Considerations When Negotiating with Contractors For your Construction Project

As WBTV News has reported through their recent “Construction Corruption” series, there are 30,000 licensed contractors throughout the state of North Carolina. So far in 2019, 636 people have filed complaints to the state’s licensing board. Oftentimes home owners are losing tens of thousands of dollars and it’s on them to pay for any lawsuit with no guarantee of getting their money back.

These current statistics prove the need for an ADVOCATE when building a home or commercial institution – to keep from being “ripped off” by a contractor.

HOW TO SAVE MONEY ON YOUR CONSTRUCTION PROJECT AND AVOID OVERPAYMENTS TO BUILDER

When hiring a builder for the construction of your new home or commercial project, you hire a trustworthy builder whose background proves they can get the job done well. In most cases, a builder DOES act in the home owner’s interests, but not always. However, remember throughout the construction process, the builder will, first and foremost, act as its own advocate by representing his or her company’s interests over those of an owner or construction lender.

Before starting a construction project, builders submit a draw request (invoice) to owners based on work completed as of the invoice date.  The amount invoiced may or may not match work completed. This is particularly true for work pertaining to the start of construction for site clearing/grading, foundation and framing, which are complex components.  Owners, due to lack of experience, will routinely pay the invoiced amount, without knowing with certainty that the work billed for has actually been done or done in compliance with the plans and specifications.

In an actual situation (see invoice), Owners Construction Advocate confirmed an over billing by builder of $27,706 and the builder adjusted the invoice reflecting a $27,706 reduction. All turned out well for everyone due to OCA’s involvement.

However, in this case, if the builder would have defaulted after receiving the funds from the owner, the owner would have not only been out the amount over paid ($27,706), but also an equal additional amount ($27,706) to pay another builder to complete work originally billed for ($55,412 total). Serious scheduling delays will also be incurred at considerable cost.

THIS EXAMPLE SHOWS WHY YOU NEED OWNERS CONSTRUCTION ADVOCATE LOOKING OUT FOR YOUR INTERESTS!

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