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.
HOW TO SECURE A HOME.