Inflated invoice when the builder has ordered building materials

[LarsEbbe]

This can be a matter of opinion. Not entirely simple no matter how you look at it. Another example, like the milk;

Had my car serviced this week, oil change. The engine holds 7.5 liters, the invoice says; 2 x 4 liters at 895 SEK each! What happened to the half-liter that was left over? It cost me over 100 SEK. I didn’t get the leftover in a can for future refilling. And would the workshop have agreed if I had brought oil from Biltema for half the price?

You don't really have the energy to fully care and you're a bit too well-off. It also costs to find the right workshop to hire if the next workshop is 50 kilometers away.

 

[Pontstone]

Dispute the invoice regardless and show the cost of the materials elsewhere. With a bit of luck, the craftsman would rather back down than risk having to spend a lot of time and resources on administration and documentation. Assumes you haven't paid everything.

 

[dudero]

Is it reasonable? If the craftsman has paid a price, you can't just price hunt for the best price and say that's what you think is the right price. However, he can show his invoice and discuss based on that.

 

[Pontstone]

Well... maybe it should be complemented with an incognito visit to the hardware store in question to clarify what discounts recurring craftsmen receive. If TS gets a better discount than the craftsman, there is certainly a basis for an interesting discussion.

 

[MaxPax]

Dispute the invoice regardless and show the cost of the materials elsewhere. With a bit of luck, the tradesperson might back down rather than risk having to spend a lot of time and resources on administration and documentation. Assumes you haven't paid everything.

Not a particularly smart advice. Would you pay the tradesperson's hourly rate for all the hours he/she "price hunted" all the materials for a construction, the time to travel all over Sweden to pick them up, or the transport costs to have them delivered? Moreover, the total chaos that would occur when Mr./Mrs. Carpenter has 5 projects running simultaneously and doesn't know when all the small details will arrive by mail or be delivered to the construction site. Isn't it valuable to be able to go somewhere and get everything you need "in one go," so the job gets done without stops and hassle?

 

[tornberg]

Why shouldn't a craftsman be allowed to make money? And where is it written that the craftsman should give their discount to the customer? When a store buys a product, the store adds a percentage to make a profit. Just like a craftsman who wants to make a profit. However, I think it's slightly wrong for craftsmen to "add" a percentage on top of the store price, as the craftsman already has a "profit" on the material.

 

[Pontstone]

Everything has a limit for what is reasonable and not. However, we should take into consideration that the craftsman claimed that his supplier had the best prices. TS emailed a hardware store in the same chain and got a significantly better price, as an individual. This suggests that the craftsman has not compared prices at all, or that he has a hidden discount at the hardware store in Lund which gives him extra cream. Okay or not, decide for yourself. However, if the craftsman promises that his supplier is the cheapest, and it is wrong, he can probably expect a complaint.

 

[mariatherese]

I've said it before and I'll say it again... the so-called housing price bubble largely stems from the fact that it's so darn expensive to build in this country! How can there be a housing bubble when, in 90% of our country's area, it's cheaper to buy a slightly used house compared to building a brand new one on an almost free plot?

900+VAT if you didn't get the material markups says a lot about what the markup is... and salary. You can get a relatively experienced civil engineer, including a license for calculation programs, etc., for the same price. And this from a consulting firm that has its not entirely negligible overhead + profit. Around a 10% markup on expenses is normal for consulting firms and covers the administration of invoices and expenses. Then there's no kickback, but the hotel is booked on the customer's agreement.

If we were many times more proficient or faster than our friends from the rest of Europe, that would be one thing. But in my experience, it's quite the opposite.

I also don't like the material markup thing. Whoever doesn't work for me when I provide the material can go and swindle someone else.

 

[Lollo J]

I recently extended my villa in Lund, cost about 900,000 SEK of which materials were 150,000 SEK. The materials were purchased by the builder himself from his nearest large building supply store. He recommended it because they "have the best prices." When I had to pay the builder's invoices, I received a copy of his material costs. He added 12% to all purchases.

Here is a price example. The extension was built with h+h blocks large, they cost 72 SEK + VAT each in the store. I bought 600 pieces. On the invoice, they had the price of 68 SEK + VAT + builder's surcharge 12%.

I thought it seemed incredibly expensive. A large builder should have low prices, 20-30% discount? If he also buys 600 pieces of the same item with direct delivery, the price should be another 10-20% lower?

So for fun I emailed another building supply store in the same group but in Malmö. On their quote, the price was 54 SEK + VAT + delivery cost.

I think the construction company and the building supply store have some kind of deal, the builder gets a bonus on the side for each material purchase without me, the customer, finding out. Either that or he is being deceived by the building supply store, which overcharged him.

Does anyone have a viewpoint on my theories?

That could be the case. We built a whole new house, but then all subcontractors were fair enough to inform us of the mark-up on materials (about 3-4%). Sometimes they didn't add any at all, and if I wanted to purchase materials myself, I could. I saved about 300,000 SEK just by buying materials myself from Bauhaus. After purchases of 100,000, I got a 12% discount there!

 

[dudero]

Why would a used house be more expensive than a new one? It's like saying new cars would be cheaper than used ones. Or am I completely misunderstanding you?

Markup on materials seems weird to me, but an hourly rate for shopping/picking up + kickback is reasonable and transparent.

 

[andreascarlsson]

I think it's completely fine that they have deals, it's not our business as consumers.

However, it's damn unfair that it becomes more expensive for you than if you had gone and bought the items yourself - *THAT is not okay!!

 

[tommib]

3% of 900000 is 27000... it's rare to see craftsmen miscalculate in that direction
Jokes aside, your "loyalty bonus" is a pure kickback and something that ultimately comes out of the customer's pocket. It's not your money you're using when buying materials for the customer.

 

[Mido11]

This is not news Svein, what is interesting is what you wrote in the contract regarding material purchases and mark-ups.

 

[mariatherese]

Why would a used house be more expensive than a new one? It's like saying new cars would be cheaper than used ones. Or am I completely misunderstanding you?

Adding a materials charge seems odd, but a fee for shopping/collecting + kickback is reasonable and transparent.

Yes, you do misunderstand me. A relatively new house is usually (marginally) more expensive than an old one. But if I compare building a new house on a plot that is almost free with buying a house that is 15 years old, that difference isn't reasonable. The difference should lie in expected renovation costs and the technical lifespan of the house. A house that is 15 years old and maintained according to standard doesn't necessarily have a much shorter technical lifespan compared to a brand-new one. Even a new house needs maintenance. And it doesn't really matter whether you build it yourself (taking all the risks) or let a house company do the job for you. You are still the developer with everything that entails.

In Sweden, it has been shown that it's basically only in a few attractive areas where it's profitable to expand instead of selling and buying a larger (equivalently used) house. This is despite all the costs incurred when moving.
In, for example, England, the opposite is true. It almost always costs significantly less to expand (with the help of craftsmen) than to buy a new house of equivalent size and standard.

But it's not so surprising when craftsmen have a practical hourly rate of 900 kr + VAT...

 

[Lollo J]

What is it you don't get? I only provided information about my new construction. So it's possible to remove the add-ons if you find the right supplier to negotiate with.