Home Building Tip #4 Paying your Contractor

Hello All!  As you work with your contractor, especially in the beginning it is important to ask him/her how he does his billing. Let me explain, every contractor will do this differently. Some contractors:

1. Bill you monthly through his/her business. You pay him for his workers, and the materials that he gets from the lumbar yard.

2. Front the money for the entire project, then bill you upon completion of the work.

3. Bill you monthly for his work, then you are responsible to pay each sub contracted service such as plumbing, electric, masonry, etc.

4. We were even told that a lot of people once they get their quote from their contractor they just give him the money and the contractor goes and picks out everything on his own. ( My OCD home decor, HGTV wanna be self would literally have an attack on this one how would they know the style, color, etc, oh i have anxiety just thinking of it, but hey every couple has their own preferences when building).

All of these can be okay, if you stay on top of it. In our experience we choose to do number one and  number three! I’ll give you an example: Our contractor gives us a bill at the beginning of every month for the work and materials that was bought from the month before. We write him a check directly to his business for the lump sum.  Then he pays then lumbar yard for the materials. No prob, right?? Here is where we want to help you form our experience. Every month you receive this bill ask your contractor for the breakdown of what was paid to his employees/workers, then have him give you the tickets that the materials were placed on at the lumbar yard or store items were purchased. This will help you in your budget spreadsheet we gave you a few posts ago in keeping track of what bucket the money comes out of.

Now, since we are also doing option three, i will explain. We chose to get all the itemized bills from our subcontractors such as painters, electrician, plumber, masonry work, flooring and install, tile work, and siding/downspouts/gutters, etc. The reason we did this is so we could keep track by the bills they gave us so we could make sure they matched their quote, and keep track of when we paid them so much to start the job and then the rest we needed to pay them upon completion.

No matter which option your builder does and what you choose to agree with,  make sure you see all receipts/tickets/ and know what was signed for what items. This house building process gets overwhelming as you are working, have kiddos, and trying to balance it all, as soon as you let your guard down, money can be taken advantage of in many situations, and one wrong calculation or missed amount can make a big difference when you get to the end of your home building. We hope these tips helps as you go through your home building process. Thanks for reading, and leave a comment or question below, and please share our post !

Thanks!

Shannon and Jamie

 

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