My brother is currently working through his first develpoment project…he has the approvals and is up to the stage of getting quotes from the working diagrams. How do we sort out the unreasonable quotes?
This is what we had in mind. Get a Quantity Surveyor to assess the project and give an estimate of pricing…then take each of the builders quotes and compare them to the QS report…Any of the builders quotes that vary by more than say 5% will either be discarded or reassessed to determine the reason for the variation…
Clearly an over priced quote is a problem and an under priced quote could quickly become a nightmare too.
Has anybody done anything similar? What is a QS report going to cost? Is this idea worth pursuing?
Any helpful comments/suggestions appreciated [biggrin]
Cheers,
GregGrreg
Theory is fine but a QS may not realise how building costs relate to supply & demand of labour.
Certainly in SE Qld if you used that yardstick you would never start any development. Any builder worth his salt has enough work for the next 6-12 months.
It all depends i guess on your start and finish dates and how much lead time you can offer a builder as to how attractive his pricing will be.
Cheers Richard
richard at fhog.com.au
http://www.fhog.com.auThere is no such thing as a problem.
Just a solution waiting to be foundRichard Taylor | Australia's leading private lender
A QS or estimator could put together a Cost Plan for you. And if he’s local, he should have an idea of local labour costs. If you send me an e-mail I’ll probably know someone near where your brother’s site is.
Richard is right, though. I’d say everywhere in Australia you’d be at the mercy of builders. Insurance problems (in part) have helped create a shortage of builders.
Thanks for your thoughts guys…
What if we get itemised quotes as such – splitting labour and material costs… A QS may not be able to accurately predict the local labour costs but he should get it pretty close with material expenses…
This would put us in a better position to compare apples with apples…
Anyone else have some thoughts?
Worth a try.
Look for a local Estimator as opposed to a QS.
Hi Depricator!
That has gone completley over my head [blink] I have never heard of an Estimator
Could you give me a nutshell explanation of the difference between a Quantity Surveyor and an Estimator – and when you might use the services of each?
Hopefully others out there are learning from this too… I get the felling like I am about to learn something useful [biggrin]
I guess in a nutshell, Quantity Surveyors have a uni degree, while Estimators have taken a trade route to where they are.
Estimators generally stick to estimating costs, while QSs sometimes do a broader range of things – tax work, sinking funds etc.
In our network I have a mixture of QSs and estimators. They’re both able to (and qualified to) estimate building costs and the value of depreciable assets for our purposes. We don’t require them to know the tax stuff – we take care of that end.
You may find an estimator cheaper. You may find them also a bit more site savvy, if you know what I mean. And in regional areas, at least you’ll find them – QSs tend to be thin on the ground outside of metro areas.
Thanks again!
Looks like there is plenty for us to look into here… Should keep us busy for a little while… Once we know some more about the direction we choose we’ll let you know…
Anybody else have any suggestions!? Are we barking up the wrong tree here altogether? Is this time and money we don’t need to spend? I am sure there is someone out there who has been through all of this and learnt a few tricks already.
Cheers,
GregHi Ggreg,
Don’t know if this will help but we’ve just built a house (in Adelaide) where i did alot of ringing around for quotes and the rule of thumb for building a residential place is to allow for $1000/m2 for a finished product. The structure itself is relatively cheap however if you work on $1000/m2 that should include the aircond, floor coverings etc.
Hope this helps.
Kim
Ggreg,
Send me an e-mail and let me know where you’re looking at building. If I’ve got a guy nearby, I’ll put you in touch with him. A conversation isn’t going to cost you anything.
I have one piece of advice, make sure your tender documents have maximum amount of information, espeically finishes and fixtures, leave no stone un-turn. Because the more detail you have, the less likely the builder would come to you later and ask you what kind of taps you want; but because it wasn’t included in the tender/contract set, and then the builder say they didn’t allow for it and charge you extra for it [angry2]
Also another pointer is NEVER change anything after you sent out the tender!!! Why? Because it’s at the tender process the builder will keep the price down and compete with others. As soon as they got the contract, any little changes or details that were left out. You are left with a huge bill in variation.
I’m currently looking after an addition and alteration to a block of flat, because there were a number of changes that went into the building, even thought those chages suppose to have saved money, it’s now costing us 50% more!!!! And there is nothing the QS can do about it, because the builder is producing all their receipts etc. That’s the price that the developer have to pay [confused2]
My 2.2cents, hope that help.
JosephThis is a tough subject!!
Having spent the last 17 years as a registered builder here in Victoria, I now find myself having to employ builders to build for me, as I have chosen to take on new ventures and multiple projects.
I understand that even in the short time since I have stopped building, there are significant cost increases caused in part by new safety requirements and energy efficiency standards… As well as that, labour costs and material costs continue to be on the increase.
A ballpark figure per sq mtr for construction with a medium level of specification should be $1000 to $1100 (as menioned above by kimtruong).
Another good point made by Joseph was in regard to the details of the specifications for your project. The HIA have specification booklets that need to be completed to make sure the various builders you ask to quote are quoting for exactly the same work. As well as specifications, make sure you supply full architectural drawings and detailed structural and civil engineering plans.
For larger projects (say anything over $1M), lenders will require you to have a full valuation report and a detailed QS report, on which they base their lending decision. As far as estimators go, they perform a very similar role to a QS.
If your QS report is a lot less than your builder’s quote, you’ll have to put more of your own money into the project… assuming you can get the difference out of your lenders in the first place!
Peter.
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Peter Comben
http://www.smartpropertydevelopment.com.auHello there Greg,
Although I,m fairly new to this forum , I do have a little bit to add to this subject that may already be obvious to you so my appoligies in advance if this is the case…
The advice that you have already recieved seems to be extremly educated in this area.
All I’d like to add being in the building industry for only the last 14 yrs and more recently as an electrical contractor in NSW is to be careful to choose a builder competent in not only the style of the structure you intend on building but the location/site you intend on building on.
Certain builders excel in in certain styles eg.sloped sites ,extentions ,2 story mansions,villas,high rise ,to even project style homes (rip tear bust-although not always)…
So the finish you desire may or should also affect the builder you choose thus re-enforcing the compare apples to apples advice given earlier…
Location wise, a builder who has built a variety of structures in your desired area should already know the pittfalls (site cost wise)& allowed for them in his quote thus a potential reason for a supposed excessive price…
Ask your potential builders for a list(be it verbal)of recent projects in your local area & if any of his previous clients would be willing to give him a rap.(he can only say no at worst & hows it go ‘you don’t know till you ask’…
Good luck & I hope I havn’t bored you too much with my dribble…
[comp]
Greenhorn
Yes we recently had a QS report done on a 180sqm townhouse – pretty basic and no floor coverings, cabinets etc. He came in at $270k, we thought he was off his rocker but I got a builder friend to price it without telling him the QS quote, he came in at $259k. Seems crazy but building prices are going through the roof. Project home builders are telling me to factor in about 1% rise per month. It is certainly making second hand property look cheap in comparison to replacement value and the main reason that (in Perth at least) I think there is a lot of upside for property values.
Extensive list of ‘Off The Plan’ property available for sale in Perth.John – 0419 198 856
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