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flat fee

The Flat Fee contract continues to be the most popular and the most economically advantageous with TOBYCO clients. It gives the client and their lender the most control over project spending and assures them the most financial safety:

A line item project budget is generated. Each line item entry is an actual estimate/proposal by each individual subcontractor and material supplier; each is disclosed to the client for their review. An additional general contract fee is negotiated with the client. There are no additional entries for contractor’s overhead, additional management fees, profits on sub-contracts, etc. That contract fee remains the same even if/when the client exceeds the budget with changes, additions, and/or more expensive or higher quality products. The client pays all sub-contractors, material suppliers, and construction manager directly. The FLAT FEE option is ideal for the involved or hands on clients desirous to select their finishes and fixtures as the project progresses.

COST PLUS SERVICE

The Cost Plus is the most popular and economically advantageous among construction managers. It is simply the cost of the project plus a percentage of the total costs to the contractor. TOBYCO offers the cost plus option with similar properties to the above: The line item budget is generated (cost) and a percentage is negotiated and line itemed for the contract (plus). The client still pays all sub-contractors’/material suppliers’ invoices and construction management contract fee directly. However, at each progress payment to the manager, an accounting of ‘costs to budget’ is necessary as to determine any additional percentage owed to the contractor. This option is more complicated, often confusing, and ultimately usually more expensive. In addition it typically creates ‘challenges’ for a lender and client when requesting/releasing vouchers, draws, checks.

general contract

TOBYCO Builders offers the General Contract. The general contract has been the oldest and previously most commonly used by contractors. The client requests a fixed dollar amount from contractor(s) for the construction of their home or project often referred to “as a bid” price. It is also the form of contract that has help feed the negative reputation of the “contractor”. The client has no idea what or how the contractor has included in his pricing other than “as per plan”. The client simply receives line item allowances. The contractor can then charge at will for any upgrades above those allowance figures and/or what was stated in the plans. The contractor, most often too, entitles himself to a change order fee and a percentage of the resulting change order costs. In addition, the client/lender releases large sum of monies to the contractor in trust that he pays sub-contractors and material suppliers. Notably, when clients’ opt for the General Contract, TOBYCO works very intently with the client causing them to choose specific finishes, qualities, and fixtures including manufacturers, models/numbers, etc to assure more accuracy of the general contract.

fees & payment

Fees or payments are paid to TOBYCO in 11 progress payments; an initial 10% of the fee (includes deposit and preliminary progress to project start) and ten progress payments ranging from 5-15% each or as mandated by clients’ lender. Budget, progress payment, and material description forms are derived from former Mid-State Bank Construction Loan Set Up Documents and have been accepted by most lenders.

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