CHAPTER XXXVII.
LOW-COST HOUSES.—METHODS OF MAKING CONTRACTS.—ARCHITECTS’ ESTIMATES.—BUILDING BY THE DAY.—THE SAFEST PLAN.—GUARDING AGAINST LIENS.
A low-cost, well-built house is sought by all. The cost of a house is largely a question of business management,—one of knowledge. Before considering the details of contracting for the building of a house, there are a few general points which should be mentioned. First, it never pays to make a contract to have a house built for less than it is worth. In order to get a good house, it is necessary that there be a margin of profit for the builder. Second, a good house from a constructive standpoint can only be built by competent mechanics. One may contract for the building of a house for less than it is worth with parties who are incapable of doing first-class work, and require a bond to secure the faithful execution of the contract. A contract or a bond cannot make a man do good work if he does not know how to do it. It will not save anxiety or trouble. It may indemnify against actual damages, but never against trouble and vexation; nor can it compensate for poor work done in building a home. This matter is mentioned because it is the fault of a great many people, who are inexperienced in building, that they are disposed to have work done for less than it is worth. It does not pay.
It may be remembered, however, that one builder may be able to build for less than another. One may have more energy, tact, or general ability than another. He may have better credit; may be a better buyer. The result is larger accomplishments.
In speaking of low-cost houses or cheap buildings, it is not to be understood that they are cheap or low-cost in the sense of being common or frail. I mean first-class houses at a relatively low cost; low cost in a business sense, the best for the money.
We often hear the statement made that one can tell nothing definite about the cost of a house until it is finished. One can come as near knowing what a house will cost, as he can to knowing what he wants before he begins. One can get prices on what he has in mind, if his ideas be expressed. He cannot get prices on the unknown. The expression of one’s ideas of a house is through plans and specifications. The fact that architects’ estimates are often too low is because the owner is not sufficiently informed in house-building to know what he wants until after the estimate is made. The owner usually expresses a price that he wishes to pay for his house before he expresses his idea. It may be well to illustrate this.
One who wishes to build goes to an architect with some sketches or prints, which he has been collecting, lays them down and says,—
“We’re thinking about building a house. We want something like this. Here are four rooms and a hall downstairs, and four rooms and a bath-room above. We want to build of wood, and wish to have the house warm and substantial. Can it be built for three thousand dollars? It’s all we have to put in it.”
“Oh, yes,” says the architect; and so it can. A good, comfortable, substantial house, from the plans indicated, can be built for three thousand dollars. The architect knows this, and says that the work can be done for that price. He is ordered to make the plans. In a day or two the owner comes into his office and says,—
“My wife and I were talking over the house last night, and concluded that we would like to have a bay window from the dining-room,—a place where we can sit in summer, and put flowers in the winter.”
“All right.”
“And she told me to ask where you were going to put a wash-stand downstairs. You know we will want some kind of a wash-room.”
“I hadn’t thought anything about that,” said the architect. “Nothing was said about it. I supposed that in a house of this size the bath-room was the only place where you would put a stationary wash-stand.”
“We have to have a place downstairs. We can’t go upstairs every time we want to wash our hands.”
Another two or three days pass. The owner visits the architect again. It is the old story. He and his wife have been studying the house question in earnest. They are educating themselves in house-building. The more they think about it, the more they want, all of which is perfectly natural and right. It is in the natural order of things. It is the way the world moves.
“We were talking about the house, and have about concluded that we will finish two front rooms upstairs in oak. What do you think it will cost?”
“If you use oak for all the wood-work, it will cost between forty and fifty dollars.”
“That isn’t much. We’ll have it.”
And so the house grows as the owners grow, a little every day. The next day it is a little more plate glass at a cost of fifteen dollars. Again, it is bronze hardware at an extra cost of twenty dollars. Then it is bevelled-glass doors in the china-closet, plastering in the attic, a tile vestibule, a porch off from the dining-room, and so on.
The three thousand dollars is exceeded, though probably by something less than the amount represented by the growth of the owner’s ideas. The architect had made a certain allowance for this development, though it was not possible for him entirely to foresee it. Of those who build, the ones who take the greatest interest in the house, those who think the most about it, are usually the ones who exceed their original calculations by the largest amount.
In building, it is important that the architect and the owner thoroughly understand each other before contracts with the builders are signed. The wants of the owner must be thoroughly understood, and carefully and accurately set forth. From the plans and specifications estimates for all parts of the work should be received, and the cost of everything known, before obligations are created. The process of making the plans and specifications, and taking the bids, is educational in its tendency. It brings to the owner’s attention nearly everything that he may want. Frequently he will find that the first estimates which he gets are higher than the amount he cared to expend. This is on account of his growth. He can frequently reduce the cost without positive injury to the original scheme.
We will consider how contracts are usually made. Sometimes it is by making plans and specifications for the entire house, and then asking for bids on the building as a whole. A general contractor makes his figures on the various parts of the work, then adds them together and makes a lump bid. If he is awarded the contract under such a system, he does part of the work himself and sublets the rest. Possibly he may be a carpenter; then he sublets the brick work, plastering, tinning, painting, etc., and, if possible, he makes a profit on all of these sub-contracts. It does not always happen that he makes figures on these various divisions of the contract himself when forming his original bid. He gets sub-bids from various mechanics and adds these to his own in making up a lump bid. It is known that there is a very wide range of difference between bids which come in this way. In a house to cost three thousand dollars the bids not infrequently vary twenty-five to thirty per cent. The highest bid may be over four thousand dollars.
Another way of contracting is for the architect or owner, as the case may be, to take bids on the various details of excavating, stone work, brick work, carpenter work, painting, plastering, galvanized iron and tin, glass, plumbing, gas-fitting, etc.; in fact, to detail the work as much as possible and receive detailed bids. If the work costs too much, if the bids run too high, one can locate the excess.
At times one can get a cheaper house by pursuing this plan. Another plan of building is by the day. Usually this means to employ carpenters and a foreman, take bids on the material that the carpenters use, and to sublet the mason work, excavating, painting, plastering, tin-work, plumbing, etc. Sometimes the mason-work is also done by the day.
Each plan has its merits. The first mentioned, of letting most of the work in one contract, is the one in most general use. It is common practice in this connection to let excavating, mason work, carpenter work, plastering, tinning, painting, and hardware in one general contract; then the mantels, gas-fixtures, furnace, plumbing, electric work, and ornamental glass work are let in separate contracts. It is difficult for one to specify gas-fixtures, mantels, and similar fittings, excepting by price. There is no satisfaction in this, for the reason that the owner or his architect may be able to make quite as good or even a better bargain than the contractor. Then there is no opportunity for the builder to arrange for a relatively high price with those who furnish this class of goods. It is fair for the builder to assume that he is entitled to a certain percentage for selecting and negotiating for such articles. The owner may save this for himself by making his own purchases.
Plumbing work is frequently separated from the general contract in order that the owner may exercise his discretion as to the workmen employed to do this important work. In such circumstances it is not altogether a matter of cost. It is of the utmost importance that the best of workmen be employed.
The articles which cannot be directly specified should be secured outside the general contract. Altogether, the plan of letting most of the work in one contract, as outlined, is the best and safest for those to pursue who are not thoroughly familiar with building operations.
The plan of subletting the separate contracts to the lowest bidders is not to be recommended to those without large experience. The difficulty in locating responsibility for delays is great. There is apt to be contention, annoyance, and sometimes loss, by this confusion. The plan of building by the day is more satisfactory for experienced builders than the one just mentioned, but it has the disadvantage of not fully representing to the owner before it is finished the cost of his structure.
In nearly every city or town there are a number of good builders, not well supplied with means, who will take a contract for building a house, work on it themselves until it is finished, and then take another, never having more than one or two houses on hand. One can frequently get good work from such builders at a much less cost than from large contractors. The larger contractors employ a foreman at about the same price a day that the small contractors expect to get per day out of their entire contract. Then, in addition to that, they receive their profits of ten, fifteen, or other per cent for their time and attention. Any one building with the help of the smaller contractors must be very careful, or he will get into trouble on account of the small margin of profit.
To recur to the method first mentioned. It is well that suggestions be made as to the course to be pursued in receiving bids on work, as classified in that suggestion. In the first place, there should be accurate plans and specifications made by an architect capable of doing that kind of work. Everything should be fully represented to the owner in both a positive and negative way; that is, not only as to what is to go into his house, but as to what is not to go into it. As soon as the architect or those in charge of the work begin to take bids, the owner should be provided with a complete copy of the plans and specifications, in order that he may be fully conversant with what is to be done. It was said that everything should be represented to the owner in both a positive and negative way. Not only should it be stated to him that the first floor of the house is to be plastered, but, if such is the case, that the cellar is not to be plastered. If the cellar floor is not to be cemented, it should be stated definitely to him in that way before beginning to take bids. If fly-screens are not included in the building contract, it should be so stated. Everything should be fully represented, and a record thereof placed before the owner, so that there can be not the slightest opportunity for misunderstanding or disagreement. Thus, if everything is presented to the owner, he will know what he is to have and what he is not to have, and his business will be done for him in a way satisfactory to all. When this is done, it is time to begin taking bids.
In doing this there should be no favoritism. The builder should be allowed to take a copy of the plans and specifications with him to his office or place of business, and keep them a day or more, in order to take off his quantities and become thoroughly conversant with everything connected with them. Then he can return the plans, and, while others are doing the same thing, he can compile his figures. Generally it takes about a day for each contractor to get through with a set of plans; that is, if five bids are received, it generally takes five or six days, assuming that only one set of plans is in use. No one should be asked to figure on a building unless the owner is willing to award him the contract, providing his bid is the lowest. Anything else is unfair. When all the bids have been received in sealed envelopes, the architect and owner may open them. After selecting the lowest, they may add to that figure the cost of everything not included in that proposition,—the furnace, mantels, gas fixtures, ornamental glass, and anything else that has not been included in the bid. This may be readily done, if the architect provide a schedule, similar to schedule “B,” of everything which may go into the house.
In the matter of closing the contract, only general statements can be made. Where an architect is employed, he will give proper directions; but, as many houses are built without such assistance, it is proper to make general statements which will assist in this work. There are forms of building-contracts, or articles of agreement, which may be secured from various regular sources. It is proper to fix the time of the completion of the work, which will vary in different parts of the country according to general customs. A house to cost from fifteen hundred to four thousand dollars may be very easily finished, under favorable circumstances, in ninety to a hundred days. Such houses can be built in less time, but it is best to give the builder at least three months. He will do better work in that time than in less. For the higher figure named, or for those which approach it, it may be better to allow even a little more rather than less time. As a price for liquidated damages in event of delay in completion, the rental value of the property is the usual sum specified.
There are various plans pursued in the matter of payments. Where there is an architect or superintendent, he usually issues orders on the owner for payment of material and labor furnished by a contractor less ten or fifteen per cent. Sometimes it is stated that two-fifths of the money will be paid when the building is enclosed and under roof; one-fifth additional when building is plastered, painted on exterior, all exterior appurtenances finished, the floors laid, and the house ready for other interior wood-work; and the remaining two-fifths when all work is finished. At times this apportionment is correct, and at other times not. However, it is a very good general rule. It is a good plan to add the ten per cent discount to it when possible. Sometimes an indemnifying bond is required of the contractor in order to secure the owner the proper execution of the contract. Otherwise the ten or fifteen per cent discount is relied upon to secure that end.
The lien laws in the various States make it very important that the owner, or his agent in the matter of building, should be very careful to see that the contractor pays all his bills, or secures releases from those who have furnished material and labor on account of the building contract, before money is paid by owner.
The law is different in various States, and renders the owner liable, under varying conditions, for material and labor furnished to contractor by others as employees or sub-contractor, even though payment has been made by owner to general contractor. Where a bond is not required, it is proper for the owner or his agent to exact releases in proper form from those who have furnished material and labor to contractor. The following form is in use by the writer:—
Work located
The undersigned, in consideration of the personal credit extended by to , Contractor, hereby consent that may pay to said contractor any sum that may be now owing to, or may hereafter become due, said contractor, on account of contract for the construction of the above works, and we hereby waive all rights to Mechanics’ Liens or other claims which we have, or may have, against said property, or owner, on account of labor or material furnished by us.
Indianapolis,1889.
It is the custom to furnish the builder with a number of copies of the above release before it is time for him to secure an order on the owner for money. As the architect is in a position to know from whom material or labor is secured, it is possible for him to know if the list of releases is complete. If not complete, the party refusing to give a release is required to make statement as to the amount of the indebtedness for material and labor furnished on the contract. The general contractor is charged with the amount represented as being due until the matter is fully adjusted. As an additional safeguard, the contractor is at times required to fill out and make affidavit to the following:—
Indianapolis,1889.
The undersigned, for the purpose of securing payment on account of contract with ——, for the construction of a —— house, known as No. —— on —— Street, situated on Lot ——, Out-lot ——, —— Division to City of Indianapolis, Marion County, State of Indiana, represents hereby that he has paid for all labor and material of every kind and nature had and procured therefor, excepting, however, that he is now owing the following sums to the respective parties hereinafter named for labor and materials for said building, and owes therefor no other amounts, to wit:—
In this connection it is not possible to consider all of the ramifications of the lien law. It is important to understand, however, that it is entirely possible for an owner to have to pay for part of or all of his house twice, if he is not careful in matters of this kind.