Quotes
Builder Quotes: How to Avoid Unanticipated Cost Blow Outs
Every building project needs a set of plans. The better the details and instructions on these plans, the better your build and tighter your quotes!
First – Just a note on quotes; – WHY Free Builders Quotes are NOT Worth getting !
WHY ? A “Quote” e.g., $250,000 or $x per square – is REALLY MISLEADING and quotes are done quickly, so will have loopholes and be based on past benchmarks, not a detailed current costs for YOU PLAN or YOUR SPECIFIC SITE !
Whereas , an “Estimate” is a considered calculated amount with details , so costs time & money to produce and so is the only useful meaningful document and should be insisted upon by a wise buyer. Cutting this corner WILL cost you later .. and may EXCEED the amount of loan money you have !
People who produce the plans are architects, building designers (hope fully registered) or a drafting service. It may be an over-simplification, but an architect is a specialist in design and amenity, they’ll give you exactly what you want, and more !! Whereas a building designer and draft person are more involved in documentation and drawing, there’s less emphasis on creativity and so cost less, all have their place – depending on your project.
Once you know exactly what you’re building, and you have taken soil tests (at least 6+ bores) , Energy Rating of Final Building Contract & Drawings (can cause delays and re draws) and levels !! (Use WHATFITS for fast results so you can decide) the drawings, you can then ascertain what it will cost. For substantial projects, you should engage a quantity surveyor before talking to the builders. The quantity surveyor will assist in establishing accurate project budgets, there’s no point in asking builders to quote on a project that you can’t afford. In the real world the builders ESTIMATED Costs will be more realistic !! based on his cost of materials and cost and availability of trades.
Once you know the likely cost, it’s time to take the project to market via a tender process. It’s advisable to have a highly experienced architect or designer prepare a tender pack that precisely articulates every requirement of the project.
A word of warning, you should anticipate price variation in the quotes from builders. For a range of reasons, large cost variation is simply the reality of the modern marketplace. As a rule of thumb, the less detail provided in the tender pack, the larger the price variation. If the tender materials describe your expectations in comprehensive detail you will be able to compare ‘apples with apples’. Experienced architects and designers will be very familiar with the preparation of the tender materials – don’t cut corners when appointing your design professional. People like ExpressPermits.com.au do a great job and have references !
The Tender
A tender pack will commonly include drawings, engineering and soil reports for builders and detailed specifications including Australian Standards.
It also includes a scope of works statement that describes the entire expectation of the project. If there are ‘exclusions’ (for example, you’re a fully licensed plumber and want to do the plumbing) this exclusion will be noted, and the cost excluded from the quote. Your designer will be able to advise, relative to the specifics of your project, what the likely ‘exclusions’ will be. Typically exclusions may include:
- demolition,
- services to site boundary
- traffic control,
- site preparation,
- permits – a big one !
- insurances,
- driveways,
- light fittings,
- window locks,
- flyscreens, etc.
- meeting estate guidelines !
- air con ducts – plus changes to drawings and insulation !
Also included in the tender will be a ‘building schedule’ – it’s vital that it is as comprehensive as is humanly possible. The building schedule contains details of all required fixtures and fittings. ‘Cost shocks’ often originate from oversights, or under-estimations, associated with fixtures and fittings or just leaving out items or having “allowances”..
You must include precise detail when describing what the requirement, eg: 1 set Dorf Maxum Bath Set. Specification: Bath Colour: Chrome Material: Chrome Plated / Solid Brass Product Code: 1101.04 watermark… (and include a link to the item on the manufacturer’s website).
Contract
One of the most contentious aspects of the building process is the start and finish date of the project.
It is common for projects to exceed the contracted price or be completed well after the expected handover date – sometimes both! While the tender process allows you to ascertain estimated start and finish dates, it’s the contract process that locks this into place. Make sure you have a well-experienced construction lawyer on your team.
As with the building designer, the lawyer is not an appointment to be cutting corners on. They will ensure any delay to hand-over of the project provides compensation to you (by the builder) – this is called: liquidated damages.
While places like WHATFITS.com.au can discuss the building side with you , your lawyer will also be able to guide you on the critical considerations of Prime Cost items, Provisional Sum and Variations – it’s essential you’re familiar with these terms.
Pro Tip
It’s a good protection to ask the builder – in writing – to list all known exclusions. This is a nifty bit of ‘reverse engineering’ that helps identify items that may have been overlooked by you or the designer.
It’s also VITAL to find out WHO is physically doing the work. Make sure the likable builder who provided the quote (and appears competent) is hands on. If not, ask who is going to be on-site each day? Or, is the job being handed over to a team that you’ve never met? If your extra surveyor is allowed on site an dhow often ..e.g., pre-plaster, site cut, pre reo/post pipes etc , – Best to find this out before you sign a contract and so its included.
Conclusion
- The “passes” you do thru your plans and specs the better the result, better comfort and reduced running costs later.
- The more detail you put in the tender document, the more value it will provide in assessing and comparing builders.
- The more leg-work you do now, particularly around the fixture and fittings, the better the quality and amenity of the final construction.
- Only after obtaining a sufficient number of quotes will you be able to ascertain a reasonable ‘benchmark’ of the true cost of the job. A cheap quote should set off alarm bells!
Also, don’t be discouraged if some recommended builders elect not to submit a quotation. There’s a range of factors that determine who will ultimately pitch for the work. These include: excellent builders are usually busy, travel time, the specific challenges of the project, availability of suitable sub-contractors, etc. and mind set of clients ! Ask us for tips on How to Negotiate and How to Approach A Builder ! – well worth it , you only have one chance at a first impression !
Finally, read the subtle ‘language’ of your builder. Were you comfortable in their company? Did they miss the tender deadline? Have they overlooked specific instructions in the tender? Did they gloss over items !?
Are they good with their hands but not at paperwork… Do they have too many jobs on at one time ?
Are the written materials sloppy or unprofessional? Were they easy to communicate with? You may also need a project manager to drive the project in that case .. or better find another builder ! You pay for what you get – cheap price – dear troubles ..
Remember that you have a responsibility to research exactly who it is that you’re engaging to build or renovate your home. Caveat emptor – Buyer Beware!
Disclaimer: We provide advice of a general nature only. We do not provide formal legal, regulation or building advice. The advice published has been prepared without taking into account your specific objectives or needs. Before acting on any commentary, articles or reports provided by us you should consider their appropriateness to your specific objectives, financial situation and requirements. We shall not be liable to any party as a result of any information, services, or resources made available as part of our reports or articles contained on this website or third party sites or third parties introduced or used by us.
