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Thread: Price agreed to but can't agree to contract terms...what to do?

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    Price agreed to but can't agree to contract terms...what to do?

    We have narrowed it down to the PB we would like to go with, we agreed on a price, but now we are at the next hurdle which seems impossible to pass. PB gave us a copy of the template contract that they use to review and upon doing so I found numerous things I was not thrilled with, were completely one sided, or were not in line with what we had agreed on. So I prepared a contract that had most of their language, plus some of my own and went into much more detail regarding the job, but they flat out refused to sign that one...I am willing to use their's but it has to be marked all over because it is so generic and vague. Now, I may just be picky because I work in law BUT I don't feel as though I am being unreasonable.

    One example:
    Their payment schedule is 40-40-15-5 (all the payments are due before the work is completed ("at the time of"). We want it to be payment AFTER the work is completed...why would we need to pay for work that hasn't been done. The PB said "that is how we finance your job"...Sorry, but they are a multi million dollar company - they should have enough capital to fund jobs and get paid after the work is done (which is only like a day or two later...)


    Am I being unreasonable?

    Do you sign the contract as is with your PB? Or did you negotiate terms?

    Thanks guys!
    No pool yet...will update once we sign the dotted line and begin construction :)

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    DaninFLA's Avatar
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    Re: Price agreed to but can't agree to contract terms...what to do?

    Hold back more money for final closeout. you wont know a lot till end, need money held to make sure they finish. find a new PB is my recommendation if they wont adjust. first payment at time of seems reasonable, but 5% at end is too low.
    Dan
    9,000 gallon in-ground Saltwater pool, plaster, cartridge filer, 1.0 hp pump, Hayward T-15 SWCG, TF-100
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    Re: Price agreed to but can't agree to contract terms...what to do?

    I already told them no way no how I am budging on a 10% retainage until everything is completed to our satisfaction...but I didn't know if it was unreasonable to want to pay them after the completion of each phase
    No pool yet...will update once we sign the dotted line and begin construction :)

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    DaninFLA's Avatar
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    Re: Price agreed to but can't agree to contract terms...what to do?

    i think if you are holding 10% you should be ok. 10% is an industry standard retainage.
    Dan
    9,000 gallon in-ground Saltwater pool, plaster, cartridge filer, 1.0 hp pump, Hayward T-15 SWCG, TF-100
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    Re: Price agreed to but can't agree to contract terms...what to do?

    We have quite a few members with recent pool builds. You may want to look through some of those threads in the Under Construction forum and send a private message to folks who have recently had pools built in your area. They will have the best information on what is standard practice in your area. You may also get some inside info on your builder which can help you decide whether to move forward with them or look for another one.
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    Re: Price agreed to but can't agree to contract terms...what to do?

    maybe a compromise is to allow the first two 40% payment to be at time of...then the last two 10% payment would be at the end of and after inspection/approval by you, etc. that allows you to control the last 20% of the contract price which should be enough to get things fixed and/or pay someone else to fix if your PB disappeared for some reason.

    another thing you can do to protect your self is require expensive mechanical items like the filter, pump, etc to be at your house if you have paid for it....instead of the PB keeping the equipment at his shop that you have paid for, have them keep it at your house in the garage, etc. you paid for it, so you can hold it till its ready to be installed. that's also standard practice in a lot of construction contracts that I have dealt with. if the owner has paid for materials, its stored onsite, not offsite.
    Dan
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    Pool School - Chlorine / CYA Chart; Pool School - Test Kits Compared;

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    Re: Price agreed to but can't agree to contract terms...what to do?

    Thanks guys. I am just wondering - when you had your pool built, did you negotiate on your contract terms?
    No pool yet...will update once we sign the dotted line and begin construction :)

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    Re: Price agreed to but can't agree to contract terms...what to do?

    Stop now and never, ever agree to 5 percent final draw. No way, no WAY!!
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    Re: Price agreed to but can't agree to contract terms...what to do?

    Check your state law, too. In some states there is a cap on how much a contractor can require as a down payment before services are rendered. In California it's 10%.

    If it were me I would get a different builder, as much of a pain as that is. If they're this stubborn over the contract, just wait until there's a problem they don't want to fix. Are you willing to gamble that they wouldn't rather eat the 10% than fix the problem? I wouldn't. How much would they argue with you that it wasn't really a problem? I would bet they've been burned waiting for their customers to be satisfied before collecting payment, which explains why they don't want to do it that way.
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    Re: Price agreed to but can't agree to contract terms...what to do?

    Think about it. You have NOT agreed on a price, because you haven't defined a finished job. Reboot this whole enterprise and TELL the PB what you must have. Let him price THAT on paper and either sign or walk away.

    IMHO, he has told you what he is willing to do and asked you what you are willing to pay for him to do it HIS way. Who is in charge here (IOW, who is paying for this)?

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    Re: Price agreed to but can't agree to contract terms...what to do?

    I am adamant that 40, 40, 15 and 5 is very risky. It first says to me that he needs working Capitol supplied by you. Not good. Almost any builder could walk away from 5 percent and that should scare you. You have nearly zero leverage to resolve even the most minor issue that made you unhappy. There are tons of builders in DFW, and I have no doubt you can locate another.
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    Re: Price agreed to but can't agree to contract terms...what to do?

    I did an Owner/Builder and what's interesting is that with only one exception all my subs accepted payment after the work was done. I assume these are much smaller companies (usually a couple of guys) than the pool companies and they were fine with this arrangement.

    I do a lot of negotiations with my job and here's what I would recommend. Identify non-negotiables, identify things you could live with and proceed. Where possible provide a "give" to them when you're "getting" something. I would however communicate that you are willing to walk.

    Lastly, this company doesn't have terms with their suppliers so they have to pay COD? THAT would concern me and I'd address it with them.
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    Re: Price agreed to but can't agree to contract terms...what to do?

    What my husband and I are proposing is 25-25-20-20-10 (excavation, gunite, decking, shade structure/kitchen, retainage).
    No pool yet...will update once we sign the dotted line and begin construction :)

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    Re: Price agreed to but can't agree to contract terms...what to do?

    that sounds like a good payment plan. like others said, red flags here with this PB. take the design and shop around a bit and see if you can find a better PB to do this work, with better contract terms. based on your scope of work, sounds like it is a very big (expensive) build, and I wouldn't want to put down 40% at the beginning. do yourself a favor and shop the design around and see what you can find. you are going to have this pool for a very long time, so a few more weeks to compare would be a good idea.
    Dan
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    Re: Price agreed to but can't agree to contract terms...what to do?

    I'm saying I would be Leary of a builder who operates like this as standard. Its the overall big picture that spooks me the most. If you must go with him, try for no less than 15 on the final draw. The more you can get the better. One reason I went with my builder is that his last was 25% and it stated in the contract the it was to be paid once job was done, and customer satisfied. You want as much leverage on your side as you can get.
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    DaninFLA's Avatar
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    Re: Price agreed to but can't agree to contract terms...what to do?

    totally agree Patrick. lots of pool builders in Texas I am guessing, shop around
    Dan
    9,000 gallon in-ground Saltwater pool, plaster, cartridge filer, 1.0 hp pump, Hayward T-15 SWCG, TF-100
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    Re: Price agreed to but can't agree to contract terms...what to do?

    We did shop around and this was the only PB that (1) would even respond to us (75% didn't bother getting back with us), (2) was willing to work with us on price and (3) seems reputable and their reviews on average are good.

    The price is $57,500.00, so yes, I want to make sure we are thoroughly protected for that kind of money! Aside from our home it is the biggest purchase we have ever made.

    - - - Updated - - -

    Quote Originally Posted by QingGuy View Post
    I did an Owner/Builder and what's interesting is that with only one exception all my subs accepted payment after the work was done. I assume these are much smaller companies (usually a couple of guys) than the pool companies and they were fine with this arrangement.

    I do a lot of negotiations with my job and here's what I would recommend. Identify non-negotiables, identify things you could live with and proceed. Where possible provide a "give" to them when you're "getting" something. I would however communicate that you are willing to walk.

    Lastly, this company doesn't have terms with their suppliers so they have to pay COD? THAT would concern me and I'd address it with them.
    That was my point...if they are a big company they should have the capital to get paid after the work. It isn't like they pay their sub's before they work, so why would they expect customer to do that. We are meeting with them this week to discuss all this, and are willing to walk if they aren't reasonable. I just wanted to check with the community of TFP to see y'all's thoughts.

    Thanks again everyone!
    No pool yet...will update once we sign the dotted line and begin construction :)

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    DaninFLA's Avatar
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    Re: Price agreed to but can't agree to contract terms...what to do?

    I would not be so sure about your third point about being reputable. that much front loading of payments is a big red flag honestly.

    the best source for finding a PB would be to ask around and find people that have built pools. I see a few pool threads in the construction section with people near Dallas it seems. I would post in that section with a thread title of "looking for PB near Dallas". I bet you will get some recommendations.
    Dan
    9,000 gallon in-ground Saltwater pool, plaster, cartridge filer, 1.0 hp pump, Hayward T-15 SWCG, TF-100
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    DaninFLA's Avatar
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    Re: Price agreed to but can't agree to contract terms...what to do?

    here is a pool built in Ft worth: New Pool Build - North Ft. Worth
    just north of dallas: New dig June 11th TX
    dallas: pooldv pool build
    McKinney: Yet another pool build in Texas
    dallas: New pool build DFW,TX

    you have a great resource here with TFP, use it! reach out to the OPs and get some insight/recommendations
    Dan
    9,000 gallon in-ground Saltwater pool, plaster, cartridge filer, 1.0 hp pump, Hayward T-15 SWCG, TF-100
    Pool School - Chlorine / CYA Chart; Pool School - Test Kits Compared;

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    Re: Price agreed to but can't agree to contract terms...what to do?

    Quote Originally Posted by Novcruisin View Post
    That was my point...if they are a big company they should have the capital to get paid after the work. It isn't like they pay their sub's before they work, so why would they expect customer to do that. We are meeting with them this week to discuss all this, and are willing to walk if they aren't reasonable. I just wanted to check with the community of TFP to see y'all's thoughts.
    Perhaps the you and the PB might enter into an escrow agreement for the funds? That way, the PB is assured the money exists and is available and you still retain the right to approve the disbursement of the funds contingent upon your satisfaction. I assume there would be fees associated with this type of arrangement that would add to your build cost, but it might help resolve lingering doubts about payment.
    Matt
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