Residental cost plus building contract

[flyboy]

My wife and I entered into a "cost plus" contract with a builder to build our new home near Cincinnati, OH. He wrote up a typical builders contract and is getting a 15% commission on material and labor of the home building cost (minus cost of the lot) w/ a downpayment of 35K earnest money. We asked for an itemized price break down of what he thought it would cost to build our new 2400 sq ft home with a finished lower level of 1000 sq ft. He quoted on our contract that it would be $107 per sq ft and gave us a total price of $382K cost estimate to build our home. As we are three months into the building process (one month behind schedule) the bills and quotes from venders are coming in way over budget. Stone is $10K over, framing material is 11K over, septic system 5K over, permits 4K over all of which are out of our control (not like cabinets, appliance allowances, etc) and things he should have known the price of. This 2400 sq ft two bedroom house could end up costing us over $425K. Is there a limit to what we have to pay and what if we find that we can't afford this house any more or that it won't even appraise for that much for resale. So far they have paid $180K out of our building account loan (includes $80K for the lot) and it is barely under roof. There is a lot more to this story but those are the basic facts. What recourse do we have? What can we do or should we do at this point with two more months left in the building process?


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Flyboy

 

[I AM ALWAYS LIABLE]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by flyboy:
My wife and I entered into a "cost plus" contract with a builder to build our new home near Cincinnati, OH. He wrote up a typical builders contract and is getting a 15% commission on material and labor of the home building cost (minus cost of the lot) w/ a downpayment of 35K earnest money. We asked for an itemized price break down of what he thought it would cost to build our new 2400 sq ft home with a finished lower level of 1000 sq ft. He quoted on our contract that it would be $107 per sq ft and gave us a total price of $382K cost estimate to build our home. As we are three months into the building process (one month behind schedule) the bills and quotes from venders are coming in way over budget. Stone is $10K over, framing material is 11K over, septic system 5K over, permits 4K over all of which are out of our control (not like cabinets, appliance allowances, etc) and things he should have known the price of. This 2400 sq ft two bedroom house could end up costing us over $425K. Is there a limit to what we have to pay and what if we find that we can't afford this house any more or that it won't even appraise for that much for resale. So far they have paid $180K out of our building account loan (includes $80K for the lot) and it is barely under roof. There is a lot more to this story but those are the basic facts. What recourse do we have? What can we do or should we do at this point with two more months left in the building process?


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My response:

It's time to see an attorney. Run, don't walk !! There must be something in the contract that keeps the contractor from going a certain percentage over bid. This is outrageous !

IAAL



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