Price of OSB about gave me a headache.

[tpack]

I lucked out with our existing build. I’m ecstatic that I didn’t decide to go Cost Plus like so many people suggested. We’ve been under a Hard Cost contract with our builder since July. His invoice on the lumber package alone was 35% higher than when he bid it. Bottom line, he’s not making near the margins he had planned on our build.

Cost plus builder are loving these high prices. I think everyone deserves a fair profit, but if a cost plus builder is still charging you cost + 15% on a framing package that has gone up 100 % since covid started, thats BS.

[lnester]

Cost plus builder are loving these high prices. I think everyone deserves a fair profit, but if a cost plus builder is still charging you cost + 15% on a framing package that has gone up 100 % since covid started, thats BS.

Uhhhh, that's exactly what a cost plus builder should do. It's cost. Plus %.

The alternative is fixed price.

[tpack]

Uhhhh, that's exactly what a cost plus builder should do. It's cost. Plus %.

The alternative is fixed price.

That`s exactly why I wouldn`t use a cost plus builder when we built 3 years ago. When lumber has skyrocketed like it has in the last year, the cost+ percent needs to be adjusted for those items that have huge increases. The builder isn`t out any more money than normal and his profits go up drastically on all lumber related items. They could adjust their cost+ percent on certain items that have huge increases and still have a fair profit like I stated before.

I had a cost+ builder explain to me that cost+ was the only way that building a home was fair to everyone. With todays lumber situation I think the advantage leans heavily toward the builder. But that`s just me.

[cj7zrcool]

That`s exactly why I wouldn`t use a cost plus builder when we built 3 years ago. When lumber has skyrocketed like it has in the last year, the cost+ percent needs to be adjusted for those items that have huge increases. The builder isn`t out any more money than normal and his profits go up drastically on all lumber related items. They could adjust their cost+ percent on certain items that have huge increases and still have a fair profit like I stated before.

I had a cost+ builder explain to me that cost+ was the only way that building a home was fair to everyone. With todays lumber situation I think the advantage leans heavily toward the builder. But that`s just me.

What do you think the profit (gross or percentage) should be for the builder on the hook for a $300K+ house?

[Hoggslayer]

What do you think the profit (gross or percentage) should be for the builder on the hook for a $300K+ house?

$300k+$1.00

[cj7zrcool]

$300k+$1.00

I've been in the building materials side of the industry for a LONG time. You'd have to add a lot of zeros to that for me to GC a custom home and try to satisfy some of the incredibly loony clients that come up the pike. I don't think very many people realize exactly what goes into the whole process.

[tpack]

What do you think the profit (gross or percentage) should be for the builder on the hook for a $300K+ house?

If a builder was making 45,000 (15%) on a 300,000 build prior to the huge lumber increase in 2020, his fair profits could reflect the average yearly increases from the past couple of years.

If that 300,000 house that he built 1.5 years ago is costing 375,000 today, then he will be making $56,250 or $11,250/(25%) more profits, due to Covid related issues, not normal inflation . If some one thinks that is a fair profit increase, then go ahead and build. I personally would negotiate the cost+ percent or just not build until lumber comes down. But that`s just me.

[lostbrd]

I've been in the building materials side of the industry for a LONG time. You'd have to add a lot of zeros to that for me to GC a custom home and try to satisfy some of the incredibly loony clients that come up the pike. I don't think very many people realize exactly what goes into the whole process.

X2

[cj7zrcool]

If a builder was making 45,000 (15%) on a 300,000 build prior to the huge lumber increase in 2020, his fair profits could reflect the average yearly increases from the past couple of years.

If that 300,000 house that he built 1.5 years ago is costing 375,000 today, then he will be making $56,250 or $11,250/(25%) more profits, due to Covid related issues, not normal inflation . If some one thinks that is a fair profit increase, then go ahead and build. I personally would negotiate the cost+ percent or just not build until lumber comes down. But that`s just me.

So cost plus $45K is OK? I'm sure most builders would be just fine with that.

[tpack]

So cost plus $45K is OK? I'm sure most builders would be just fine with that.

The builder that I talked to was going to charge me cost plus 12% and I was still able to get a lot better deal with much better finishes(crown in 75% of rooms, 12' coffin ceiling, gutters and more). I am sure that I saved at least 10-12 dollars psf with a builder that quoted me a price with a contract that was exactly what I paid.

[Ætheling]

We are very fortunate. Foundation was just poured today on our new home. Luckily we signed contract for materials back in October. Doubt they will make much profit if any on our home.

[RutnBuk]

I've been in the building materials side of the industry for a LONG time. You'd have to add a lot of zeros to that for me to GC a custom home and try to satisfy some of the incredibly loony clients that come up the pike. I don't think very many people realize exactly what goes into the whole process.

You hit the nail on the head. I just finished my last custom, forever. I used to only do spec’s but somehow got into customs. What a pain in the *** they are. No more for me.

[Mudslinger]

Really glad we found or forever home on acreage as opposed to buying land and doing a Barndo with me doing 99.99% of the construction on it! Not sure my back and the price increases could have weathered the changes! No reason that I see for these increases except for price gouging by some.

[Cookiemonster1]

Mudslinger I believe it is real and is only getting worse. Cant even get some materials period. Concrete and doors are the next things that are possible issues.

[MacDaddy67]

I bought 16 sheets for $80 total....

They were made for a flower home and garden show, full sheets.....just had to unscrew them from the metal framing....
Then I turned around and sold the framing for $100...

Felt like I hit the freaking lottery