A building project, for most people, will be the most significant investment they make in their entire lifetime. By choosing the cheapest builder, you may not get the best value for your money.
Hi, I’m Neil Myburgh, Director at NEDS Projects Ltd.
We all know that we can buy things cheaply. However, if we want a valuable, quality, long- lasting, guaranteed product, we need to deal with a reputable and professional brand, company or individual. A professional who is proud of their work and will provide you with guarantees worth a lot more than the paper they’re written on. The same thing goes with building projects. You might find the “cheaper builder” in the end to be more expensive. While your whole project becomes demoralising, overwhelming and emotionally draining, long before you reach your hopes and dreams. With the extreme possibility of an unfinished or unsatisfying end product.
It is always advisable to get more than one quote, preferably three. However, you will find that there is no consistency between quotes. The reasons for this can be found in the way the quote is done and presented to you. Most of the building horror stories start off with a “free estimate or quote” where the builder provides an unqualified “hook-price” based on either a square metre rate or a costing based on past experience. This “hook-price” is usually in line with what a prospect would like to hear, but is not realistic.
These types of agreements frequently fall short of providing the client with a detailed and qualified fixed price quote that is accompanied by a comprehensive and transparent “Specification Sheet”. The Specification Sheet will clearly describe what is included in the costings of your project. Depending on the size and complexity of your project, a fixed price quote can vary between 15 to 30 pages and will take some time to prepare.
Because of the complexity of renovations and additions, it is not possible to altogether avoid Variations and Provisional Sums (PC Sums). However, a professional builder will scrutinise the plans, and any accompanying consented documents under a magnifying glass to identify all hidden costs and possible design errors. By doing this, Variations and PC Sums are kept to the minimum, thus enabling you to control your budget and do financial planning with confidence.
So, what hidden costs are there?
Hidden costs are costs that have not been included in the estimate or quote nor documented in any way.
Typical hidden item costs are:
- Site Preparation
- Temporary Site requirements such as waste management, temporary fences and toilet hire
- Scaffold and other working-at-heights requirements
- The expenses of legally required safe working practices
- Erosion and sediment control
- Electrical works
- Temporary connections of services such as water supply, electricity, phone and data lines
- Insulation
- Fencing
- Retaining walls
- Waste/Water management systems
- Local council fees
- Environmental Impact Regulations
- Costs of additional professional consultants if the need should arise
- Landscaping
- Site clean-up after the completion of the project
How can Variations and PC Sums influence the project?
Variations are items normally left-out or not listed items in the original building contract, while PC Sums are used to give a cost indication of what particular parts of the project might cost; i.e. earthworks or remedial work to a wall. During the construction phase, it will become apparent that these items need to be addressed for the project to proceed. These items will then commonly be handled through the use of a ‘Variation’ which should be approved by the client before the builder proceeds.
These items can occur due to several reasons:
- A client requesting changes to the plans,
- A client is adding additional requirements to the drawings or finishing specifications,
- A final decision on a specified item was not possible at the time of the agreement being signed,
- Details on the plans to clear,
- The builder did not invest adequate time in your project to eliminate as many as possible grey areas but simply tagged them out of the contract.
It is not uncommon for items to be left out or tagged as PC Sums. Some builders make use of the ‘Variation’ clause to make up for losses occurred by their unprofessional ‘Free Estimate or Quote’ by overcharging their clients at this point. Should such a builder not manage to recover his financial loss by the use of ‘Variations’, there is a possibility that he may be out of pocket before the end of your project. Leaving you with an uncompleted or an inferior end product. The bottom line of this is that you, the client, will have to deal with a budget blow-out that can quickly exceed 15% of your original contract value. At this point you might have to consider cutting back on your project or worse, you may not be able to stop at an appropriate point that better suits you to stage the project so you can finally reach your hopes and dreams.
When comparing quotes, you should look out for the ones that have significant price differences. Apart from asking the builder what has not been included. You should be able to determine from your various detailed quotes items that are not listed or priced and ask specifically about them.
There are lots of variables to be considered when carrying out a full cost analysis for a quote. The ‘ONLY’ way for a builder to create a detailed and 100% qualified fixed-price contract is to conduct a thorough cost and time analysis of the detailed drawings, alongside other documentation and specifications.
Professional builders will invest in high-end software and systems to provide their clients with the maximum benefits and value for money. It is now possible for builders with the help of detailed 3D-modelling to better:
- Visualise the various stages and the end product.
- Identify and reduce design problems that can lead to costly time delays and unforeseen budget blow-outs.
- Draw detailed and accurate material lists and labour hours for more accurate and fair pricing.
- Plan work programmes that lead to a more precise and shorter construction time.
- Quality control to ensure you get value for your money.
- Communication at all levels of the construction process. Avoiding the costly time and money misunderstandings.
Contact us so that you can complete your hope and dream lifestyle renovation on a transparent and qualified budget. When looking for professional building service, we are the leading team to contact. Experts and well-experienced, specialising in custom luxury renovations.