Avoid Cost Overrun – Follow These Simple Steps

One of the most disheartening experiences for a homeowner is the cost overrun. However, with careful planning and working at the preliminary stage, with the right building professional, there should be no surprises.

The Budget/Quote

The Budget or Quote for any Project is a vital preliminary start to the actual building process. The accuracy of the figure is a reflection of the dedication, commitment & understanding of the Builder. Requesting a ‘free quote’ will challenge this premise and in turn affect the accuracy of the quote.

Charging for the Quote isn’t common, however doing so will help to ensure the Builder is committed and that an accurate ‘Cost Breakdown’ is provided.

Having a dedicated Trade by Trade breakdown which details the Labour, Materials and Plant associated with each Trade helps you, the Client, to understand where the money is allocated and as such the opportunity for revision and prioritisation.

Kieran Gibson with a client planning a build, on-site on the Sunshine Coast

How Cost Overruns Occur

All too often in the industry, a Client has relied on a simple cost per square metre rate nominated by their Architect or Designer. On the strength of this alone the design documentation has been completed before submission for a Builders quote. Often in the industry, this is the first time a Builder has been invited to be involved. Not surprisingly there is a cost shock on the total cost of the project, or on a Trade Item if that level of detail was provided.

Here is a frequently heard story in the industry:

The designer advises the Client of an estimated budget of less than $900,000.00 – the Clients maximum – and the subsequent Tender results in quotes at $1,500,000.00 or higher. This usually results in ‘Client Quote shock’, followed either by abandoning the project to completely start again or drastically altering the design – which compromises the designs initial intent.

Preliminary Sketch of a Gibson Building Design-Build project in Verrierdale, QLD

Avoiding Cost Surprises

Rather than being presented with a lot of cost surprises that result in design compromises to meet budget expectations, get a specialised Builder involved in the earlier preliminary ‘Concept Stage’  of the design process. A specialist builder who has a proven track record of building or renovating the type of home you are planning is essential ‘team member’ of the design/documentation process.

Ensure a Builder is part of the Design team from the beginning. This will ensure you have the cost element introduced from the beginning and with an accurate Trade by Trade cost breakdown during the design process, there should be no surprises further down the track.

Need advice?

If you are thinking about building a new home, feel free to organise a meeting with Kieran.