Image Courtesy American Gables
..about this concept HERE:
From their website:
"Look at the advantages of building using the ****** system (just don't want the search engines picking it up, as I am not endorsing it) compared to the old way of building and see for yourself why it’s the winning system! With the old building system:
- The builder carries greater overheads under a standard contract – which you pay for.
- You won’t see the real costs.
- You are normally required to use the builder’s set trade contractors and suppliers.
- You cannot normally change your products or finishes during the contract.
- Premium prices will apply.
- Variations are seen in standard building contracts as being the “cream”.
- Variations are extremely common in the new home and renovation markets and you cannot shop these variations around to ensure a fair price.
- There is the perception that the owner is at the mercy of the builder once the contract is signed.
- Some builders have poor communication procedures, so you can feel like you don’t know what’s going on.
- There is a risk that the builder may discount the contract to win the job, with the hope of making up the difference with variation loadings and surcharges that you have little control over.
- As the builder directly controls and pays sub-contractors there is the possibility that standards of finish may be compromised to save the builder money.
- There are many instances of builders becoming insolvent, risking your investment.
- The builder works in partnership with you whilst still being responsible for all the duties of a normal builder.
- You get a fully QBSA complying contractual system.
- You enjoy the same warranty and insurance protection as standard contracts.
- You get a contract with all costs transparent – including what you pay the builder!
- You have freedom to shop the marketplace for the best prices and choice of finishes.
- You don’t have to worry about it being a “cost plus contract”, as prices are locked into individual trade contracts.
- You pay trade rates without variation loadings – ever.
- You have a builder that acts as your manager to protect your interests.
- You enjoy consistent communication on job progress.
- You benefit from formal job management procedures designed to reduce the likelihood of disputes.
- You can take advantage of discounts and bargains in a tight market by dealing directly with the supplier with the guidance of the builder.
- Your money works to maximum advantage because sub-contractors and suppliers price themselves extra competitively to get your work because you pay them direct – which means better cash flow for them.
- Your builder doesn’t profit by asking a sub-contractor to take shortcuts – in fact as the builder is responsible for the standard of works, he has reason to be tougher on those standards.
- Your investment is safe, because ******* removes the possibility of a builder becoming insolvent."
This is what is in it for the builder:
You are the perfect candidate for ***** if you suffer from:
- Poor cash flow
- High account exposure
- High BSA net tangible asset requirements
- High overdraft
- High vulnerability to disputes
- Not having sub-contractors tied properly to warranties
- High risk to profit margin
- Inefficient costing and management systems
- Lack of a marketing advantage against other builders
- Inappropriate tax bracket"
What I want to know is why would you participate in a system through which, as the builder, you lose all the opportunites to load in profit from the customer? (case in point .... my fireplace.... oh the lessons I have learnt!!) If the builder is no good with managing cash flow, has a high vulnerability to disputes, inefficient costing and management systems and a high overdraft....would you want him project managing your project?
Has anyone experienced this process? I would be SO interested in hearing from you.
A bit technical today... sorry.... but you are such a wonderful resource (I built my house on your advice, remember!) ... when in doubt, ask 'the bloggers'!