Budget Blowouts
One of the biggest concerns we hear about from new clients is the fear of budget blowouts, and unexpected expenses. There are a few reasons these issues come up, and here we will outline some of the ways to avoid them.
Be honest with your budget - It is essential that we know your upper limit is so we can help you make choices that are within your budget range. The average person has little idea about how much construction costs and almost every client we work with must dial back their expectations to meet their budget. It is all about awareness, priorities, and needs/wants. If your budget range is unachievable for the project, we will show you how to make it work. In some cases, it is good to get in touch when you are choosing your section so we can advise you. If you have a $500k budget and want a two-storey house on the hill, it might not work. You might need to look for a flat section where the foundations will be much less expensive.
Be clear on your needs/wants – Make sure you know what is essential to achieve your aims, and what can be dialled back to save money. This is where clear communication with the builder and architect will save lots of time (and money) in the design and pricing stages. A good designer and builder will help you understand what can be minimised or eliminated form your project to help you fit your budget. It’s very important that you are flexible with your choices, and that you are advocating for your budgetary constraints. The builder and architect will try to give you what you want but if the pricing comes back and it is well beyond your budget, cuts will need to be made and that means you may need to alter some of your selections to use less expensive products and processes.
Invest in detailed pricing – Detailed pricing takes a significant amount of time (and money) but it is absolutely essential for every job. It is useful for us to be involved during the design stage so we can give you a rough idea of how realistic your budget is for the project, but we won’t have an accurate estimate until we have detailed plans. Once we have the detailed plans, we prefer to do our own pricing as we know exactly how much time and materials will be used. Sometimes we can hire a quantity surveyor to do some of the pricing, but it will have to be carefully checked by us, especially if there are energy-efficient processes that the surveyor might not be experienced in pricing.
Plan for the unexpected - Allow plenty of wiggle room. For example, be aware of items in the pricing that are ‘tagged out’ or are a ‘provisional sum’ as the final costs are not known at the time of pricing. A good example of this is if you require excavation for a hill foundation. The excavation contractor can’t always give an exact price as he doesn’t know what he will find once he starts digging. If he finds a metre of solid rock, more time will be required to complete the job. We can usually give you some indication of the upper limit for these expenses so you can plan but be sure to leave plenty of wiggle room in the budget in case extra work needs to be done.
Time and expertise are valuable – We value your time, and we hope that you value ours. We strongly believe transparency and honesty are linked with having a strong and viable business, knowing what our time is worth and being clear about that value to our clients. What this means for you is that the time you spend with us, or the designer, will be communicated clearly and transparently with you, and will be billable to you. Usually with designers, you pay as you go. With us, you might pay for the pricing up front, but the rest of the time is averaged out and added to the project management time that is priced into the build contract.
No matter how much time and planning goes into a project, it never goes as expected. There are almost always some unexpected costs, even if it is because you decided to add that extra tap, or an additional power point.