Browse Forums Renovation + Home Improvement 1 Dec 02, 2016 6:19 pm I am dealing with potential builder for an addition to the house. I decided to give them a go given that they stated that they have a 15% margin. This seems to be the standard rate in our area and is nothing too different to others. In getting their quote, the 15% margin is included but also they are charging for their management, supervision and administration of the project. This is around another 15% of the quote. I had expected that the 15% margin would included their fees. I would appreciate advice from other members on this - is this normal and a standard practice? As this is my first contract, my gut feel is that have tried to get it through based on my lack of experience. Faen Re: Builders Margin vs "Management/Supervision/Administratio 2Dec 03, 2016 11:32 am It's a tricky one to comment on without seeing the full contact. All cost plus contracts take a high level of trust from both parties. There have been stories of builders getting there contractors to submit inflated bills and making more on top of the actual costs than the stated magin. Generally its good to get an architect to administer that type of contract and sanity check all the costs that come in. That said there are also honest guys out there and having works performed on a cost plus basis can save you money over a lump sum contract where some unknown costs may be inflated to cover costs. There are pros and cons to both style of contacts, but to answer your question in my experience there is usually one flat margin I.e 20 - 25% applied to all costs and adminstration and supervision would be charged on an hourly basis. Hope that helps. Kind Regards James Mason www.renovationjunkies.com.au Thank you so much everyone. This all makes a lot of sense. I guess when you talk to a builder who butters up everything to look very polished, you get to start believing… 7 19871 Hi all, We are looking to build a new two storey house in western Sydney. Can anyone recommend a smallish builder to go with? We are trying to stay away from the big… 0 12724 I would never build with Fowler homes. I built with them in 2021 and till date maintenance issues are pending. All their existing trades and businesses don't work with… 14 109717 |