Charlie:
… Maudlin in Spring. This is kind of an interesting question in the sense that it’s not really a problem, problem. What she asks is, “When meeting with a potential remodeling contractor, discussing the topic of budgeting and pricing, is it appropriate to ask them about their material pricing and mark-up?”
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Tom:
You can ask anything.
Charlie:
You can ask anything, it’s true.
Tom:
You can go to Walmart and ask the same thing. You think you’re going to get a straight answer? You’re not. They’re probably not going to tell you. I don’t even know if they’d know, because I know when I built, we didn’t mark up anything. If fact, they got to see all of the receipts. It really depends on the contract, how the builder is building it. Is he giving you a flat fee? Is he giving you a cost plus? It has a lot to do with the agreement you have with them, but unless you’re on a cost plus and you get privy to all the invoices, then you don’t have to ask them. You’re going to see them anyway.
Charlie:
Maybe that’s the answer to her question is to ask, “Are you doing this on a-”
Tom:
Well, they should know the contract they signed, but most people sign a flat fee, and if it’s a flat fee, no, it’s none of your business. Remember this, on a flat fee, if they don’t do their numbers right, they have to eat it, too, so they could lose just as much as you’re worried about, but you trying to buy materials cheaper than them, you’re not going to save any money.