Choosing a builder not only comes down to someone you can trust and work with but also making sure you are getting an accurate costing of your project with no hidden surprises.
One of the most common questions asked by our clients is “How do we compare quotes?” When comparing quotes, especially on major renovations, there can be a substantial difference in price between builders.
There are two key elements to the quote that you need to take note of. These are Provisional Sums and Prime Costs. These costs are educated estimates by the builder on what certain items or services will cost. These figures are included in the total cost of the build as provided in the quote. The catch is if the costs for these comes in more than what the builder has estimated, the extra costs then get passed on to you. Vice versa, if the actual cost comes in lower than what the builder estimated, you are entitled to get a reduction for this amount off the total price of the build.
For example, if you have substantial excavation work to be done, there is an unknown factor in what the builder is going to find once they start the job. If they discover your block of land has extensive rock which requires heavy duty machinery, this is an extra cost that the builder cannot forsee. In this case the builder may put in a Provisional Sum for this particular part of the project. If the costs of excavation go over and above what the builder has put in as a Provisional Sum, then the builder is able to pass on the extra cost to you as the client.
Another example is a Prime Cost for bathroom fixtures and fittings. If you haven’t specified exactly which products you are going to use, the builder may assume a cost that only covers the basics. If you then go and choose products that are more expensive than what the Prime Cost is listed as, there will be an extra cost to you.
Big ticket items like cabinetry may be allowed for in the Provisional Sums. If one builder has only allowed $20,000 but your kitchen will cost $80,000, that is a substantial shortfall in the quote and you will be up for the extra $60,000 on top of the contract price. The more accurate the Provisional Sums (which may mean a higher contract price when comparing quotes) the less potential for a budget blowout.
It is also important to do some research yourself on the costs of particular products like bathtubs, tap ware, floor coverings, cabinetry, tiles, vanities. The more specific you are, the more specific your builder can be in sourcing and costing your project.
If you are planning on using an architect to design your renovation or new build, your builder will have plans that specify all the products, fixtures and fittings enabling them to provide an accurate quote.
Once you begin your project, ask for updates on how costs are tracking on a regular basis. Good communication with your builder will be key to ensuring there are no nasty surprises along the way!