We are paying a fixed price for all of the labor. If the actual cost of labor exceeds the contract amount, then the contractor is responsible for the excess cost. If the actual cost of labor is less than the contract amount, the contractor keeps the difference. The contractor is responsible for the labor related to the excavation, cistern, foundation, masonry, plumbing, electrical work, and roof. Changes made can reduce or increase the price of the contract. If we provide the materials on time and there is no natural disaster, the house should be done in 210 days (that's March 31, 2012). We get a one year warranty. The contract also includes a payment schedule, which included a payment due upon signing the contract.
We have to provide the supplies. The contractor will give us a list of supplies and the vendor he recommends, but we can use any vendor we want. If we want he will place the order and we just make the payment. By ordering our own supplies we are avoiding paying a 4% charge the contractor imposes for gross receipts.
That's it in a nutshell. What do you think?
It sounds like you guys would be in control of the finances throughout the entire process. I think that's not only a great deal but very smart. Good luck!
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