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House Build stage payment scheme?


cheeryble

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Hi

 

I have to talk to our prospective builder very soon to formalise our house build.

Presumably the main points should be set out on paper in duplicate....including the payment stages.

He is a very decent guy and has been throughly professional and energetic in our early dealings and I believe I have a very good price.

It will be on the basis of a price for the job with me providing kitchen and bathroom fittings and any extras.......for example I have asked for "cut mun" polished concrete floors, but an extra will be a few areas which will be tiled and some tiles embedded on the border some places.

 

Anyway though he's a good guy I'd like to know what would be a normally acceptable and fair scheme of payment stages and would be interested in any areas which can be a problem.

Naturally I'd like to keep the final payment as large as possible to get the place finished in a timely manner and also properly done to pass muster. Whats the best way? What have people regretted in their payments? In fact what have posters regretted in any way?

 

Thanks v much!

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If he is a pro, you should get a contract that will likely be in line what he normally does (for payment schedule).  Contracts are negotiable until sign-off though, so if you are uncomfortable with anything, bring it up (and don't be shy about it).  In my experience (to wit) a final payment of 10% is about the best you can expect.

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The wealth and range of experiences (the good, the bad and the ugly) will be interesting to follow.  I haven't had the patience or confidence in a local builder, to pull the trigger on a build .....yet.  

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If your builder is as easy going as you say, you could split you payments into 15 stages, which makes it easier for you to manage and ensures he gets something every 3 or 4 wks.

the usual 6 stage split of ground floor slab, First floor, roof,1st fix electric, rendering blah blah blah isnt accurate enough and can lead to rushing and doing pretty much everything out of order.

I am quite happy to call around and help you group all the different stages into a payment stage and thereafter giving each a value.

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IIRC we had 10 payment stages including an initial "get started" payment and a "final completion" payment. I don't recall the percentages. 

 

Doubtless Madam still has a copy of the contract filed, I'll see if she can find it.

 

In the end we ended up advancing on some payments (when all the Khmer workers got arrested for example), but we had no real issues.

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When I built my house the payments were split up by major completions, after the initial "down payment".  The builder for instance got his first payment when the foundation had been set, and then when the walls went up, etc.

 

What we did do was hold 10% back and paid to the builder then the project was 100% complete, this helped with cost over runs, since the builder knew that he was paying for those overages from his "funds"  

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Thank you kindly for your answers.

 

Bangkruatsteve:

Although he's a young man at 30 his father was a builder and may be on site, I got a detailed pricing for all areas of work, and he had plans drawn and submitted to the tesabahn all in a timely manner. He was recommended by a friend whose house he and his guys mostly built........but via a main contractor who my friend wasn't so happy with......funny enough to do with not finishing things properly which shows how essential a decent sized final payment is. This guy obviously enjoys his work and is hard working and amiable.

 

CanuckThai:

True there is a wide variety of satisfaction when a house is built and you must sort carefully but I think there are plenty of good ones.

 

Eye-catcher: 

Very kind offer thank you. Would love to meet and chew the build (you must know I'm in CM) though missus says we have to dig the first hole the auspicious day of 26th and builder would like to get paperwork sorted tomorrow Wednesday which is fair enough. SO you'll be most welcome to visit or meet for a coffee but doubt we could make it so quick?

In any case I'll add a couple of pics from the rough plans and explain some amendments so you get the idea.

 

Crossy:

Ever helpful thank you 

Love to see yr contract. Funny enough the missus took the initiative and downloaded a general contract form from the internet.

I think it only has the very basics and I daren't wake her she just got home from double night shift at Ram.

She also knows about the initial payment he's asked us to prepare she mentioned 100k which would be approaching 15% of this main part of the build.

Crossy I'm going to PM you the elec page of the pricing maybe you could give the once over. 

I notice he has allowed 250 baht each for supply downlights (example) ......this is a good sign as many local builders would be allowing for the 39 baht ones which are even used in most of the new condominium buildings. When I asked what brand of fittings he would supply he mentioned panasonic......unheard of in most Thai houses. (I had said I required plentiful and decent electrics, and will have to add to what looks like 12 walls sockets for this main bit of the house.)

 

Langsuan Man:

Sure the main thing is to hold a substantial amount for final payment when ALL work is complete, and be sure they know one is firm about this from the get go.

 

Pics below.

Please note that the two 4x4 areas......one internal, one roofed external.....bottom left on the floorplan are already built and the future additions behind them for store and Thai kitchen and bathroom are not included in this contract I'm keeping it in bite size lumps. You can see an empty area between the two structures. In fact the 3D view is to be amended the new build will be a little higher than the existing chalet, so the chalet's roof will be extended across the 2.5 or more probably 3m "gap" and fit to the wall of the new house whose own roof will just come out a metre over the lower chalet roof. This will allow a better quality of roof for the house with no unsightly join.....the chalet was originally going to just be a storage place with no house. This will allow a room to be built in the gap with barely more than a sliding glass door front and back as two walls, roof and floor will already be built. Study/exercise room or meditation room? Anyway that's not included just the roof to the new house and concrete floor in the gap. You'll notice lean to structures left side of floorplan these will come mostly to the new garden wall and in one case close to allow access and piping underground. The green area near these lean to bathrooms will be rather like an atrium (water plants etc?) which will give a nice look out from the bathrooms, main bedroom, and "gap" room. and maybe even get a hammock, and bring much more brightness than normal to the bathrooms.

The verandah roof and floor south of the the living room will be 2.5m  wide or more, bigger than shown and offering a nice view looking north over the pond and to the orchard area.

There is a roofed and floored double car port top right allowed for in the price but the drive will be down to us and probably just be poured stone for now.  Sorry about the bold I'm not shouting it just came.IMG_4459.thumb.JPG.07fc4add13565110461bbfad170c3151.JPG

 

 

 

IMG_4457.JPG

 

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4 minutes ago, sometimewoodworker said:

Do make sure that you have more than enough power outlets, better to have more than enough than to have snakes.

 

FWIW we probably have enough in our livingroom/kitchen with 30 doubles.?

30 in one room?

Is it the Palace of Versailles?

 

ps just remembered another plus point for the builder.......without being asked he has included a piped anti insect system under the house. How cool is that......hadn;t crossed my mind.

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The underfloor termite protection is not expensive so its bells and whistles. I paid for independent installer and it was still only 50bt m2 including the first pumped spray.

 

Your builder isnt called Bom by any chance? You are describing exactly someone I had to step into to help my friend sort out his house build in Nam Phrae...he judged the book by its cover which is always a mistake when finding builders

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1 hour ago, cheeryble said:

30 in one room?

Is it the Palace of Versailles?

 

No, I hate unnecessary snakes.

 

IMG_4650.thumb.JPG.10a7dc0764ff635d718a679a199b630e.JPGIMG_4651.thumb.JPG.ecac09f93d83b3ac33f10cc4529f4c79.JPGIMG_4652.thumb.JPG.ffb46a5212ff85ed49178ffd02c09e08.JPGIMG_4653.thumb.JPG.84db194d01003f4b25b80099c4c05db1.JPGIMG_4654.thumb.JPG.2e791c8b65fe6a319a2cdf0e8674fb2e.JPG

 

The workshop has quite a lot more. Than that.

 

IMG_4656.thumb.JPG.d36b274997dc77088a837fb92a0037d5.JPG

 

The main point is that as you are building building it is easy and cheap to install power points, probably only a couple of hundred Baht each, after you have built it is probably over 1,000 Baht each plus the making good needed.

 

Do we have more sockets than we will use in the livingroom? Probably, but we will always have a socket near where we need one.

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3 hours ago, Johan drc said:

What is the building cost per m2(excluding finishes- bathroom,kitchen,tiles,windows,doors etc) in Thailand as I am looking to build in Phu Ruea next year

It can be anywhere from 3,000 Baht per square metre to over 30,000 Baht per square metre. 

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The deal is done with five payments.

The first four payments will be in advance, the last on total completion.

the last payment is only about 7% of the total.

I said I would like to reduce the first four payments slightly and make the final payment on completion to 10%.

He said he's charging me such good price he can't afford to.

I asked where he would find the final money to complete the last stage, he said he will save it from the first four payments.

Knowing the guy, having been recommended, and having seen lots of his other work in stages in photos on his laptop, after a couple of hours of talking details I decided to go along with it, put ten thousand on the table and offered my hand to seal the deal.

First post will start day after tomorrow.

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On 8/21/2018 at 12:01 PM, sometimewoodworker said:

Do make sure that you have more than enough power outlets, better to have more than enough than to have snakes.

In which way is the amount of power outlets related to snakes?

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7 minutes ago, janclaes47 said:
On 8/21/2018 at 12:01 PM, sometimewoodworker said:

Do make sure that you have more than enough power outlets, better to have more than enough than to have snakes.

In which way is the amount of power outlets related to snakes?

 Snake is a colloquial term for an extension lead.

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12 minutes ago, cheeryble said:

He said he's charging me such good price he can't afford to.

That would worry me a bit although I can't say exactly why.

 

In any case, if you want to make sure things go well, you will want to be there to observe everything, if you can.  If you see something that doesn't seem right, make a note and talk to your builder in private at the earliest opportunity.  You may not believe how fast things can go the wrong way.

 

You should also inspect all materials he supplies or purchases as part of your deal.  Make sure they are the quality and quantity you expect.

 

Happy home building!  (although it almost always is not without at least a few issues)

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3 hours ago, cheeryble said:

First post will start day after tomorrow.

Excellent!

 

I have beer and popcorn.

 

Been there, got the t-shirt, enjoy!

 

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The first payment to over run stop the work, no arguments. Watch all the concrete pours and depths of pilings being done.
If they don't do as you want then again stop the work.
Watch the plumbing and electrics personally, check the work being done against other peoples guidance if you don't have personal knowledge.
All the money will be gobbled up at the outset with the easy work, groundworks and concrete. After that they can walk off, they don't have any interest in the finished article. Finishing work is labour intensive and doesn't pay for them.

Should you have a good run with the initial build then you may be set for a good go, any overun on the prices then like I say walk away and look for somebody else.

Use this forum for anything, there are loads of guys here that have see just about every scam out there.

Contracts mean nothing...

It will probably be a very stressful period, but eventually rewarding.....

Just my tuppence worth, don't be afraid to stand the job down and take a minute to review whats going on every now and then...

Sent from my SM-N950F using Tapatalk

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From another post I made

 

The local building supply company is building a new house and has had three different builders walk off so far. 

 

So it should always be more profitable for the builder to complete the job than walk of before it's finished, he should always loose money by not completing.

Materials paid on delivery or only just before, labour after it's done, the majority of the profits on completion. All and any due and future payments forfeited by walking away from the job. 

 

That way way when the builder walks off (because the time of the month, his wife runs off, he has got enough money to live on, his girlfriend complains, he's found a job that pays more, etc) you can complete the job for not much more than you originally decided.

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18 hours ago, cheeryble said:

He said he's charging me such good price he can't afford to.

 I asked where he would find the final money to complete the last stage, he said he will save it from the first four payments.

The last payment will be pure profit and a % of the others as well.

 

He will not be saving anything from any of your payments. 

 

Make sure that the workers are getting paid, because the gang boss may not be passing on the wages.

 

There seems to be an idea that money paid to a person belongs to him even if it should be passed on.

 

You should also be budgeting for food and drink (not alcohol) for the workers on a regular basis, though not every day. If you don't you will not get good work, if you do you may get good work.

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I agree with everything in your posts STWW.

I would have much preferred smaller payments and more of them, and at least 10% final payment.

As it turned out yesterday he had a contract with the payment schedule ready.

The first four payments are about

18%

28%

29%

18%

and final payment is 7 or 8%

 

This does seem to be front end loaded especially as the last 7 or 8% payment is set against doors, windows, kitchen and bathroom fittings (the last two will be fix only).

 

So having said I'd prefer lower earlypayments and larger final and him telling me his profit margin was very small and him having had the tables reversed before and having great trouble getting paid he wanted to be on the right (safe) side of the deal financially I had a choice to make a confrontation or not.

 

I had to weigh what I think is a very good price indeed.

I had to consider that every time I came up with a request like "all the electrics will be run in continuous conduit right?" he would find a photo of very neat looking conduit job from his huge collection of photos of past jobs. He said he does the electrics himself and I'll bet he does a good job.

On asking about the strength and quality of the metal roof allowed for in the pricing he came up with a photo of him and a couple of his guys walking all over a roof.....in fact I'm considering not going for Colorbond ....which would be an extra......and using his better quality standard metal roof.

HE has thousands of photos of jobs at various stages often with himself in the picture.

The nearly finished builds look damn good and it's clear he's done a lot.

He was honest that the job would take some time in the rainy season and the fact he does as much work as possible himself with a small crew, and when I asked if he had a tiling crew he could retile a condo floor for me he knew condoes require a surcharge to compensate for limited working hours and rubbish removal etc and from the top of his head gave me a price which was what I already knew it should be to the exact baht.

Add to that the experience of the friend who recommended him and I decided the perfect was the enemy of the good and to show a bit of trust, not start any bad blood, and accept rather than go back to stage one looking for someone else whose price would be higher and whose conditions for payments might be just as tight.

I'm coming towards 70, gotta keep things moving in this life or there won't be much life left to enjoy a nice abode!

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A good price can only be determined if you have a very detailed spec of what you are getting.

Remember you can pay 15bt kg or 50bt kg for dragonfruit from the market or Rimping but both identical.

 

Anyway if things are going pearshaped at any stage you can halt the job and changr horses.

 

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1 hour ago, cheeryble said:

The nearly finished builds look damn good and it's clear he's done a lot.

He was honest that the job would take some time in the rainy season and the fact he does as much work as possible himself with a small crew, and when I asked if he had a tiling crew he could retile a condo floor for me he knew condoes require a surcharge to compensate for limited working hours and rubbish removal etc and from the top of his head gave me a price which was what I already knew it should be to the exact baht.

That so far sounds quite encouraging. But you need to remember that in Thailand past, and even current, good work is no guarantee of future good work, for most workers 

 

There is only 1 person who I have complete confidence in (the man who built my Waterhouse). Others are trust but verify.

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Well a healthy gang of guys and the boss turned up this morning and look businesslike.

I checked boss knew a detail before he started laying out measurements (he did), warned them all about the dog.......who will be happy having entertainment the next months.......Wished them good luck with a wave worthy of Caesar before battle, and left them to it.

I noticed said boss was taking a first photo, he obviously likes having a really good record of his jobs. I like that.

 

ps I noticed his soon-to-be-signed contract included a clause giving a penalty payment to us each day the job goes over 5 months (so will hope for less). Also for what it's worth a 6 month guarantee on anything that ain't right after the finish.

I also find the wife has taken initiative and researched what to include in a contract and will be asking for some additions. Well done her.

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2 hours ago, cheeryble said:

ps I noticed his soon-to-be-signed contract included a clause giving a penalty payment to us each day the job goes over 5 months (so will hope for less).

That is more like a good idea than a commitment. I would not push the completion date too hard.

 

2 hours ago, cheeryble said:

Also for what it's worth a 6 month guarantee on anything that ain't right after the finish.

The guarantee will really finish the second you pay the final amount. Anything after that is pure good luck.

 

You or your wife must visit every day, probably best for you to go after work is finished for the day. Never believe that you can take time off during the build because that is when the mistakes happen, catch them soon no big problem, leave them a few days, not good or easy to fix.

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2 hours ago, cheeryble said:

ps I noticed his soon-to-be-signed contract included a clause giving a penalty payment to us each day the job goes over 5 months (so will hope for less). Also for what it's worth a 6 month guarantee on anything that ain't right after the finish.

I also find the wife has taken initiative and researched what to include in a contract and will be asking for some additions. Well done her.

I have never seen a builder complete on time.  In Thailand, I have never seen a builder make a penalty payment.  In your case, a New Year holiday will be included in the time frame and you won't see anybody for at least a week then.  Just sayin.

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