October 25, 2018
Last fortnight I wrote an article about the importance of avoiding per square meter rates for determining the cost of a project. I also wrote about the importance of why builders who choose to apply such a technique should be avoided. This week I delve a little further into that topic, as this article almost forms part II of that piece. This is because proper and accurate documentation goes hand in hand with obtaining an accurate build price for your home or development.
Since starting Milara Building and Development at the beginning of this year I have already been asked to price some 50 different homes and developments. Almost, 3 out of 4 of these have wasted both the time of the potential clients and my own time. While I love to see potential clients as enthusiastic in their approach to building as I am, seeking out prices to prematurely (Which can mean as soon as they commence the town planning process or in some cases even before they have purchased land) leads to disappointment when I cannot provide them a quote. Insufficient documentation or in many cases little to no documentation at all, not only results in a waste of a client's time, but it can also expose the client to a risk in price rises down the track. Prices are prematurely presented with significant caveats which can leave a client out of pocket when the build commences as no allowances are made for items where appropriate documentation has not been provided.
There is a typically a misconception that exists here whereby some people believe they will be able to obtain an accurate build price with little to no adequate documentation which, in reality, is simply not the case.
To answer the question in my headline, in order for any builder to accurately price any project, there is a requirement to have at the very minimum the following key documents. I will detail why these items are required to help the public understand their importance in obtaining an accurate build price:
A soil report is a document that provides conditions of the site beneath the ground. It provides key information as to what type of foundation is appropriate as well as what type of soil will be encountered at certain depths. This is critical for builders to know as it will certainly determine the best type of footings system for the site.
Engineering (structural drawings)
Structural drawings are vital to any project as it shows each of the footing, wall and roof elements and the minimum strength requirements for each of these items based on the site. It provides details as to how each of these elements are to be built. The cost of the project depends significantly on the level of engineering requirements for the project. So often I am requested to provide a price without these drawings. It is counterintuitive, trying to give any indication on price without these drawings in place for the above-mentioned reasons.
Working Drawings (Architectural drawings)
Working drawings are normally the first point of call for any builder to draw upon. They provide key information on site conditions, elevations of the site and home, floor plans for the project, external and internal material schedules and often other crucial aspects depending on the scale of the project. Without these documents in place, engineering the project cannot happen. In addition to this, without these documents, not even an accurate indicative price can be provided.
This normally forms part of your working drawing package, nonetheless all too often I receive very preliminary electrical drawings with little information as to what type of light fittings will be in place, the quantity of general power outlets is misleading and all to often the detail is far from the reality of what the client will most likely be after. Always ensure you are clear what type of lighting you will want to achieve for your project and the quantity of outlets you will wish to have. Data and security is also often missed and this too can add or reduce to the cost of your project. It is also important to ascertain electrical pit requirements for the site.
Whilst this is less important for a standard house that will often connect directly to the legal point of discharge on larger scale projects civil requirements can add tens if not hundreds of thousands of dollars to your project. Always ensure you have local water authority information as well as council overlay information and that you have ascertained possible civil improvements. Your engineer will be able to point you into the right direction here as well as your architect. Without this information most builders will exclude civil improvements, should they be discovered later this could cause for costs that were not necessarily encountered to begin with.
A planning permit is provided by your local council and will outlay what can and cannot be undertaken as part of your project based on their given regulations and neighbourhood character. Sometimes smaller projects and single houses will be excluded from requiring a planning permit but this should always be checked by the council town planner. Planning permits if required can take a great deal of time to be acquired dependent on the complexity of the project, a strong team of consultants will always improve the time taken to obtain a planning permit so be sure that your architect and engineer are familiar with the municipality that you are building within. Once obtained, your builder will require the planning permit to ascertain what conditions have been placed on the site and whether those conditions will add cost to the project. Some examples that add cost to the project that are typical on a planning permit as tree protection zones, vehicle crossing upgrades, asset protection, signage, planting improvements and access constraints.
Energy reports are key to every project. They determine a rating based on the documentation provided as to how energy efficient the home will be upon completion. They outlay what requirements are needed to achieve the rating denoted. This is important in ascertaining the level of glazing requirements for windows, insulation requirements and other key items. Whilst energy efficiency is great long term, they do add immediate cost to any construction and this will need to be considered by the builder when assessing and providing a price to complete any project.
Material schedules are often missed and in most instances builders are left to provide prime costs for the supply of different materials that are unknown at the time of the pricing. This will put the project owner at risk should the material cost more than the prime cost allocated. As we all have different expectations in terms of finish it is always best to provide the builder an upfront material schedule to remove any doubt or concern as to what the finish material will cost, schedules such as these simply provide a level of peace of mind for all parties involved.
Fixtures and Fittings Schedule
Similarly, to a finishes schedule, a fixture and fittings schedule is also important for ensuring you are getting an apple for apples comparison when obtaining prices from your builder. The builder's life is made easier knowing exactly what the client's needs and wants are for the project and no items will have question marks hanging over them. By not having this in place you are leaving these prime costs up to the builder which may not be a sufficient amount for what you require or on the contrary it could be overestimating the requirements for the project. This is where rogue builders will take advantage of their clients. Often they place lower prime costs almost knowing their budgets will not be sufficient. Down the track the client opts for a higher specified appliance, for instance, only to be told by their builder that this has not been allowed and in turn places a higher margin on these alternative higher specified fixtures and fittings.
It should be noted that the required documents mentioned above is for your typical custom home or townhouse development and should only be used as a guide as to what are the minimum requirements for an accurate price. Larger scale projects and more complex designs will have further detailed documentation requirements.
Many too will question putting down money for documentation and a design they are not so sure they can afford without a price from a builder. These concerns should be addressed by your design consultants as they will have an idea on how much certain designs will cost and should be able to provide a price range for how much your project will come to. It is imperative that you have these discussions with your consultants early so to that budgets can be achieved.
As builders, we have a duty of care to ourselves and to our clients. By ensuring sufficient detail, design and documentation are provided to the builder for pricing the process is transparent which protects the client from any nasty surprises down the track. It also protects the builder from having to chase up missing details and documentation gaps. The more documentation you can provide, the better off you and the builder will always be.