen shops. Hardware Doorknobs, handles, latch sets, stops or bumpers, hinges, cabinet drawer and door pulls, and window handles are hardware. Verify whether hardware is included in your bids. Hardware can be purchased at building supply centers and lumberyards. Counter Tops Kitchen counter tops are usually covered with ceramic tile, plastic laminate, natural stone or a synthetic stone material. Installation requirements are different depending on what type material is used. Some tops require a substructure, while others do not. Know what is required of the tops you intend to use. Make sure that you have installation quotes for each type of counter top that you choose. If your finish carpenter does not do this kind of work, he can recommend a workman that can. Counter tops are found at cabinet suppliers. Masonry Back in the early part of the last century, when men were men and cokes were a nickel, brick houses were really built from brick. That means that the walls of the home were brick on the outside, brick on the inside with brick in between. The inside brick faces were covered with lath and plaster to provide the finished wall. The wall thickness from outside to inside was about twelve inches.



The brick on brick houses today is brick veneer. The brick is still real brick, but instead of a structural component, the brick is the cosmetic, weatherproof covering of the wall framing, serving in principal, the same purpose as exterior siding. All of the above apply to stone, as well. The price of masonry veneer is determined by the cost of the face brick or stone, masonry cement, masonry sand, mortar die if any is needed, brick ties and labor. Fireplaces require the preceding material, plus common brick (face brick culls), masonry block, chimney flue tile and either fire brick and a steel damper or a steel firebox that includes a damper. Steel fireboxes are very popular because most of the models are designed to put some of the fire-heated air back into the living area rather than straight up the chimney. Some units incorporate fans. Ductwork can be attached to the fans to direct warm air throughout the home. Select masonry bidders from recommendations, just like you would select bidders from other trades. Local brick plants are also worth a few inquiries. The mortar joints of a prospective mason’s work should be checked for a smooth, clean joint without mortar residue on the adjacent bricks. The horizontal joints should be straight and level, and the vertical joints should be plumb. Bricks are normally laid in a bond where a vertical joint intersects the middle of the brick above and the brick below it. Although all the vertical joints are separated by bricks, they should still line up with each other. The masonry contractor is responsible for cleaning the brick as recommended by the manufacturer. Have masonry bidders give a labor price and a price including labor and materials with a quantity break down. Price the material yourself for a comparison. Masonry cement is purchased by the sack from lumberyards and other building material suppliers. Bricks are bought from brick plants. Make sure that you price masonry sand, which is much finer than fill sand. Also make sure all the prices, especially the brick prices, include the price of delivery. Drywall Drywall (as opposed to the wet wall of plaster), also called gypsum board or sheetrock, is the material most often used to cover ceilings and walls within today’s new homes. Generally, ½” sheetrock is used throughout the house, except for the wall between the house and garage and the partition and ceiling enclosing the furnace. Those exceptions to ½’ sheetrock are covered with 5/8” type X sheetrock (fire code) which due to its additional thickness and treatment of the paper covering is more fire resistant than ½.” Whether your walls are to be painted, wall papered or paneled, sheetrock should first be installed. When painting or papering, the sheetrock nail dimples should be filled with joint compound and sanded smooth, while the joints should be taped with a joint tape,



filled with compound and sanded smooth. Once sanded, the wall should be jointless and free of imperfections. Once painted or papered, there should be no evidence of joint or nail placement. Paneling, unless 3/8” thick or thicker, should have the additional back up support that sheetrock affords. However, since joints and nail dimples cannot be transmitted through paneling, only the recess sheetrock edge should be a taped and filled. If a paneling nail is driven into the paneling at an unfilled recessed edge, the paneling edge will be drawn back into the recessed area and show an uneven paneling joint. When looking at a finished sheetrock wall or ceiling, the evidence of joint and nail placement should be nonexistent. Ceilings can be finished by texturing, skip troweling or stippling. Texture (a mixture of joint compound, paint and acoustic material) is sprayed on. Skip troweling, also referred to as knockdown, is a mixture of joint compound and paint that is sprayed on and then flattened with a trowel revealing a light stucco appearance. Stippling is a mixture of joint compound and paint that is applied with a brush, usually in some type of pattern. Sheetrock finishers may or may not, depending on their back strength and temperament, hang the sheetrock they finish. When soliciting bids make sure that you have labor quotes on both jobs. It is easier on you as a general contractor if one subcontractor does both the hanging and finishing. But sometimes, because of either price or capability, that is not possible. Take material bids with quantities listed and compare those prices to the price of supplying your own material. Sheetrock is purchased from lumberyards, building material suppliers and drywall suppliers. Carpenters and painters are good sources for recommending capable sheetrock finishers. Paint, Stain and Varnish The procedure for the painting, staining and varnishing bid solicitation is the same as for all other trades previously mentioned. Trim can be stained and varnished either before or after installation. If stained and finished before it is installed, paint the walls first. That way no masking off is necessary and there is no danger of mistakenly painting varnished surfaces. If the trim is stained and varnished in place, first staple masking paper around the door jamb so that the paper laps at least three inches beyond the edges of the trim when installed. That way staining and varnishing can be done without marking the walls. If the walls are painted after the staining, the paper can then be folded over and taped to the trim to protect it from the wall paint. When examining prospective painters’ work on the interior of a home, look for painted walls that are completely covered, showing no unpainted ghosts beneath the final coat.



Make sure that there are no runs or paint slopped on varnished woodwork. Check for a sharp painted line where the walls and ceiling meet. Exterior siding and trim should be covered well and free from runs. There should be sharp lines between painted surfaces of two colors and unpainted surfaces should be free of slopped paint. When examining varnished woodwork, run your hands over doors and trim to check for smoothness. Make sure that the tops and bottoms of the doors have been sealed. If not, the doors will absorb moisture and, in time, warp. As with painted walls, check the woodwork for an even staining with no runs. All nail holes should be filled with putty. The painter should be responsible for all caulking on painted surfaces and between painted surfaces and unpainted surfaces such as siding and doors or windows. It is customary for painters to supply the material. However, some painters, such as those that work out of their car trunk or pick-up truck bed prefer not to buy material. If your painter does not supply the material, have him quote you quantities to price yourself. Floor Covering Carpet, ceramic and quarry tile, hardwood or parquet and hard surface (sheet vinyl) are the primary types of floor covering installed in new homes. When comparing carpets, make sure that the yarn content is the same. Often times a particular carpet model will be manufactured in three different yarn weights. Visually the difference is undetectable. However, the carpet with a higher weight will be thicker and wear better than the lighter carpet. It will cost more too. If you buy the lightest weight carpet thinking you are paying for the heaviest weight, you obviously will be shortchanged. With tile and vinyl, also make sure that you are comparing materials of the same size and thickness. With vinyl, is the pattern inlaid through the entire material or merely printed on the surface? Remember, bid apples to apples. Carpet that is stretched over a pad requires very little, if any, subfloor preparation. The carpet will absorb whatever irregularities there are in the sub floor such as plywood seams that do not match perfectly. Stretched carpet, the normal method of residential installation, is fastened by a tack strip around the room’s perimeter. Tile and vinyl floor coverings do not have a pad to cover subfloor irregularities. It is critical that the sub floor over which these coverings are laid is free from separated or uneven seams. Imperfect plywood seams will always be transmitted through vinyl floor coverings. Bad flooring seams can cause ceramic or quarry tile and grout joints to crack, as well as cause parquet wood tile to split. Inform your bidders that they will be responsible for whatever floor preparation is required; whether it is filling separated seams with floor putty or covering the flooring with a thin underlayment.



Require your floor covering supplier to install it as well. When carpet or vinyl is seamed improperly, invariably it is not the fault of the subcontractor that you are questioning. The installer blames the problem on the carpet; the carpet supplier blames the problem on the installer. This argument seems to happen with floor covering more than any other trade. Make the floor covering and installation the responsibility of one subcontractor and there will be no doubt who to praise or to blame. Insulation All wall and ceilings with an exterior exposure should be insulated. The stud wall cavity of all exterior walls should be insulated, including stud walls separating living space from a garage or unheated storage area. The ceiling joists and/or roof trusses should be insulated and the cavity between the floor joist and trusses along the outside wall should be insulated. The basement walls or the foundation walls on a home built over a crawl space should be insulated. For walls, fiberglass and rock wool insulation is made to fit between studs that are set to both 16” o.c. and 24” o.c. When this insulation comes in eight-foot lengths, it is called bats. When it comes in longer lengths and is packaged in rolls, it is called blankets. Both bats and blankets can be used to insulate ceilings by installing the insulation between the ceiling joists or between the bottom cords of roof trusses, depending on the type of roof structure used. Loose fill insulation, which is tufts of fiberglass or rock wool spread evenly over the attic side of the ceiling, is another method of ceiling insulation. R-values measure insulation’s ability to withstand heat and cold transfer. The higher the R-value the more transfer it withstands. R-values can be increased by making the insulation denser (more insulation material per square inch). However, with fiberglass and rock wool insulation, increasing the insulation thickness is the most common method of raising R-values. Twelve inches has a better R-value than six, and six has a better R-value than three. Wall insulation thickness is limited by stud depth. Since most attics have at least two feet of clear space, the attic insulation is limited only by budget and good sense. There are contractors specifically in the insulation business. Take one bid, including bothmaterial and labor, from each recommended insulation contractor. If there is a scarcity of insulation contractors in your area, you can buy bat insulation from a lumberyard and have your rough carpenter install it. Carpenters are a good source of recommendations for insulation contractors.



Basement and foundation walls are normally insulated with one- to two-inch thick Styrofoam or expanded polystyrene board. The foundation wall of a home built over a crawl space should be insulated on the inside of the wall by gluing the foam board to the foundation wall. The insulation should extend from the bottom of the floor structure to the top of the foundation footing. Use glue that is recommended by the manufacturer of the foam board. Since the inside of basement walls is exposed to contact and view, any insulation installed on the inside of a basement wall must be covered. That is accomplished by installing 2x2 wood strips, called furring strips, to the basement wall and then insulating with foam board between the strips. Sheetrock or thick paneling is then installed over the furring strips. Since a 2x2 is really only 1 ½” deep, any foam board thicker than 1 ½” will not work. If you do not intend to immediately finish your basement, you can save the cost of furring and wall covering by insulating your basement walls on the outside. The process is the same as insulating a foundation wall with a crawl space, only the opposite side of the wall is insulated. However, there is one vulnerable spot on an outside basement insulation job: the exposed concrete between the ground surface and the siding. If the insulation is extended to the bottom of the siding, it is not durable enough to withstand the assault of lawnmowers, grass trimmers and neighborhood animals and is quickly destroyed. If the insulation is stopped at ground level, there are several inches of wall left that are not insulated, thus offering a band of thermal transfer. Your options are:

1. Extend the insulation to the siding and then coat it with something to make it both tough and attractive.

2. Stop the outside insulation at ground level and then insulate the inside wall to cover the bare spot.

If your home is covered with a brick veneer and you insulated on the outside of the basement, then option 2 is your only option. Who insulates foundation and basement walls? You can. It is not difficult work unless the wind is blowing. Because foam board is very light, it can take off in flight in a strong breeze. However, timing can be a problem. To hold and protect the insulation, the wall must be backfilled shortly after the foam board is placed. If scheduling (or desire) prevents you from doing it yourself, talk to your rough carpenter or foundation contractor. Foam insulation board can be found at most lumberyards. Electrical Regardless of whether your new home is built within a jurisdiction that requires electricians to be licensed, make sure that the ones you use are licensed. It is also



important to make sure that to become licensed, your electrician had to so something more than just write a check (like pass a test). A door that hangs crooked won’t close properly and looks bad. A sorry shingle and flashing job may leak and cause a soggy mess. A carpenter’s mistakes may cost you a lot of money, but short of a cave-in, they will not kill you or your family. An electrician’s mistakes can. Since it is very difficult for anyone without electrical training to determine if a wiring job is done properly, solicit bids from only licensed electricians with spotless reputations for both honesty and capability. Your house plans should include a floor plan that locates all light fixtures, outlets (110V and 220V), switches, fans, furnaces, circuit breaker boxes, fuse boxes and all appliances. Make sure that the outlets shown are sufficient for your needs. What appliances will you operate on the kitchen counter top? Do you have enough outlets? Think back to your furniture arrangement. Do you have outlets close to the night tables in each bedroom? What about the end tables in the living room and family room? Also consider the furniture location after the rearranging bug has bitten you. Whoever drew your plan put the outlets where he thought they should go. Move them to where you want them to go. Have you counted how many electrical cords come out of a television set, VCR, CD player, DVD player, AM/FM cassette player, personal computer terminal, monitor and printer? Provide plenty of outlets, if yours is a high tech household. Extension cords criss-crossing the room like the lines on your palm suggest something less than high technology, not to mention the fire waiting to happen. Have you added a dishwasher, garbage disposal, microwave, trash compactor, garage door opener or any other appliance that is not shown on the plans? If so, mark it down. Do you have enough outside lights and outlets? If not, add them. After you have finished rearranging your outlet locations, and feel fairly certain that you have it right, you may still be short. Consult your electrical bidders to make sure the location and number of outlets conforms to the local electrical code. Make sure that every hallway on your plan has a switch at each end and every room has a switch at each doorway. If not, your choice after watching the “Late, Late Show” is a) to leave the lights on all night, or b) to turn them off and try to feel your way across a toe-stubbing, shin-banging room full of furniture and down a hallway, leaving a trail of fallen picture frames left in your wake.



Something as obvious as a three-way switch, or a switch that allows one light to be switched on and off at two different places, can easily be forgotten. You thought I made the picture frame part up, didn’t you? If it is not on the plan, it probably will not be included in your bids. Adding outlets and switches after the walls have been finished is an expensive job. Electrical bids should include both labor and material as a single bid. It is not recommended to purchase electrical material from any source other than the electrical contractor who installs it. Stress that the material and labor supplied must meet all code requirements. If something on the plans does not meet the electrical code or a code requirement is left off the plans, explain to all bidders that it is up to them to bring the error to your attention BEFORE the bids are given. Have each bidder include a fixture and ceiling fan allowance in their quote. Quiz the bidders about what would be appropriate for your house plan. Fixtures can be very expensive. Either have a good idea of what you want and explain it to your bidders, or accept their suggestions and double or triple their estimated cost. However you do it, have all bidders include the same amount. Plumbing As with electricians, it is important to use only a licensed plumber on your home, regardless of your jurisdiction’s licensing requirements. Not just because an improperly installed toilet may overflow and drown you in your sleep, as the cold water would probably wake you up anyway. But because plumbers run gas lines as well as water and drain lines. Gas line leaks have a nasty habit of exploding in a very large way. Never do you see only a furnace room door blown off its hinges, but more likely a refrigerator door blown across the street, accompanied by the stove and garage. Licensed plumbers prevent those kinds of ‘inconveniences’ from happening. The old construction worker’s saying that, “to be a plumber, all you need to know is that crap flows downhill, don’t lick your fingers, and payday is on Friday,” is far from true. Does your plan show outside water hydrants where you want them to be? You need hydrants located so that you can water your yard or wash your car without running more than one hundred feet of hose from any one hydrant. Do you want a bathroom in your basement? Is it shown on the plans? If not, make sure you add it. If you want to put a bathroom in your basement at some time in the future, you should install the drain piping in the basement floor and have easy access to a water line. That is called roughing in a future bathroom. Note any bathroom rough-ins on the plan.



What appliances need plumbing? Garbage disposals, dishwashers, washing machines, refrigerators with ice makers and/or water dispensers, gas ranges, gas furnaces, gas water heaters, water softeners, humidifiers are all examples. Are they all where you want them to be? Is there anything else that you want that hasn’t been added to your plan, such as a laundry room sink, a basement photography darkroom or anything else that uses and gets rid of water? Do you have a floor drain in your basement? You should. The reasons are endless. If the sewage system in your neighborhood is too high to allow for a floor drain, put in a sump and a sump pump. Remember to tell your electrician and flatwork contractor about this as well. The pump needs power and the slab needs a concrete hole. If you live in an area that is prone to sewer mains backing your neighbor’s bath water and other things into and out of your toilet, install a backwater valve. Sewer mains usually back up due to lift station malfunctions. Lift stations elevate and thus speed up sewage on its trip to the treatment plant. Power outages and floods can cause the lift station pumps to shut down, stopping sewage flow. Power outages don’t stop toilets from being flushed though, and a few flushes too many will add more water to a clogged main than it can hold. Then the sewage begins backing up hunting for an escape. If your floor drain is the unlucky spot, look out! There are few things worse than the sight of someone else’s toilet paper floating in your basement. Backwater valves stop all that. They are flapper valves, hinged at the top, that allow water headed to the sewer main to pass through. They are placed on the sewer main side of all home drain line openings. Water coming from the main back towards your home will meet a closed valve. Locate backwater valves where they can be periodically serviced. The valve flapper must be kept moving freely or the valve will clog, and instead of seeing someone else’s toilet paper, you will see your own, which isn’t much better. What kind of vanity tops will you use? If the sink is molded into the top, your plumber needs only to install the faucets and hook up the water and drain line. If not, a vanity sink must also be provided. Make sure the type of top is labeled on the plan. Outside water, sewer and gas lines are called utility services. It is customary for the homeowner to be responsible for the utility line linking the home to the main line. With a house on a crawl space, it matters little where the water, sewer or gas line enters the crawl space. Plumbers run piping underground from the meter to the closest part of the house, then under or through the foundation and through the crawl space.



But with a basement, the closest spot to the meter may fall in a finished family room. Make sure the water line enters the basement in the same area as the water heater, even if it means more underground water lines. If the sewer main is low enough to permit the sewer service line to enter under the basement floor, the line will be concealed from view and can enter the home at any point. But if the service line can only be four-foot deep, it will come through the basement wall four foot off the floor and destroy that part of the basement as a finished living area. If sewer service is not in the basement floor, have it enter the house somewhere that will not be finished. Gas lines enter homes above ground level. With houses over basements, gas lines enter through the rim joist and into the floor joist or truss space. Since the gas line is within the joist space, it won’t be exposed, cluttering up the basement. But since it is wise to have no more enclosed gas line than is absolutely necessary, bring the gas line into the house as close to the furnace as possible. If you have not yet purchased your building lot, the distances from the utility mains to the house are unknown. It won’t matter whether the water is figured to the nearest part of the house or the part furthest away, the plumbers do not know the footage and thus cannot quote an exact price. In that event, have your plumbers quote you a per lineal foot price on water, gas and sewer lines. To estimate the cost of utility services, take the approximate anticipated distance of each and multiply by the per foot price. Add those estimated costs to the bid for the plumbing within the house to arrive at your total plumbing bid. Take one bid including both material and labor from each plumber on your bidders list. Follow the same procedure for seeking plumbing bidders as you would with electricians and other trades, but add plumbing supply houses as an additional place to ask for recommendations. Remember, gas lines are serious business. Use only capable, licensed plumbers that perform their work to code, whether they are within a building department’s jurisdiction or not. Heating, Ventilation and Air Conditioning (HVAC) Heating, Air Conditioning and Ventilation systems, more than any other part of your home, are dependent on your geographic location. An electrical plan could serve a home in Miami or Bismarck, North Dakota equally well. But since, on a January day, there can be an eighty-degree temperature difference between those two cities, the HVAC requirements are completely different and more specific to location than probably any other trade.



The most common types of heating systems are hot water or electrical baseboard heaters, heat pumps, and forced air furnaces. Baseboard heaters radiate heat from the unit. Forced air furnaces and heat pumps blow warmed air through a distribution of ducts. Central air conditioning blows cooled air. It blows through the same blower and through the same ducts as the heated air coming from either the furnace or heat pump. Baseboard heat requires no ductwork. If central air conditioning is used in conjunction with baseboard heat, the air conditioner must have its own blower and ductwork system. Normally, if central air conditioning is required, either a furnace or a heat pump supplies heat. The heat source is a minor add-on once the air conditioner and ductwork are already figured into the price. Radiant baseboard heat is used in cooler climates where air conditioning is not necessary. With blown heat and central air conditioning ductwork, placement is of prime concern. Do the supply registers come out of the ceiling or the floor? We all remember from elementary science that hot air rises and cold air falls. If you’ve forgotten that, crawl into your attic on a sunny July day. What is the most critical function of your system, heating or cooling? If you live in the deserts of the southwestern United States, it is cooling. Your ductwork should then go in the ceiling. The cooled air comes out of the ceiling and falls slowly to the floor. In cold climates, when heat comes out of the ceiling, the common complaint is, “My feet are freezing.” If heating is your major concern, put the supply registers in the floor. Return air vents recycle the blown air back to the heat source or air conditioner. The compromise between heating and cooling in your area will determine their placement. Use a system that is common to your area. It’s common for a reason. It works. Remember, this is not the time to be a pioneer. You must also specify to your bidders what type of fuel that you will use. Fill your bidders’ list with recommendations from the previously suggested sources. Take one bid from each bidder that includes both material and labor. Often times, HVAC contractors are also plumbing contractors. This combination will save you the headaches of dealing with another subcontractor, and if there is no cost penalty, great. Like plumbers, use capable, licensed HVAC contactors that build to code whether in a building department jurisdiction or not. Telephone and Cable TV Telephone wire and TV cable run through the stud walls of your home. The installers of your telephone equipment and TV jacks should either pre-wire before the interior wall covering is installed, or your electrician should rough-in conduit for the wires and cable to run through.



As a practical matter, its usually easier to have your electrician install flexible plastic conduit while he is roughing in his work than it is to try to get a phone installer and TV cable installer on the job during construction. Also, when the electrician does it you’ll be assured that the telephone and TV boxes and cover plates will be the same height as the electrical outlet boxes, which looks nicer than different heights for each type of box. Have all the telephone boxes and TV boxes located on your plan. Appliances What appliances should be included in your home’s construction estimate? Whatever appliances it is customary to sell with an existing home, usually whatever is built in. The main items are the kitchen range, dishwasher, trash compactor, microwave oven and central vacuum system, if any. If you are buying a new refrigerator, washer, or dryer, even if you pay for them separately, you should include them on your bid request. The more volume, the better the price. Trash Construction jobs make trash. A lot of trash. As general contractor you are responsible for getting rid of it. Subcontractors should clean up their own messes, and put their trash in a designated on-site spot. Check on local requirements about construction waste storage. Your job is to get the trash from the storage area to the landfill. The easiest way is to hire a commercial trash hauler to set a large receptacle on your job site. When the receptacle is full, the trash company hauls it away. If you have access to a truck or large trailer, you can haul the trash yourself. But be prepared to work. Plywood and sheetrock are heavy. Take bids from commercial haulers if you don’t want to handle the trash. If you have a truck and don’t mind sweating, add in only the price of gasoline and landfill charges. Eave Gutter Eave gutters are installed with the appropriate downspouts, after the house is completed. Factory finished seamless aluminum is attractive and functional. There are contractors specifically in the gutter business. Irrigation System An underground irrigation system is installed after the topsoil is brought to the finished elevation but before the landscaping is started. In areas with ample rainfall, irrigation systems may not be necessary. There are contractors specifically in the irrigation business.



Landscaping Landscaping can be as minimal as a seeded lawn or as extensive as the calendar pictures of the Augusta National Golf Club. Landscape only after all the underground lines are installed and finish grading has been completed. Local landscape contractors will have many suggestions for shrubs and trees if you are short on ideas. Odds and Ends Fireplace doors and screens, towel racks, toilet paper holders, medicine chests, mirrors, shower rods and curtains or shower doors, closet rods, and shelves, and anything else that has not been mentioned needs to have a price and a subcontractor assigned to it. Contingencies Webster defines a contingency as a possible or chance event. A chance event in the construction business is a surprise. We’ve discussed surprises. They cost money. After you have selected all of your bidders and know that nothing has been forgotten, add a two-percent contingency estimate. If you are not that confident, add 5 percent. Your contingency fund should take care of whatever you did forget, because try as you might, you will forget something. Hopefully there will be enough left over for a change order or two. Builder’s Risk Insurance Until your house is complete and you have covered it with a homeowner’s policy, insure it with a builder’s risk policy. If your roof trusses are last seen at tree top level headed for the horizon, your builder’s risk policy will cover your loss. Believe me, stranger and more expensive things have happened. Subcontractor Credit Worthiness When requesting bids from subcontractors, also request credit references. Ask for names of lenders where the subcontractor has credit and ask for his permission to talk to them about his credit worthiness. Also ask for the names of vendors with whom he does business and ask for permission to question them about his credit worthiness. Your banker will request that you have your subcontractors sign lien release forms upon being paid. If he does not require it, or if you are paying cash, get them signed anyway. If you can’t get a lien release form from your bank, check with stores selling business forms or talk to your attorney.



Suppliers to your subcontractors can file a lien against your home for material used on your home, for which they were not paid. To remove that lien from your property you must pay your subcontractor’s supplier. Only do business with honest and financially sound subcontractors. Houses are expensive. Make sure you only pay for it once. Summary When people decide to build a home, grown men and women get as excited as kids on Christmas Eve. Everyone wants to know immediately what the cost is going to be and when it is going to begin. So go ahead and get excited, you’re entitled. But don’t let that excitement hurry you through the bidding process. When done properly, seeking bidder recommendations and putting together bidders lists takes time…time to determine that the people on your list are honest and capable. A beef brisket can be thrown on a broiler pan under high heat and cooked in an hour. You can then give it to your dog, if he’ll take it, because it won’t be fit to eat. A carpet pad would taste better. Take that same brisket, marinate it for twenty-four hours and smoke it under low heat for several more hours and it will be so good that you’ll call your friends. Think of the bidding process as that brisket. Checking out potential bidders and selecting the proper ones for the bidders list is the marinade. The slow cooking is making sure that each bidder on the list knows what is expected of him, and if awarded the job, is ready to perform. Taking bids is the backbone of subcontracting. Do it right and you’re well on your way to building your Dream Home, wholesale.



Chapter 6: Finalizing Subcontracts Evaluation You have now received all the subcontractor bids that you requested and it is time to evaluate them. Take one category of work at a time. Work in the order of the categories listed on the Home Cost Worksheet found in Appendix I. Spread all of the Footing and Foundation labor bids in front of you. Enter the low bidder’s name and bid when:

1. You are certain that he will be easy to work with. 2. You have thoroughly checked his credit. 3. You are certain that he can get the job done well in a timely manner.

More Checking While soliciting a subcontractor’s bid, you can often times tell by his demeanor if he will be easy to get along with on the job. If he is surly and refuses to bid on the job in the manner requested before he gets the job, you can bet that receiving the contract on your home won’t improve his disposition. If you didn’t scratch him from your list before you accepted his bid, do it now. Unless there’s a unique reason (he does exceptional work for next to nothing) that he is worth living with, you don’t need the stress. Most subcontractors that seem genuine before the contract is awarded are genuine from then on as well. But you can be fooled by a before-the-contract smiling face that turns into an on-the-job werewolf. A construction version of Dr. Jeckyll and Mr. Hyde. How to know? The best way that I know of is to talk to the owner of the last custom built home this contractor worked on. Custom built means that the owner had the home built to his specifications, either by subcontractors or more likely by a general contractor. If you are unusually lucky and find an owner/ contractor that used your prospective subcontractor, you will get the straight report on his job site demeanor.



Even if the questioned homeowner was not the general contractor, they still will be at the site looking the job over throughout construction. Through job site conversations alone, selecting fixture and paint colors and negotiating an occasional change order (even if done through the general contractor) will give the owner a good idea of which subcontractors are accommodating and which are not. When questioning about how easy a subcontractor is to work with, reassure yourself about qualification number three: quality workmanship done promptly. The same sources can answer both questions. Credit Depending on the lien laws in your state, you may have the unfortunate opportunity of paying for a particular subcontractor’s work twice. Let’s say you hire and pay a plumber for his work, but the judge is after him for back alimony. Instead of your check paying the plumbing wholesaler, it makes his ex-wife’s car payment. Sound familiar? It should, we discussed it in the last chapter. We’re going over it again because it is so important. The plumbing wholesaler’s credit manager probably won’t rip your toilet out of the floor, but he will file a mechanic’s lien against your property. After a lien is filed, everything else that happens is bad. Your lender will not release your financing until the lien is satisfied. That means you pay for the toilet out of your pocket, again. If the lien is filed after your permanent loan is closed, the lien holder can file for foreclosure. If the lien is not satisfied, then your home will be auctioned off to pay the lien. You don’t want to, but you can probably stand paying a hundred or two hundred dollars for a toilet, twice. But what about several thousand dollars worth of carpet? Lenders usually require signed lien releases from subcontractors before funds are disbursed. Even if your lender doesn’t, you should. If your lender doesn’t have lien release forms, you can find them wherever business forms are sold or you can talk to your attorney. One thing to remember, release forms do not explode when improperly signed. Dishonest subcontractors can write their name on a form without paying for the material, but the material vendor will still have lien rights. To make sure that you are fully protected, have the material vendor sign a lien release also. But what if he hasn’t been paid and refuses to sign?



Now you know why it is so important that you hire subcontractors who pay their bills. Request at least three credit sources from any subcontractor that you intend to use. Make sure one of them is a bank. If the bank has been doing business with this subcontractor for less than eighteen months, also talk to his previous banker. Run a personal credit check through your local credit bureau. Even if your subcontractor is incorporated, he still has direct access to company funds. If he is in personal financial trouble, then you can be sure that his business, if not already, soon will be too. If after checking, you find that this subcontractor is as accommodating as a good waitress, pays his bills before they are due and would rather lose a finger than put out poor work, then write his name and price on the corresponding worksheet blank. But what if you find out that this guy has developed a friendship with Jack Daniels during working hours? Two drinks and he’s a gila monster. Nobody wants to work when he’s around. Scratch a line through his name, suggest a good rehab center and repeat the qualification process with your next lowest bidder. Even if drinking on the job makes him happy as a clam, his work will suffer. Politely tell him good-bye. You find your low bidder had three liens filed on his last job. Don’t try to be his financial counselor. You can’t afford it. Go to the next name. But maybe the first person is a bit of a jackass on the job. He does great work and all the credit managers love him. Some workmen consider themselves to be artists. If his work is that good, you can probably overlook a mildly irritating personality. But remember, you may have to treat him delicately at times. If you are unwilling to do that, you better skip his name on the list. One warning: When you check someone out, do it thoroughly. Talk to more than one source. If you get a bad report on somebody, probe for details. The basis of a complaint could be as frivolous as an off-hand remark about an owner’s ugly wallpaper. Would such a remark be unthinking? Maybe. Impolite? Probably. But should that be the basis for eliminating a good subcontractor? Doubtful. Complete the worksheet by filling in each blank. Your construction cost is the total of the blanks. Don’t hire anybody yet. Your financing must be finalized and your building permit approved before you start spending money.



Utility Hook-Up Charges While some utility providers charge for the initial hook-up, some do not. Check with the power, natural gas, sewage treatment, and water suppliersto verify hook-up charges, if any. Interim Interest Costs As we discussed in “Chapter 3: Financing,” you will have interim interest on your construction loan. For estimating purposes, figure that you will pay for all of the concrete, framing, boxing, and roofing work the first month. The windows, exterior doors, siding, insulation, and half of the plumbing, electrical and HVAC bids will be paid in the second month. The remainder of the costs will be paid in the third month. Estimate that you will need to have the money to pay the first 25% of the bills borrowed for four months, the second 25% of the bills borrowed for three months, the third 25% two months and the final 25% one month. As an example use a total bid price of $200,000 borrowed at 7.5%. Twenty-five per cent of $200,000 is $50,000. $50,000 x .075 (yearly interest rate) = $3,750 .333 (which is the decimal equivalent of 4 months) x $3,750 = 937.50 Make the same calculations for three months, two months and one month. The decimal equivalent of three months is .25, two months is .167 and one month is .083. Then, to account for the delays that will most certainly occur, allow an extra month to complete the job. Take the total amount to be borrowed and multiply by .083 again. Add up the calculations and you have the total interim interest estimate. Enter it on the blank provided. If you are still concerned about not having enough interim interest included or if your home is more time consuming than normal, add in additional months of interest. If you are using any personal funds to finance your home construction, use the personal funds first. For instance, if you use $20,000 of your own money, pay the first $20,000 of bills with personal funds and estimate interest only on $5,000 for four months. Then make the rest of the calculations as described above. Don’t forget to include your building lot. If you borrowed to buy the lot and haven’t yet paid it off, or you plan on borrowing money to purchase it, add that to your interim interest calculations. Building Lot If you have purchased a building lot, enter the purchase price and closing costs in the appropriate blank. If not, estimate what you plan to spend. It’s always better to estimate



a bit high, just in case you find exactly what you’re looking for, and it happens to cost more than you’d anticipated. Enter the estimate on the blank. Total Cost The total sum of your construction costs, interim interest and building lot will be the amount on which your loan is based. Assuming that this amount is close to the figure you used for loan pre-qualifying, take your worksheet to your lender for his approval. If you already own your lot, authorize your lender to finish closing the loan. If you do not own a lot, start looking for one. Without real estate, your lender will not close your loan. But what if your final cost estimate is higher than your original estimate? Are you still within the qualifying criteria? If not, can you come up with a larger down payment? What if you can’t get qualified? Then your only choice is to take something out of the house to reduce the cost. If possible, make the design flexible so that (at a later date) you can install the things you had to remove from the plan. Let’s say you are able to get financed by reducing the price of the home by eliminating the fireplace. Do not build a fireplace, but provide the foundation for it. It will then be much easier to add on later. Sometimes, reducing the square footage of a home is the only way to make it affordable. However, if you do much more than cut a few feet from either end, you’ll need new bids from your subcontractors. Summary Use the low bids for your final estimate, but only after you are certain that you can get along with each low bidder, that he has a good credit record and most importantly, has a reputation for good work.



Chapter 7: Buying Your Building Lot Different families have different requirements for building lots. Closeness to schools may be important to one family, while a comfortable distance from the in-laws may be a necessity to another. Regardless of your specific requirements, all lot buyers need certain things. Zoning The first thing to check out when considering purchasing a lot is the zoning in that particular area. Your lot must be zoned for single-family residential construction. Zoning ordinances are written by local governments to define and restrict the permissible uses of land. Nearly every town and county will have some type of zoning ordinance. Zoning ordinances are written to provide a continuity to land use, growth and development. Why will you never see St. Mark’s Cathedral sitting next to “Marco’s Gentleman’s Club?” Zoning ordinances. The uses (or zones) are usually broken down into the following categories:

Agricultural (A zone) Residential (R zone) Commercial (C zone) Industrial (I zone)

Depending on the city or county, each of these zones is again broken down into two or more zones. We will use a residential zone as an example. Let’s say that in an R-1 zone you can build only single-family dwellings. An R-2 zone will allow duplexes and triplexes. R-3 is good for four family dwellings. Mobile home parks and apartments can be built in an R-4 zone.



In the previous example, you must buy a building lot in the R-1 zone. If you try to build a home on a lot that is not properly zoned, you will not be issued a building permit. Ask your zoning official for a copy of your jurisdiction’s zoning ordinances. In smaller jurisdictions the building and zoning official will usually be the same person. Since the labeling and categorizing of the zones may be different from the example, you should study and understand the ordinances that govern your area. You may find that a less restrictive type of zoning than that illustrated is found in your area. You may be able to build a single-family dwelling throughout the various R-zones or even across the spectrum of zones. Industrial use might be all that is really restricted. Know the ordinances of your area, since all jurisdictions have specific requirements and those requirements foster different ordinances. Where to Build Even if the city cares little about where you build, you ought to. Unless you plan to die in the house you build, don’t build next to a bowling alley,even if you are the defending town champion and you like to keep sharp by rolling a game over lunch. Someday you will want to sell your house. Buyers want to live next to other homes, not businesses. The only reason that most people will buy a home next to a business is because they can buy that house in that location cheaper than they could buy that house in a residential area. It doesn’t cost you any less to build next to a business, but when you move you’ll have to sell for less. So, you end up coming out the loser. Build in the shadow of other homes. Overbuilding For the Neighborhood Everyone knows that a home built in an area aspiring to win the Mayor’s “Best Kept Neighborhood Award” will sell for more than that same home built in a neighborhood full of chipped paint, tall weeds and broken windows. Homebuyers buy the neighborhood as well as the house. No matter how beautiful the home you erect is, the value of surrounding homes will affect the value of your home. Example: Two neighborhoods are equally well kept. The paint is fresh. The grass is trimmed like a golf green and there is not a cracked storm window in the bunch. The difference is that one neighborhood is full of $75,000, 1200 square foot bungalows and the other is full of $175,000, 2,000 square foot ranch styles. In which neighborhood do you think your 1500 square foot home will have a higher value?



A less expensive home draws value from its more expensive neighbors. A more expensive home is drained of value by its less expensive neighbors. Overbuilding or owning the biggest and nicest house on the block may be good for your ego, but come moving time, it’s bad for your bank balance. If you can afford the lot, not look too conspicuous, and stand the strain on your ego; build in a neighborhood where your home will become “the runt of the litter.” It will appreciate far more there than it will anywhere else in town. At the very least, build in an area with homes of a comparable or slightly higher value than yours. Orientation to the Sun A several thousand dollar outdoor deck can be rendered useless from June through August because of a burning late afternoon sun. Direct sunlight can cause intense heat to build up in any room with a large expanse of glass. Know how your lot is oriented to the sun and the affect that will have on your home. Plan accordingly. Restrictive Covenants If you are building in a rural area that is not zoned, remember that a broken down house trailer or a chemical plant may move in across the road. If the land is not zoned, it is fair game for any legal residence or enterprise. About the only way to protect yourself is to buy enough land to create a buffer between you and whoever or whatever might come in after you. Or you can buy where the use of the ground is governed by restrictive covenants. Like zoning ordinances, restrictive covenants are limitations on the use of land. While zoning ordinances are written by local governments, private property owners write restrictive covenants on their own property. Restrictive covenants can be imposed on a single piece of property by writing restrictions on the deed. When the deed is passed to the new owner, the property use is limited by those deed restrictions. You do not want to buy a building lot and then find that you are prohibited from using it as you intended. Here is a fitting deed restriction example: Urban sprawl is closing in on eighty acres of a farmer’s land. The wheat market is down and the farmer thinks staying current with the bank is a good idea. By taking advantage of the land’s proximity to town, he can sell a couple of five-acre building sites for good money, make this year’s mortgage payment and still have a few dollars left over for that quick Vegas vacation he’s been wanting. Since this is such a cozy deal, he thinks that it will be worth doing even when wheat prices are up. But suppose one of the lot buyers decides he’d like to do a little farming of his own and starts raising a few hogs? Who wants to buy a building tract within sight or



smell of a hog lot? The cozy deals and the Vegas vacations will be gone with the first squeal. To protect his unsold land and ensure future profits, the farmer decides to write a few restrictions into each deed that he passes. For starters, no hogs allowed. Chickens too. Might as well get rid of all ducks, geese, goats and sheep and limit each owner to two dogs just for good measure. That’s fine. A landowner can restrict by deed any use of the land to which he is passing title, provided that those restrictions are legal. A restriction against race, creed, sex or national origin is, of course, blatantly illegal and therefore an invalid deed restriction. However, barnyard animals have no rights under the constitution, and their keeping can be restricted at the will of the original property owner. But what if you wanted to buy one of those five-acre tracts, get out of town and breed English Setters. Sorry, the deed restricts the keeping of more than two dogs on the property. You can buy the land; but your reason for buying the land is restricted. Before you buy land to build on, make sure that your intended use of that land is allowed. Always ask the property owner what restrictions, if any, will appear on the deed. A title insurance policy should reveal any deed restrictions imposed by previous owners. Subdivision restrictive covenants are written by the subdivision developer and restrict the use of each lot within the subdivision. They are printed, filed and recorded with the plat of the subdivision. Some of the more common subdivision restrictive covenants are the definition of minimum home size, the requirement of a two car (or more) attached garage, and maintenance of distances between buildings that are more stringent than the building ordinance requires. For aesthetics, subdivisions served by a cable TV provider may maintain a prohibition on exposed radio and TV antennae. If you are a ham radio operator or a satellite dish owner, or want to be one, make sure your subdivision will approve. The Register of Deeds office at your county courthouse will have a copy of the restrictive covenants for each subdivision within your county. Make sure that you read and understand those restrictions before buying a building lot. Easements An easement is a right that one person or entity has in another’s property. The property owner grants easements. Once an easement is granted, unless it is for a specific amount of time or abandoned by the grantee (the one who gets the easement), it is there forever. In a subdivision, easements are what allow public utilities to bring water and power to your home. The developers dedicate a portion of land along one or more property lines



as a utility easement. That easement allows main utility lines to be placed where they can then serve each lot owner. If the easement is located at the rear of the lot, then two lots (backyard neighbors to each other) can be served at one time. Without utility easements, the utilities would have to be set in the street right-of-way at the front of the lot. Only one lot could be served at a time and the cost of service would be twice as high. If you have an easement on your property, you have granted the use of that property to another. You still get to maintain the property, like mow the grass. But you cannot impede the easement grantee’s use, such as build a fence across it or build a swimming pool over it. That shouldn’t pose a problem, because a platted subdivision will locate the easements along the property lines, and other than fence construction, you are prohibited by setback requirements from building along property lines anyway. But what if your rambling 4,000 square foot ranch style can only fit on a minimum of two lots? Just make sure that there is not an easement running along the common property line. Most lots have easements. Make sure that you know where yours are located and whether or not you can live with them. A lawyer friend of mine told me this easement story. He picked up a client over it. It seems that Skippy and Muffin (not their real names) received a twenty-five thousand dollar wedding present from Muffin’s parents. What better place to use their gift than on the purchase of a building lot, thought the happy couple. They found a lot that could accommodate their very upwardly mobile house plan. Although the back yard was a little tight, the price was a steal and all the setback requirements could be observed. Muffin loved it, and for Skippy that was all that mattered—well, that and the fact that he had gotten a heck of a good deal. The lot was, “For Sale By Owner,” so a real estate broker was not involved. The lot owner handed over a signed deed and abstract in exchange for Skippy’s twenty-five thousand dollar check, which the owner promptly took to his bank and turned into cash. Excited beyond words, the happy couple call Muffin’s parents at their Ft. Lauderdale seaside condo. Since in Muffin’s opinion, email photos can in no way convey the beauty of their new lot, her folks are finally persuaded to leave the warm sandy beaches and fly north. Straight from the 747 to Skippy’s BMW go Muffin, Mom, Dad and Skippy. Mom is already sniffling with a November runny nose, and Dad can’t figure out what can be so great about a one-third acre of dirt that’s worth missing out on his golf game.



Nonplussed, Muffin begins a glowing description of the lot and the love nest to be built there. “Exactly like Grandma and Grandpa’s,” she enthuses. Skippy wheels up to the curb just as Muffin begins her explanation of the backyard flagstone patio, at the same time a caterpillar tractor with Ernie’s Excavation stenciled on the door takes an industrial sized bite out of the spot where the intended patio is to sit. Not just one bite, but a trail of bites that dig up most of the backyard follow the Caterpillar. Thinking that one of his fraternity brothers hired Ernie as a prank, Skippy tells everybody not to worry. With the strut of a man who knows what’s going on, he heads for the driver. Muffin senses that all is not right when Skippy lies down under the tractor and motions for Ernie to run over his head. Since running over Skippy is not in Ernie’s contract, he asks Muffin’s dad to drag him out of the way so he can get back to work. Dad never really thought much of Skippy and at first hesitates, but after a, ‘you’ll sleep on the couch,look’ from Mom, he grabs Skippy by the collar and drags him to the car. A couple of self-inflicted head butts to the BMW’s bumper temper Skippy’s suicidal tendencies. He thinks that instead of killing himself, it might be better to kill the guy who sold him the lot. So he picks up a volleyball sized chunk of limestone from what is left of his lot and tosses it onto the passenger seat. Just before laying down ninety feet of smoking rubber, Skippy yells out the window to Muffin, “that low life son-of-a-***** sold us a lot with a fifty foot drainage canal easement across the backyard. I’m gonna cave his ******* head in.” To wind this story up, Skippy didn’t get a chance to kill the guy that sold him the lot. After he covered Muffin and the folks with tire smoke, he ran a red light and got T-boned by a truck loaded with Christmas trees. A man does a lot of thinking when his legs are in casts hanging from ropes. Skippy decided that civilized people do not kill those with whom they have differences. They sue, thus forcing them and their children into abject poverty instead. The case hasn’t been decided yet. But if Skippy had asked the seller for a title insurance policy before he paid for the lot, he would have saved his twenty-five thousand dollar purchase price, prevented several thousand dollars in medical bills, avoided looking bad in front of Muffin’s parents, kept his driver’s license, and saved whatever money my friend the barracuda charged him in legal fees. A title policy would have pointed out the easement. In fact, Skippy is lucky that the easement is his only problem. The previous owner could have mortgaged the property, then taken Skippy’s payment and sent himself on a world cruise.



When the mortgage is not paid off, it becomes a lien against the property, which allows the lender to foreclose on the mortgage. In which case, to keep the lot, Skippy would have to pay off on a loan he didn’t borrow. Or worse yet, the seller may not have owned the lot at all. Without a title insurance policy, Skippy could have been buying the Brooklyn Bridge. Whenever a bank lends money against a property, it requires a title insurance policy. Whenever a Realtor sells property, his contract requires a title policy as well. Skippy got into trouble because he paid cash, bought directly from the owner, and was ignorant to the necessity of title insurance. Don’t make the same mistake. Summary Investigate your building lot thoroughly. Consider the area of town and neighborhood that it is found in. Make certain you cover your purchase with a title insurance policy.



SECTION III: CONSTRUCTION



Chapter 8 : Construction Preparation

Now that you have selected your subcontracting team, bought your building lot and secured your financing, all you have to do is tell your subcontractors the address, and in four or five months show up with the furniture, right? Not exactly. It is true that picking good subcontractors is the key to a smoothly run construction job. But just as a car needs a driver to control it, a home building project needs the guidance of a general contractor. As the general contractor, your job is to make sure that every subcontractor performs each of his jobs on time and in the correct sequence. You are the job coordinator. Good coordination makes for quick construction time, happy subcontractors and a high-quality finished product. This chapter will outline the construction sequence as well as your responsibilities as general contractor and job coordinator. Permit If your building lot is within a building department’s jurisdiction, you must have a building permit before beginning construction. Remember from Chapter 2 the importance of establishing a rapport with the building department? Starting a job without a permit is the best way to ruin that rapport. It is also grounds for a fine in most jurisdictions. At the building department, your building lot will first be evaluated for the correct zoning and your site plan will be checked for the correct setbacks. If your town has a separate department that governs zoning, you may first be hustled over to that department to get your lot cleared for construction. Once your site plan has been approved, the building department will review your plans. Since as instructed in Chapter 2, you requested, received, and complied with a



preliminary plan review, the final review should be as easy as writing the check for the fee. Please do not ignore the lessons of Chapter 2. Make sure that your plans will pass the final review before you take bids. You don’t need the pressure of making plan compliances while having subcontractors calling every hour to ask when they can start work. Request a list of inspections that will be required and when those inspections will be required on your job. Make sure that you always alert the building department when an inspection is due. If you forget, and what was to be inspected accidentally gets covered up, then look out. Your job could be shut down and you will likely be required to perform an expensive tear out so that the site can be inspected properly. Pre-Construction Conference Getting your subcontractors together, introducing them to each other and explaining what you expect of them is called the pre-construction conference. Pre-construction means before the first shovel of dirt is thrown. The pre-construction conference is your first opportunity to be the boss. As general contractor, being the boss is your job. Volumes have been written on the psychology of team meetings: how to run them and make them productive. You need only to remember to keep the meeting on track. Keeping the meeting on track will keep it short and demonstrate that you are in control. As boss, you are the one who must be in control. What occasionally happens in meetings with tradesman -- or with members of any other industry group for that matter -- is that one member of the group, wanting to demonstrate his breadth of experience, will, in agonizing detail, recount one or more stories that make him out to be a hero, but contribute little to the purpose of the meeting. The others, not wanting to appear to be dolts, will chime in with their own tales of construction lore and a thirty-minute meeting stretches into two hours. The boss has shown little to no control over his subs, which means that he hasn’t done a very good job being the boss. It doesn’t necessarily follow that a pre-construction conference run amuck means that your new house will cave in after six months. You have chosen honest, capable subs to ensure that your home is well-built. However, a smoothly running job needs a boss to be in control at all times in order to keep things moving at a brisk pace. A brisk pace means a quick completion time. The less time it takes to build, the less you end up paying for interim interest. If you show that you are in complete control of the pre-construction conference, you set the stage for the remainder of the job.



Take charge of the meeting from the start. Tell the group that you know they are busy and that you want to keep this meeting as brief and productive as possible. Ask the group if they have questions for each other. The plans should clearly identify everyone’s job, however some questions may still arise. This is the place for eliminating uncertainty and nailing down responsibilities. You may also want to ask the group if anyone has a suggestion that could make the job run more smoothly. I say “may want to” because you also may not want to. The reason being, it is a personal invitation for the off-the-track stories we spoke of earlier. However, a helpful reminder from the finish carpenter to the rough carpenter about putting blocking at all the closet rod connections and towel rack locations could prevent a big pile of torn up sheetrock later. When asking for suggestions, be vigilant about keeping everyone on the subject -- building the best home in the most reasonable amount of time. Distribute construction schedules to each sub. Make sure the schedules are understood and the sequence is agreeable. Verify that each sub has been given enough time to accomplish their tasks. If there is any argument over the schedule, you are the boss and you ultimately decide if any changes will be made. You will be given a detailed construction schedule in the next chapter. Photo copy the schedule for your personal use. Re-type the schedule, without the general contractor notes, for your subs. The subcontractors present should include the footing and foundation contractor, flatwork contractor, rough carpenter, finish carpenter, drywall (sheetrock) contractor, electrician, plumber, and HVAC (heating and air-conditioning) contractor. These are the major subs on a home and the ones whose work is most dependent on each other. Count on an evening meeting. You’ll have a slim chance of getting everybody together during working hours. If you still have trouble getting everyone together for an evening meeting, don’t delay the meeting for more than a few days. Meet with those that can attend the group meeting and then meet with the others separately. Make sure that everyone gets a construction schedule Temporary Utilities During construction, you will need electricity and water at the site. Your electrician should provide you with temporary electrical service (verify this when bidding), which will consist of an electric meter socket, a circuit breaker box with a disconnect (a switch that stops the current flow) and 110v and 220v outlets, all mounted on a post. The post is either set into the ground or tied to a conveniently located utility pole. The electrical power supplier then ties the meter socket wiring to the main power supply, sets the meter and you have electricity.



Once your electrician sets the temporary service, makes an application to the electric company to tie it in, and sets a meter. The temporary service will provide power for the job until permanent service is in place for your home. Apply for a water meter. Since there is not usually temporary water service, you will need to mark the proposed elevation of your yard as closely as possible. The meter installers can then place the top of the permanent meter at the intended yard height. You’ll be charged if it has to be repositioned later. Have your plumber install a temporary water line with a hydrant. If there is a chance of freezing, have a freeze-poof hydrant installed. Identify the water meter and hydrant with a red flag to keep the ready-mixed trucks from running over them. Lawn fountains are nice, but not at this stage of construction. Summary Preparation. Preparation. Preparation.



Chapter 9: The Schedule The following is a construction schedule with time spans for each series of the construction process, not counting days lost to weather, illness or fishing trips. Construction times are based on a two thousand square foot ranch-style home with a basement and a two-car garage. Fill in the blanks with the proposed start date for the corresponding work shown. Since the construction times are in working days, remember to add time for holidays and weekends when you fill in the actual dates. PHASE 1 Date: __________ Set the construction stakes. Excavate for basement and foundation footings. Form and pour footings. Form foundation and basement walls.

Note: Rough in any water or sewer lines or any electrical conduit passing through or contained within the concrete walls.

Pour foundation and basement walls. Waterproof foundation and basement walls.

Note: If you are buying the material, have reinforcing bars delivered before the footings are formed. Either order the ready-mixed concrete before each pour or give your contractor the authority to order it for you. Make certain the building inspector is called to inspect whatever is required. Usually it is the unpoured footings and unpoured concrete walls.

Construction time: Approximately 10-12 working days. PHASE 2 Date: __________



Place the sand fill and reinforcing mesh for the floor slabs. Termite treat the sand before the slabs are poured. Pour the floor slabs. Backfill (loosely) the foundation and basement walls.

Note: Make sure the walls have cured seven days before backfilling. If you’re buying the material, remember to order the sand, reinforcing mesh and concrete and call for inspections on the unpoured slabs.

Construction time: Approximately 7 working days. PHASE 3 Date: __________ Install the interior bearing support (wall or beam) for the floor structure. Frame the floor structure and install the plywood sub floor.

Note: If a molded fiberglass shower or tub/shower combination is used, set it now, before the walls are framed. Both fixtures are too big to go through a doorway.

Frame the exterior walls, interior partitions, basement stairs and stairway, including blocking for tubs, showers, towel racks, closet rods, etc. Sheath the exterior walls. Set the roof structure and install the roof sheathing. Install the fascia board, edging, roofing paper and valleys. Shingle the roof.

Note: Order any material you are purchasing before it is needed. Call for the required inspections.

Construction time: Approximately 18 working days. PHASE 4 Date: __________ Install the windows and exterior doors. Rough in the electrical wiring, telephone wiring, cable TV wiring, plumbing, heating and air-conditioning ductwork and anything else contained within the walls or partitions. Insulate the walls. Insulate the ceiling if bat insulation is used. If loose fill or blanket insulation is used you must wait until after the ceiling drywall is installed. Install building paper over the exterior wall sheathing. Install the exterior siding and soffits.



Note: Remember to place material orders before materials are needed. Your electrical, plumbing and heat and air-conditioning subs should arrange for the inspections on their roughed-in work before the drywalling begins. Installing the building paper, siding and soffits can be done without interfering with any of the interior work. It should take from three to six days depending on the amount done. Because the interior and exterior work can be going on at the same time, don’t add these three to six days to the total.

Construction time: Approximately 10 working days. PHASE 5 Date: __________ Install the tub and shower bases.

Note: If you have a molded fiberglass shower or tub/shower combination it should already be set, right? Nail it to the studs.

Hang and finish the drywall. Insulate above the ceiling, if not done previously. Note: Have the drywall on the job before the drywall hangers arrive. Construction time: Approximately 10 working days. PHASE 6 Date: __________ Paint the exterior. Lay the bricks. Install the sectional garage doors. Install the permanent electrical service. Lay the water, natural gas and sewer lines. Paint the interior walls. Install wall paneling. Stain and varnish the woodwork – which includes the doors, trim, shelves, unfinished cabinets, etc.

Note: If space will not permit staining and varnishing the woodwork before it is installed, then the woodwork must first be installed, unfinished. Then it is stained and varnished. Then the walls are painted. Note: The exterior work can be done without interfering with the interior work. Depending on the number of bricks laid, a brick job can take two to twenty days. Sectional door installation will take one day. However, because of the overlap with the interior work, do not add that time to the total. Sectional doors can be installed and underground lines put in place while the bricks are being laid. The



permanent electrical service can’t be set until after the siding or the brickwork is complete at the point of the electrical service location.

Construction time: Approximately 10 working days. PHASE 7 Date: __________ Install the woodwork. Install the electrical outlets, switches and fixtures. Install counter tops. Wallpaper bathrooms. Set toilets. Note: Bathroom floor covering, unless carpet, must be laid before toilets are set. Install ceramic shower walls, back splashes and any other ceramic wall treatments.

Note: The woodwork installation and electrical work can be done before and during the other work listed above. However, the countertops, bathroom wallpaper, bathroom floors (if not carpet) and plumbing fixtures must be done in sequence.

Construction time: Approximately 10-20 working days. PHASE 8 Date: __________ Wallpaper remaining rooms. Install towel racks, closet rods, tissue holders and mirrors. Install outlet and switch cover plates. Install any other “end of the job” items. Lay remaining floor covering. Touch up paint smudges. Bring yard to final grade. Pour driveways, patios, sidewalks and any other exterior slabs. Build outdoor decks. Install underground sprinkler system. Landscape. Call for final inspection and occupancy permit. Schedule the moving party. Construction time: Approximately 15 working days. Total construction time: Approximately 80 - 92 working days.



Delays Even with the most meticulous scheduling, you will have some construction delays. Such as your plumber taking off during the rough in because the two-year-old of a regular customer flushed his blankey down the toilet turning said toilet into a mini waterfall. Emergencies happen. Don’t be too hard on your subs if they have to leave your job to service one. You may have an emergency some day, and you’ll want immediate service when you do. However, most delays can be avoided by better planning. Material shortages are an example. If the material is not on the job when it’s needed, regardless of whose responsibility it was to place the order, it should have been ordered sooner. Make sure that your subs understand that. And if you have material to order, pay heed to it yourself. Remind your subcontractors a couple days in advance of when they are to be on your job. Between the construction schedule and your reminders, there should be few delays due to a sub scheduling another job on the day that you need him. If for some reason a delay does occur, adjust the calendar days on your construction schedule. Speed vs. Quality Despite the continued harping about keeping the job moving, please don’t think you should sacrifice quality for speed. Time should be gained through crisp scheduling eliminating dead days, not by hustling a sub through a job just to get it done. When a sub is on the job working, he should be given all the time he needs to do the capable job that you are paying him to do. Just make sure that he is on the job when he is supposed to be. Summary Know what inspections are required and make sure that the building inspector is notified. Keep your job moving with attentive subcontractor coordination. Allow each sub ample time to do a good job but make sure he is on the job doing it. Good scheduling will save you money.



Chapter 10: Records

General contracting not only creates homes, but large piles of paper as well. Sometimes it seems like the number of trees killed to frame your home comes in second to the number of trees killed to document your home. Plans, bid forms, bills, worksheets, lien releases. What to toss? What to save? Where to put it? Taming the paper monster is as much a part of building a house as shingling the roof. A general contractor needs a system of organizing those paper piles to quickly yield information, such as: What has been paid? What must be paid? What is left to pay it with? There are bookkeeping and spreadsheet programs that can be adapted for these purposes if you are so inclined. If not, the low-tech (and job proven, I might add) alternative follows. House Estimate File Label a manila file folder, House Estimate. Within the House Estimate folder keep the completed Home Cost Worksheet, the bid forms of your chosen subcontractors and any worksheets you used to estimate the materials that you are purchasing. Unsuccessful Bidders File the unsuccessful bidders in their own folder. You may never open it again, but at least keep it until the house is done. Why? Because if you don’t, believe me, five minutes after the trash man leaves you will need something in that folder. Unpaid Bills As you receive bills, put them in the Unpaid Bill file folder. Bills should be accumulated in the folder until paid, then transferred to the, guess what? Paid Bill file folder.



Paying Bills Pay bills one day, the same day, each month. When requesting bids, tell your bidders which day of the month you will pay bills and up to which day of the month you will accept bills for payment that month. The tenth of the month works great for paying all bills received by the first of the month. By using the tenth, you have ample time to add up bills, determine the preceding months total expenditure, make a draw on your construction loan and write and mail checks. By being paid on the tenth, your subs will only wait ten days to get their money. However, if a bill is presented on the second of the month, it will not be paid until the tenth of next month. Paying bills one time a month rather than whenever they show up is a convenience for you. You only have to draw construction money once a month. And you only have to drag out your bill paying paraphernalia (which, with folders, record sheets, checkbook, stamps and envelopes is considerable) once a month. Your selected day becomes bill-paying day. Having a specific day set aside helps you stay organized and ensures that you will get the job done on time. Write a monthly reminder on your calendar about bill paying day. Your subcontractors owe you a good job. You owe them prompt payment as agreed. There is an exception to paying bills once a month. Material vendors sometimes discount your price if you pay your bill within a specific period of time. As an example: Your cabinet supplier offers a two percent discount on the cabinet price of $5,000 if you pay your bill within ten days of the delivery of the cabinets. If the cabinets are delivered on the fifteenth, you must pay by the twenty-fifth to take the discount. The discount is $100 dollars and ought to be worth the inconvenience of paying a bill out of sequence that month. A good way to decide if the discount is worth taking is to ask yourself this question: Would I spend the time drawing money and paying this bill, if I were paid $_____ (the discount amount) to do it? When you pay a bill, write the date paid, the check number used and the amount paid (if it’s different from the amount billed) on the bill and place it in the paid bill folder. If the bill is for partial payment to a subcontractor or vendor, staple a note to the corresponding bid form and enter the amount, date paid, and check number on the note. Enter successive partial payments on the note. The entries are a quick reference to ensure that you have been credited for past payments properly and have not been billed for more than you owe.



Checking Account Open a separate checking account for your construction project. Use this account to write checks for construction purchases (subcontractors bills, material, permits etc.) only. It will save you hours of time sifting through your household account looking for and adding up checks that paid construction bills. Even if your checkbook is entered into a bookkeeping program, I still recommend having a separate construction checkbook. Co-mingling personal money and construction money is a formula for disaster. Deposit the personal money you intend to use into the construction account first. After it is exhausted, deposit money drawn from your construction loan. Remember, only draw enough money to pay the bills owed. An extra $20,000 drawn at 7.5% interest costs you $125 dollars a month. Running Cost Record By opening a separate checkbook for construction expenses you have an automatic running cost record. Periodically total up the checks written for a quick reference of expenditures to date. By subtracting the current subtotal of checks from the amount of money you’ve allotted to spend on construction, you’ll know how much money you have left to spend. But will it be enough? Cost Reconciliation Record It should be… unless you forgot to include a particular expense on your estimate worksheet, or you spent more on wallpaper than you had first intended, or you decided to finish a basement bathroom (“after all, it’s cheaper to do it now”), or you made any other material substitution or change orders. To determine whether the balance of your construction money will cover the balance of your construction costs, fill out the Cost Reconciliation Record found in Appendix II. Enter each subcontractor expense item listed on your Home Cost Worksheet. Subtract the partial payments (if any) made to a sub from the total of the sub’s bid and add change orders (if any) to determine what you have left to pay that subcontractor. Refer to the notepaper clipped to each bid form to quickly determine what partial payments have been made to that sub. Go through your paid bill folder to make sure that you have not paid a bill that you failed to initially estimate. Also, if you realize that you have yet to pay an expense that you forgot to estimate, list it. When completed, the total of the “Left to Pay” column will hopefully be equal to or less than what you have left to spend.



Reconcile your costs each month so if you are coming up short, you’ll have time to either borrow more money or cut costs on what construction is left.

Approving Bills Before you pay a bill, make certain that you agree with the amount of the statement. If you are being billed for material, make sure that you have received the material for which you are being billed.

Freight Bills Freight bills listing the items shipped should accompany all material shipments. When material is received, you should check the shipment against the freight bill for shortages. If a shortage is encountered, correct your freight bill before signing it and notify the shipper immediately. Compare your corrected freight bills to the billings that you will later receive for that material. Make sure you are only paying for what was delivered to the job site. Retainage Do not pay off a subcontractor completely until you are satisfied with his work and his work has passed all building inspections. It is much easier to get a sub back on the job to take care of any errors if you have the leverage of owing him money. Do not arbitrarily hold out payment once a sub has successfully completed his job, just to save a little interest, but do use retainage to protect yourself. Also, we’re talking about the subcontractor’s job, not the completed house job. Example: once your foundation contractor has completed the foundation walls and they have been inspected and approved by both you and the building department, then he is entitled to be paid in full for the foundation work. Summary Keeping good records and having a running knowledge of the bills you have left to pay and the money you have left to pay them with will eliminate surprises at the job’s end. As you know, surprises on construction jobs are very rarely pleasant.



Chapter 11: Conclusion

The work is done. The bills are paid. You’ve paid off the construction loan with permanent financing. You have worked hard and a wonderful new home at a price substantially less than retail is your reward. It is not just your money invested in it, but also part of your life. . Take pictures of every phase of construction. They will make a scrapbook of great memories, and if you build another home, an invaluable source of information as well. Congratulations. You deserve it!



Appendix I: Home Cost Worksheet

Construction Staking: ____________ Excavation (includes backfill and final grade): ____________ Concrete: Footings: Foundation walls (including retaining walls): Slabs: Floors (including basement, garage and home): Drives: Porches: Patios: Sidewalks: ____________ Material (if not included above): Ready-mixed concrete: Rebar, rebar chairs and ties: Remesh: Fill sand: Miscellaneous form lumber and stakes: ____________ Termite Treatment: ____________ Rough carpentry: Material:

Labor: ____________

Shingling: Material: Labor: ____________ Exterior Siding: Material:



Labor: ____________ Windows: Material: Labor:

____________ Exterior doors: Material: Labor: ____________ Sectional garage doors: Material: Labor: ____________ Finish Carpentry (including interior doors and trim): Material: Labor:

____________ Cabinets: Material: Labor:

____________ Countertops: Material: Labor: ____________ Masonry (includes fireplace): Material (including steel firebox, damper and zero clearance fireplace, if any) Labor: ____________ Drywall: Material: Labor: ____________



Paint, stain and varnish:

Material: Labor: ____________ Floor Covering: Material: Labor: ____________ Insulation: Wall: Material: Labor: Ceiling: Material: Labor: Basement or foundation wall: Material:

Labor: ____________

Hardware (including rough and finish hardware on all doors, cabinets and windows, if not included elsewhere): Material: Labor: ____________ Electrical (including tying service into utility line): Material: Labor: ____________ Plumbing (including gas, water and sewer service): Material: Labor: ____________ HVAC: Material:

Labor: ____________

Telephone and Cable TV pre-wire and installation: Material: Labor:



____________ Appliances (including delivery): ____________ Eave gutter and downspouts: Material:

Labor: ____________

Outdoor deck: Material: Labor: ____________ Irrigation system: Material: Labor: ____________ Landscaping: Material: Labor: ____________ Trash removal (including land fill charges): ____________ Odds and ends (such as fireplace doors and screens, towel racks, paper towel holders, toilet paper holders, etc.) ____________ Contingencies: ____________ Builder’s risk insurance: ____________ Sales tax on anything not included above: ____________ Miscellaneous taxes or fees: ____________ Building permit (including any inspection fees and plan review fees not included in building permit): ____________ Building lot and closing costs: ____________ Interim interest: ____________ Total: ____________



Appendix II: Cost Reconciliation Record Amount Bid Amount Paid Amount Left Construction Staking: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Excavation: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Concrete: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Termite Treatment: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Rough Carpentry: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Shingling: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Exterior Siding: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Windows: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Exterior Doors: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Sectional Garage Doors: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Finish Carpentry: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Cabinets: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Countertops: ___________ ___________ ___________ Change orders: ___________ ___________ ___________



Amount Bid Amount Paid Amount Left Masonry: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Drywall: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Painting, Staining and Finishing: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Floor Covering: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Insulation: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Hardware: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Electrical: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Plumbing: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ HVAC: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Telephone and Cable TV: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Appliances: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Eave Gutter and Downspouts: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Irrigation System: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Landscaping: ___________ ___________ ___________ Change orders: ___________ ___________ ___________



Amount Bid Amount Paid Amount Left Trash Removal: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Odds and Ends: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Contingencies: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Builder’s Risk Insurance: ___________ ___________ ___________ Change orders: ___________ ___________ ___________ Sales Tax: ___________ ___________ ___________ Miscellaneous Taxes or Fees: ___________ ___________ ___________ Building Permit And Fees: ___________ ___________ ___________ Interim Interest: ___________ ___________ ___________ Total: ___________ ___________ ___________



Appendix III: Mortgage Payment Calculator

(For Every $1,000 borrowed)

Yrs 5% 5.5% 6% 6.5% 5 18.88 19.10 19.33 19.57 10 10.61 10.85 11.10 11.35 15 7.91 8.17 8.44 8.71 20 6.60 6.88 7.16 7.46 30 5.37 5.68 6.00 6.32

Yrs 7% 7.5% 8% 8.5%

5 19.81 20.04 20.28 20.52 10 11.62 11.88 12.14 12.40 15 8.99 9.28 9.56 9.85 20 7.76 8.06 8.37 8.68 30 6.66 7.00 7.34 7.69

Yrs 9% 9.5% 10% 10.5%

5 20.76 21.01 21.25 21.50 10 12.67 12.94 13.22 13.50 15 10. 15 10.45 10.75 11.06 20 9.00 9.33 9.66 9.99 30 8.05 8.41 8.78 9.15

. Yrs 11% 11.5% 12% 12.5%

5 21.75 22.00 22.25 22.50 10 13.78 14.06 14.35 14.64 15 11.37 11.69 12.01 12.33 20 10.33 10.67 11.02 11.37 30 9.53 9.91 10.29 10.68

To determine payment when loan amount is known: Divide loan amount by 1,000 and multiply by the payment figure found in the Mortgage Payment Calculator for your corresponding interest rate and length of loan. Example: You want to borrow $100,000 for 15 years at 8% interest. Divide 100,000 by 1,000 = 100. Multiply 100 by 9.56 = $956 which is your monthly payment. (Examples continued on following page)



To determine loan amount when payment is known: Divide your payment by the payment figure found in the Mortgage Payment Calculator and multiply by 1000. Example: You know you can make a monthly payment of $900. You’d like to borrow your loan for 20 years and the current interest rate is 10%. 900 divided by 9.66 = 93.167. 93.167 multiplied by 1000 = $93,167, the amount of your loan.



Index (remesh 46 aggregate 41, 45, 46 appliances 63, 65, 68 appraisers 14 architect 16, 17, 34 asphalt shingle 51 B.O.C.A 19 backfilling 40, 89 Backwater valves 65 Baseboard heat 67 basement 14, 15, 17, 18, 40, 41, 43, 44,

45, 46, 47, 49, 61, 62, 64, 65, 66, 88, 89, 95, 98

bid drawings 16 blocking 50, 86, 89 boundary survey 39 brick 57, 58, 62, 90 builder’s risk policy 69 building code 18, 20, 21, 23, 37, 51, 98 building department 17, 18, 21, 22, 23,

36, 37, 42, 66, 67, 84, 85, 96 3, 20 Building inspectors 20 building lot 14, 66, 74, 75, 77, 78, 79, 80,

82, 84 building official 20, 21, 22, 40, 41 Building Official 20 Building Officials and Code

Administrators International 19 building paper 18, 89, 90, 98 building permit 16, 22, 73, 77, 84, 101 3, 56, 57, 98, 99, 102 3, 16, 17 Carpet 60 carpet. 44, 60 Central air conditioning 67 central vacuum system, if any. 68 ceramic 57, 60, 91 Change orders 18, 102, 103, 104 charge accounts 26, 27 circuit breaker boxes 63 code book 21, 22

cold joints 43, 44 computer-aided-design 16 construction loan 24, 29, 30, 74, 94, 95,

97 construction schedule 29, 31, 86, 88, 92 construction staking 39 cost estimates 29 counter tops 56, 57, 91 crawl space 40, 41, 49, 61, 62, 65 cross section 17, 18 deed 78, 79, 80 deed restrictions. 78 dishwashers 65 doors 16, 40, 44, 52, 53, 54, 55, 56, 57,

60, 69, 74, 89, 90, 98, 99, 100, 101 draftsman 16, 17, 22 3, 58, 99, 103 ductwork 49, 67, 89, 98 easement 79, 80, 81 Eave gutter 68, 101 electrical 10, 17, 19, 63, 64, 66, 67, 68,

74, 86, 88, 89, 90, 91, 98 engineer 41 excavation 40 exterior elevations 17 Exterior siding 52, 60, 98 finish carpentry 48, 54, 57 fireboxes 58 Fireplace 69 Fireplaces 58 flashing 51, 63 flatwork 45, 46, 47, 65, 86 floor covering 60, 61, 91 floor drain 65 floor plan 16, 17, 63, 98 flooring 18, 48, 49, 50, 60 footings, 17, 41, 47, 98 foundation plan 17, 43 foundations 17 framing carpenter 21 furnaces 63, 65, 67, 98 furniture 16, 54, 63, 84



fuse boxes 63 garage 15, 28, 40, 45, 46, 47, 54, 58, 61,

63, 64, 88, 90, 98, 99 Garbage disposals 65 Gas lines 66 gas ranges 65 general contractor 9, 10, 11, 12, 21, 31,

33, 34, 37, 45, 59, 68, 71, 72, 84, 85, 86, 93

gypsum board 58 3, 57, 100, 103 hardwood 60 heat pump 67 Heating, Air Conditioning and

Ventilation 66 home loan 24, 28, 29, 30 honeycomb 42, 43, 55 House plans 14 housing expenses 25, 26 humidifiers 65 3, 66, 67, 74, 86, 98, 100, 103 ice makers 65 installment debt 27 insulation 18, 61, 62, 74, 89 interim financing 24 interim interest 74, 75, 85 International Code Council 19 International Conference of Building

Officials 19 irrigation system 68 joists 18, 43, 48, 49, 61 3, 69, 101, 103 lending institutions 14 lien 69, 70, 72, 82, 93 lien laws 72 Lift stations 65 lumber yards 17, 56, 59, 62 masonry 10, 58 material supplier 33 mechanic’s lien 72 Millworks 56 monthly obligations 26, 28, 30 mortgage 12, 25, 26, 30, 78, 82 mortgage pre-qualification form 30 outlets 17, 63, 64, 86, 91, 98 paint. 34, 59, 60

particleboard 49, 55 permanent financing 24, 97 plan review 18, 22, 23, 85, 101 plaster 57, 58 plumbing 10, 17, 19, 51, 65, 66, 67, 72,

74, 89, 90, 91, 98 plywood 49, 50, 52, 60, 89, 98 pre-construction conference 85 price per square foot 14, 15 Puddling 42 quarry tile 60 rafters 48, 49 Ready mixed concrete 41 Realtors 14, 29 refrigerators 65 registered land surveyor 39 remesh. 46, 98 restrictive covenants 78, 79 Return air vents 67 roof decking 18 roof edging 51 roofing paper 51, 89 rough carpenter 48, 52, 61, 62, 86 R-values 61 sewer main 65, 66 Shake shingles 50 sheathing 18, 48, 49, 50, 51, 89, 98 sheet vinyl 60 sheetrock 50, 58, 59, 68, 86 site plan 17, 18, 29, 84 skip troweling 59 stippling 59 stone 57, 58, 91, 98 stud walls 18, 61, 67 studs 48, 49, 50, 61, 90, 98 sub floor 49, 60, 89 subcontractor 10, 18, 22, 33, 35, 37, 38,

44, 45, 51, 52, 59, 61, 67, 69, 70, 71, 72, 73, 75, 92, 94, 95, 96

subcontractors 10, 11, 13, 14, 16, 22, 24, 29, 34, 36, 37, 38, 44, 45, 51, 69, 70, 71, 72, 73, 84, 85, 86, 92, 93, 94, 95, 98

sump pump 65 switches 63, 64, 91, 98 3, 25, 67, 100, 103



temporary financing, 24 texturing 59 title insurance policy 79, 81, 82 trash 25, 63, 68, 93 trim 9, 44, 52, 54, 55, 56, 57, 59, 60, 90,

98, 99 trusses 18, 49, 52, 61, 69, 98 3, 25, 27, 67, 68, 79, 89, 100, 103 Uniform Building Code 19 utility services 65, 66 Valley flashing 51 vendors 10, 35, 36, 37, 44, 69, 94

virgin soil 40, 41 Wafer board 49 washing machines 40, 65 water heaters 65 water softeners 65 waterproofing 41 windows 16, 44, 52, 53, 54, 60, 74, 77,

89, 100 wood shingles 50, 51 zoning 76, 77, 78, 84 Zoning ordinances 76


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