I have a new custom home to build at cost plus a fee. I am the GC and will be providing mostly construction management services. Everything will be subcontracted out and the planning and selection phase is already complete. There will be some additional preconstruction services throughout the build, things come up, but we’re doing most of that under a preconstruction services agreement.
My question is about setting my fee for the construction phase as a % of estimated construction costs. Are most of you custom home builders holding the same % fee that you used a couple years ago before construction costs skyrocketed, or are you giving clients a break in some way? For instance, it is no more work for me building a home with an $80K lumber and truss package than it was when the package cost $50K, so to be honest I feel guilty marking up the new inflated lumber cost. My client the homeowner is paying all the bills, they do not run through my business. The total estimated cost has gone up a LOT, so if I hold the same % margin I make a LOT more. Not a bad problem to have, but it does not feel right. Your thoughts?
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Have your bills gone up? Are you paying the same price for gas as you were a year ago? Bought a new truck lately? While I am very generous to my customers I still have to make a living and I can't do that trying to be the Salvation Army. Stick to your normal fee structure