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Brian, Architect
Category: Home Improvement
Satisfied Customers: 2153
Experience:  Licensed Architect- 17 years, L.E.E.D. AP
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Im building a house with a construction loan. The Contractor

Customer Question

Im building a house with a construction loan. The Contractor has to line item everything including his profit. He is saying that the difference between his estimate and the actual cost on any line item if less is his money even though there is a contingency fund if he goes over. I disagree when his profit is in the line item and there is a contingency fund if he goes over. What do you think?
JA: I'll do all I can to help. How long have you been dealing with this?
Customer: Construction has not started.
JA: Do you have fuel in the tank? If so, is the shut-off valve open and the fuel clean?
Customer: this has nothing to do with my question!
JA: Do you plan on doing the work yourself?
Customer: NO! I am dealing with a contractor
JA: Anything else we should know to help you best?
Customer: No, What is your opinion on my question?
Submitted: 1 year ago.
Category: Home Improvement
Expert:  Rick replied 1 year ago.

Welcome to Just Answer, my name is ***** ***** I will do my best to help you with your issue. If my initial response doesn’t answer your question then let me know and we can continue our conversation.

Sorry about the irrelevant questions from the intro assistant. This is a matter for negotiation. Generally the contractor only gets the benefit of lower actual cost when he gives a fixed firm price. The type of contract you seem to be describing is a cost plus contract. In a cost plus arrangement the contractor makes a percentage over the actual cost.