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Let’s “[b]assume[/b]” that I have purchased a lot and am now ready to hire a contractor/home builder to build my retirement home to my specifications. Everything is agreed to in terms of design etc. and we’re ready to go. Question:
What “[b]generally[/b]” would be the normal protocol as far as payments? 3 installments of 1/3rd? half up front half upon completion? You get me drift. Any thoughts? Thx.
Having built or assisted in building several homes in Costa Rica with five different builders I have to say that you should make your deposits as small as possible and pay the second payment only when you see progress.
Above all do not pay the builder for the CAJA or Insurance for the workers. Pay it yourself. Contracts are worth nothing here and one of the most prolific scams is when you allow the builder to make those payments for you. He’ll swear he paid them, take your last payment, and off he goes whistling a merry tune.
You only find out he did not make the payments when CAJA comes after you for them and you have no defense because the homeowner is ultimately responsible.
I am sure there are some honest builders but I have found every one of them pulls this particular trick. So be sure to reserve at least 20% to be paid after you make sure he paid all the bills and completed every part of the job.
Oh! by the way if you do not watch carefully you may find they put a 2 inch pipe going out of your toilet (which is why they have that little bin in all bathrooms for you to put used toilet paper in).
They also think that excrement flows up hill to the septic tank.
I had to make one builder redo the whole bathroom because of that.
They also have cold and hot taps on the left or right at random so you can never remember which one will scald you and which will freeze you in the shower.
I would have my builder create a schedule of values for the varying aspects and make weekly or monthly payments predicated on their completion, with photo’s or third party supervision. Run monies thru an attorney’s escrow account and let them handle weekly disbursements. Caja receipts are a must. Where are you building?
[quote=”clayton”]I would have my builder create a schedule of values for the varying aspects and make weekly or monthly payments predicated on their completion, with photo’s or third party supervision. Run monies thru an attorney’s escrow account and let them handle weekly disbursements. Caja receipts are a must. Where are you building?[/quote]
I haven’t 100% decided yet, however, in all likelihood in the Atenas/Grecias area with preference leaning towards Grecia.
Just wondering. I just finished the first of two here in Nosara and it went perfect. It always cost more than you expect so make sure you have good specifications and reasonable allowances. Good luck!
Any type of arrangement can be negotiated, we have built homes with 3 to 5 installments, depending on the owners income.
Agree with the last poster. 30 – 30 – 30% with the last 10% paid after a walk-through.
It is difficult to find out who the corrupt builders are due to defamation laws. Meet with local expats to hear the good things they have to say about their builders. We have friends who have paid for their house and can’t live in it due to all the problems but the builder has threatened them with a lawsuit if they mention his name. Its outrageous! We have to come up with sneaky ways of communicating which builder to use. Make a list of builders and just ask for “yes” votes?
I am happy to put together a list of Recommended builders and other builders with whom one should be extremely cautious with …
The problem always is how can I trust the information that I am receiving?
In the past I received negative reports about a Realtor but it turned out the “negative” reports were false and were coming to me from a disgruntled and very crooked competitor.
Scott
Scott,
I will be looking @ building a house in Nuevo Areneal over looking Lake Arenal on 3/4 acre lot and am looking for a good
builder and as you would say “not loosing my Camisa”
i would appreciate any recommendations you could give me.
I plan on getting started in August.Regards,
Chuck Major[quote=”chuck696969″]Scott,
I will be looking @ building a house in Nuevo Areneal over looking Lake Arenal on 3/4 acre lot and am looking for a good
builder and as you would say “not loosing my Camisa”
i would appreciate any recommendations you could give me.
I plan on getting started in August.Regards,
Chuck Major
[/quote]Send a PM to elindermuller Chuck – she’s a Realtor in that area – and I’m sure she’ll be able to recommend someone …
Scott
I’m now living in the mountains around San Isidro de General. In another year, I might consider building a home.
Does anyone’s now a builder in this area to recommend? Or to avoid?
I do business straight forward and build housing in the central valley on a cost plus 20% basis.
In my 30 years of constructing housing, I’ve found that this is the only method for the owners to obtain the type of dwelling that they are dreaming of.
I’ve never completed a project for a client that was built according to the original plans and specifications. There are always changes and additions, most of the time based on the owners personal desires and sometimes based on the property characteristics and mother nature.
During the past 20 years of building in Costa Rica, I’ve become a serious realist and enable my clients to achieve their housing needs. I never support unrealistic dreams or lie to my clients.
This allows me to remain friends with the owners after their construction has been completed. This friendship and my reputation are more important to me than money.
If you find a local contractor that you are comfortable with, I will be happy to provide construction progress inspections and reports which detail the work being completed by contractors on your behalf.
With my inspections, there will be no way that your contractor can cut corners and not provide you with the materials and labor that are specified in your construction specifications.
I have plenty of satisfied clients here in Costa Rica who are happy to provide recommendations.
If you would like to see photos of construction projects I’ve completed in Costa Rica, visit; http://www.CostaRicaHomeBuilder.com
While were on the subject of contracting to build a home, I thought this information about different types of contracts might be of interest to some of you.
Fixed Price Contract – a phrase used to mean that no bargaining is allowed over the price of the goods or services included in a contract. Fixed price contracts require significantly more time in advance, for all parties involved, to determine the price of each item to be included in the contract.
Additionally, each fixed-price item must be specified in an addendum to the contract in order to determine the exact value and scope of the entire project. Once a fixed-price contract has been agreed to and the contractor has begun the project, making changes to the contract and/or the materials and work specified, becomes difficult for all parties because the purpose of a fixed price contract is to establish a specified price and items to be included for that price.
Cost Plus – Time & Materials Contract – a standard phrase for a construction contract in which the buyer agrees to pay the contractor based upon the cost of all work performed by the contractor’s employees and subcontractors as well as all materials used to complete the construction; plus a percentage of all costs to compensate the contractor for his management and supervision skills.
With a cost plus contract, the owner never pays more to the contractor than what he receives and this keeps the overall costs manageable and predictable. Furthermore, it allows the owner to specify and change the building materials and installation procedures to complete the project up to his/her standards and personal tastes.
A cost plus contract is common when the original contractor abandons the work that was detailed in a fixed price contract, and the owner needs to locate a new contractor to repair damage caused by the first contractor and complete the remaining work specified in the original contract.
However, when this situation occurs, the owner has usually paid a substantial advance deposit to the fixed price contractor to cover payments for the purchase of building materials. This unfortunate situation causes the owner to absorb the losses paid to the fixed price contractor after he abandons the project.
Cost Reimbursement Contract – a contract where a contractor is paid for all of its allowed expenses, plus an additional payment to allow for a profit. Cost-reimbursement contracts contrast with fixed-price contracts, in which the contractor is paid a negotiated amount regardless of incurred expenses. Cost-plus contracts first came into use in the United States during the World Wars to encourage wartime production by large American companies.
Cost Plus Fixed Fee (CPFF) – contracts pay a pre-determined fee that was agreed upon at the time of contract formation.
Cost-Plus-Incentive Fee (CPIF) – contracts have a larger fee awarded for contracts which meet or exceed performance targets, including any cost savings.Cost Plus Award Fee (CPAF) – contracts pay a fee based upon the contractor’s work performance. In some contracts, the fee is determined subjectively by an awards fee board whereas in others the fee is based upon objective performance metrics.
[quote=”crhomebuilder”]………
Fixed Price Contract ………. to determine the price of each item to be included in the contract. Additionally, each fixed-price item must be specified in an addendum to the contract in order to determine the exact value and scope of the entire project…….This sounds like buying a car and expecting that the value of every single car part such as the tires, steering wheel, seats, every part of the motor etc. …are listed in the sales contract?
We do turnkey projects and add a list of details, but not the price of every single screw that goes in the roof. Yes changes are possible during the construction process, they however may cause an extra cost, or even a deduction of the original price, depending on what was taken out of the contract.
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