Building a new house or carrying out major renovations is an expensive and potentially time-consuming exercise.
If you get the right people involved at the right time you can manage the costs and potentially save a lot of money.
Where do extra costs creep in?
1. Inaccurate estimates
Builders are not quantity surveyors. They have not been training to calculate the cost of materials and labour as part of a building project. Their focus is on the building work itself.
Poor record keeping practices can allow for small (or large) errors. These include double charging for materials or ordering more materials than is necessary.
Some less than ethical builders will quote a low price for a building project to get the job. Close examination of their cost estimate will show a large number of exceptions or 'tags' have been included. Unfortunately, unless you are trained to spot these, you won't realise that the cost of these items won't be reflected in the quote or estimate, and will be added later in the project when it comes to progress or final invoice time.
A tender or quote assessment carried out by a qualified expert such as a quantity surveyor will tell you whether the estimate is reasonable for the size and type of construction project involved.
The reason for including exceptions is to cover the possibility that this exact material or product will not be available when it comes time to carry out that part of the project. The only available product could be more (or less) expensive.
Cost variations are normal and generally included in progress payment requests. These progress payments have to be closely monitored to check they match the work actually done and materials actually used.
2. Changes to the design after the project has commenced
Changing your mind after a project has begun can cause significant delays and increase the cost. The changes might mean more expensive products have to be used. It could also mean work that has already been done has to be changed which takes extra time. You may need your architect to re-work the plans which will also cost you extra. Take time to be sure that the plans you have had drawn up reflect what you really want, and try to stick to them.
Some changes will be necessary if a product goes out of stock or is unavailable for some other reason, and including a small contingency in your budget is wise.
3. Delays
Building project deadlines can fall victim to bad weather, material delivery delays and other interruptions. All these have a flow on effect to the final cost. Unfortunately this is one that you have little control over except to make sure that you don't cause any delays yourself and nor does anyone else involved in the project other than for those things that cannot be controlled.
You should include contingencies to cover these.
4. Unrealistic Expectations
Before starting a building project, have a cost expert look over your budget and give you an idea whether you are actually going to get what you hope for, for the budget you have in mind. Many home building projects go over budget because the property owner is hoping they will get a luxury home when they only have the budget for an economy one!
What you can do
A budget cost analysis will tell you whether your calculations and allowances are correct and reasonable.
Investing a small amount to get advice from a neutral third-party in the form of a quantity surveyor can save you thousands of dollars because they will make sure you only pay for the materials used and actual labour required to complete your project.
They can check progress payments and final claims to make sure they are accurate.
They can also tell you before you start, whether your expectations of what your dream home will cost, are realistic.
Emmitt Consultants are quantity surveyors and building cost management experts offer services to residential and commercial property owners. Emmitt Consultants can provide their expertise without needing to visit the construction site. Contact them to find out how they can help you save on your building project.