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RE: RESIDENTIAL: "Reasonable & Customary Fees"

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I think it's difficult to use the percentage method for residential fees.
That usually works for commercial, but residential is completely different.
Realistically, we can ask, at the most, $5,000 for an entire house (framing
and foundation) averaging about 3,500sf. Our drawings are not extremely
detailed- but they're not lacking in information either. We just don't
include the obvious details. 
If it's a large custom home, the owner is more understanding and we can get
twice that, if necessary. The biggest issue that we have is that most people
won't pay for the framing- the architect provides enough information for the
contractor to build. So we get a bunch of calls for just the foundations. We
do them for around $1,500 but we really don't make any money on them,
because as we all know, to get to the foundation we have to start at the
roof w/ the loads. So we do the load calcs for the entire house, but we only
provide drawings for the foundation. We would ask more, but it's way too
competitive. 

 -----Original Message-----
From: 	Bill Polhemus [mailto:bill(--nospam--at)polhemus.cc] 
Sent:	Thursday, January 20, 2005 5:31 PM
To:	seaint(--nospam--at)seaint.org
Subject:	RESIDENTIAL: "Reasonable & Customary Fees"

We've talked about this a little bit off and on, but I want to step up 
my efforts to get residential work now that I have a few of them under 
my belt insofar as new code requirements are concerned. My first few 
jobs were "bargain basement" rates and I of course cannot afford that on 
an ongoing basis.

My understanding is that a "reasonable and customary" fee for this sort 
of work is 1.5 to 2% of the "constructed cost." Yes, I recognize that it 
is more reasonable to charge for the actual effort but (1) That isn't 
going to fly with most homebuilders or homeowners in our area who are 
used to having NO structural work done, and (2) I think using the 
2%-area figure is at best a great rule of thumb.

What I'd like to know is: 2% of what? If one uses that figure is it 
essentiall the construction cost of the home? The Market price of the 
home? The construction cost for JUST THE STRUCTURE of the home (i.e 
without electrical, plumbing, mechanical, architectural finishes, etc.)?

If so, what is a "good guess" as to the percentage of total cost 
represented by the structural?

(FWIW, I have some ideas along these lines but I'm really looking for 
"independent confirmation" of my own ideas).

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