Should I buy the materials directly?

Question

Hey,

I've heard people saying most general contractors will mark up on the materials and lie to you. Should I buy them myself directly? Or if I tell them exactly what materials to use and where to buy them, that's good enough?

Thank you in advance!

Sean Ridlon · Answer

I let a client purchase materials with the following stipulation:

The contract will contain a clause that states that all materials "unusable, unsuitable, or missing will incur an additional expediting fee of $85 per hour (portal to portal) and cost of material plus 10% profit and 10% overhead. Contractor is not responsible for material defects, delays in schedule caused by missing or unusable materials, or lead times of supplies. Delays caused by missing or unsuitable materials will be billed at the rate of $125 per start and stop. Additionally, the contractor offers no warranty beyond workmanship of labor on any material provided."

My standard mark up on material is 10/10, but trust me on this one, a contractor buying 2 million dollars worth of material a year from the lumber yard is getting this material at a much deeper discount than almost anyone else. I've seen clients attempt to save a buck by combining a military discount with a coupon at Lowes and I still beat their prices even with my mark up.

Matt K. · Answer

And when the material is wrong/cracked/defective whatever.... be ready to fix that yourself. The contractor isn't going to care/help and the people that sold it to you are less likely to care as much about someone who has bought 1k worth of stuff vs a contractor that spends significantly more and has for years...

Matthew Paul · Answer

As a contractor , I know what I need to make on a job . I will make the same profit  if not more if the customer buys the materials . And when the materials are wrong and I am waiting with 3 guys with nothing to do , we are billing the customer by the hour .

A professional contractor will figure out the amount of materials , and schedule the deliveries so things are staged right and the correct amounts arrive .

What most people dont understand is contractors dont buy bulk from Home Depot , they go to the supply house where they have relationships , yes they get a better price , and yes they mark it up to retail . Their loyalty to the supply house is to the contractors benefit , not the customers . Contractors do not sell labor , they sell a finished job . Contracting is a business , I dont know any businesses that supply materials to the customer  without marking them up .  Its not good business

Jimmy Dudley · Answer

Most contractors, charge a markup on materials. If you ask they will tell you what it is. I don't know any contractors who would allow you to buy your own materials. That mark up is part of how they calculate their bids. So you may save a some money on materials but you will give it up on labor.

Plus if you trust your contractor so little that you believe they are lying about material costs then you need a new contractor.

Matt K. · Answer

No, this is stupid. It'll come back to bite you if you do this. What you can do though is your market research so you know how much material (big stuff) should cost. If you arguing over the price of a box of nails... you need a new contractor or do it yourself.

Nicole A. · Answer

I personally think it will just be a PIA and headache to have to get the materials yourself. And then you might forget small items here and there. You'll find yourself making countless trips to the store, possible miscommunication on what to purchase, etc. Let the contractors deal with all that. That's part of what you're paying them for... If you find a reputable contracting company and the numbers work, don't worry about it.

Alex Huang · Answer

IMO buy the big stuff that matter more stylistically. For instance, the toilets, vanities, light fixtures, flooring, tile, backsplash, etc. I buy them and they leave them at the store for pick-up by my contractor as he needs them. You can build an order and get a bid on them through Lowes or Home Depot and save a nice chunk of change. Additionally, I buy gift cards at my local grocer with a credit card that gives 6% back on grocery purchases. Add that with the fuel points and it becomes a pretty penny.

Other things like hardware, sheets of drywall, etc, I just let my contractor take care of.

Cara Lonsdale · Answer

If you are going to buy the materials, you may as well serve as your own GC, and just hire the subs to do the work, and save on the expense of the middle man.  And just a tip.... if you are going through Home Depot or Lowes, take your materials list (at least $1,500) to the pro desk and ask for it to be run through the bid room for the deepest discounts.

In theory it makes sense to buy the materials to ensure the best price, but sometimes the GC gets deals on items because they have contractor accounts and buy more frequently....things like cabinets, countertops, paint, etc.  However, they mark it up as a way of profit for the job in addition to their labor.

You can request that your GC give you a labor only quote, and a materials list that you can go shop.  However, I think you will find that it took more time and effort to do all that than it's worth in savings.  The real expense is in the GCs labor.

If you are dealing with structural stuff and major renovations, then I would say that the GC is providing value as they know city codes and so forth.  In that case, I wouldn't run the risk of doing the project without the GC.

Steve S. · Answer

No trades person is going to do a job for free. And yes while they are going to charge you labor they will also charge you for the materials they use.

If you don't want to pay their fees talk to them. Ask if they're okay with you buying the materials. THEN ask which materials they want. For example I'm very particular about which type of screws I use. Personally I will always take robertson screws over phillips head screws.  If you're having a trades person and you're going to buy the materials they are going to work with, get them the materials they want and prefer to work with.

Now keep in mind that many contractors will get discounts on materials at many locations. So if you develop a good relationship with a trades person you can bring that up. Ask them what their cost is to you, or tell them that you will pay their costs and they need to provide you with receipts.

Dave Van Horn · Answer

@Arturo Borges

There was a good thread about this not too long ago

https://www.biggerpockets.com/forums/25/topics/498...

Should I buy the materials directly?

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