There is a not so "secret" secret on 30a. The pricing for the trades is way out of whack with the normal market.
My own view is that in the long run it will hurt some. For example, let's say you put something out for bid that in a market like Memphis or Nashville would have a cost of about $10,000. Expect down here that for some reason (yes I know supply and demand etc) the prices are higher.
That notwithstanding, the dynamic that many down here forget is that there is a long run. If you get bids back from three or four vendors and you get $20,000, $21,000, $22,000 and $53,000 for the same thing, what do you think you will say when a friend asks you who NOT TO USE or talk to? In the long run the $53,000 bid vendor is going to face difficulty. It happened in the last downturn and it will again. The highest priced vendors are the quickest ones to wash out.
What is the real dynamic of high prices? The home buyer!. A home buyer here contracts with an architect primarily to get them into the game. The architect designs a home and it gets engineered and then goes out for bid.
What incentive does a builder have to contract with an unknown or little known buyer of that final product based on how much he or she might save you on each sub contracted item? It is far easier for them to think that some trade will cost $X and mark it up 15-25% to the ultimate owner.
So when it comes time to build why would a builder argue too much against paint contractors charging 3 times Atlanta rates for simple painting just to jeopardize the potential finish date and final payments etc? The buyer has contracted for a budget and the builder will get the MINIMUM markup they require. So much the better to the builder if they get some things for MUCH LESS than they priced into the contract. Most contracts here are NOT COST PLUS. They are final turnkey price per square foot contracts.
It is kind of like healthcare. If you have insurance are your really going to shop for the lower cost doctors or just go where the insurance tells you to go?
There are alternatives and there are STILL good vendors down here managing for the long run success of their business.
Plumbing bids should be based on complexity of the FOUNDATION if it requires extensive pre planning for chases and stacks. In conventional there is not such a limitation. Secondly it should be based on NUMBER OF (by type) Fixtures to plumb and nothing else.
Here on 30a it does not feel like you can get that, but yes there are rational vendors.
Bid 1 - $18,900
Bid 2 - $25,900
Bid 3 - $13,100
Not all that we accept will be lowest price. We always go to a job site and watch a team work. We did select $13,100 because we watched them work and the bid was given based on expected concepts.
Let's Build Something Together Series
My own view is that in the long run it will hurt some. For example, let's say you put something out for bid that in a market like Memphis or Nashville would have a cost of about $10,000. Expect down here that for some reason (yes I know supply and demand etc) the prices are higher.
That notwithstanding, the dynamic that many down here forget is that there is a long run. If you get bids back from three or four vendors and you get $20,000, $21,000, $22,000 and $53,000 for the same thing, what do you think you will say when a friend asks you who NOT TO USE or talk to? In the long run the $53,000 bid vendor is going to face difficulty. It happened in the last downturn and it will again. The highest priced vendors are the quickest ones to wash out.
What is the real dynamic of high prices? The home buyer!. A home buyer here contracts with an architect primarily to get them into the game. The architect designs a home and it gets engineered and then goes out for bid.
What incentive does a builder have to contract with an unknown or little known buyer of that final product based on how much he or she might save you on each sub contracted item? It is far easier for them to think that some trade will cost $X and mark it up 15-25% to the ultimate owner.So when it comes time to build why would a builder argue too much against paint contractors charging 3 times Atlanta rates for simple painting just to jeopardize the potential finish date and final payments etc? The buyer has contracted for a budget and the builder will get the MINIMUM markup they require. So much the better to the builder if they get some things for MUCH LESS than they priced into the contract. Most contracts here are NOT COST PLUS. They are final turnkey price per square foot contracts.
It is kind of like healthcare. If you have insurance are your really going to shop for the lower cost doctors or just go where the insurance tells you to go?
There are alternatives and there are STILL good vendors down here managing for the long run success of their business.
Here on 30a it does not feel like you can get that, but yes there are rational vendors.
Bid 1 - $18,900
Bid 2 - $25,900
Bid 3 - $13,100
Not all that we accept will be lowest price. We always go to a job site and watch a team work. We did select $13,100 because we watched them work and the bid was given based on expected concepts.
Let's Build Something Together Series
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