Q. I have just received two quotes back for my villa renovation in Richmond Road, and there is a price difference of almost $250,000 between the two tenders. The builder with the cheapest price is one builder and his apprentice. They seemed like nice guys, but they haven’t done any work of this scale before, which worries me a little bit. The other quote is from a construction company, with a dedicated project manager. They specialise in villa renovations. But they are $250,000 more expensive. What should I do?
Although it may be tempting to go ahead with the cheaper option, is important to remember that cost isn’t everything. The value that the cheaper builder provides, may not necessarily match up your expectations of the project and may mean blowing your timeline or worse your budget.
It is important to remember that when you receive your quotes back from potential builders to there will always be a variation in prices. Some companies may price up to 20-30 percent more than another company. This is standard across many industries. I know that it is definitely tempting to go with the builder who appears to provide excellent ‘value for money’ but I strongly urge you to check the fine print.
Some builders will often use provisional cost sums when quoting your project; these allow the builder to change the cost as a project progresses, meaning your bill may be twice or up to three times more than it was on the quote. While these additional costs are at times unavoidable and are usually justified, you need to be extra vigilant that the builder is not undercutting these prices to win your project. The larger construction company you mentioned will most likely have used the services of a Quantity Surveyor. Using their services means that your project is priced correctly.
Due to the unforeseen nature of renovations, allowing for a contingency is critical above and beyond your fixed quotation. Unknowns such as leaks, rotting framing and subsidence are examples of common issues found after exploratory work begins on a project. Any reputable residential construction company will advise you immediately of these costs and will provide you with the revised cost to complete the project, which ensures your expectations and budget are aligned.
It also pays to check what is being included in the price when you receive your quote. Quite often, what you are receiving is literally just the bare bones of your project. This means there will be no soft furnishings (such as carpets and curtains), no fixtures (such as plumbing or lights) and even no paint or plaster on the walls. These are often called ‘exclusions’ and it pays to watch out for them. As you mentioned in your question, the cheaper quote was from a one-man band, which means that you may have to become the project manager and organise for tradespeople (plumbers, electricians, plasterers, waterproofers, tilers, and kitchen installers) to be on site as and when needed. You may even be left to organise the portaloo!
It would also pay to check the qualifications of anyone you are using, as well as any guarantees and warranties that are included. All building work needs to be supervised by a Licensed Building Practitioner, and all building work should come with the option to purchase a guarantee from Master Builders or New Zealand Certified Builders. This will ensure that the work you have done is to a high standard.
Using the services of an end to end company like Next Level Construct means that you don’t need to worry about organising anyone or anything. We take care of everything for you because we understand that your time is valuable, and is better spent not having to chase tradies. We work with you to make sure that your project is delivered on-time, on-brief and on-budget each and every time. Our foreman are all Licensed Building Practitioners and we offer our clients the 10-year Master Build Guarantee.
My advice would be to check the quality of the work of any builder you are considering using, check the fine print and don’t hesitate to ask any questions.
Brendon Sowerby is the Founder of Next Level Construct, an award-winning end-to-end residential construction company specialising in renovations, extensions and new builds. Brendon has been working in the building trade for over 17 years, meaning he knows the ins and outs of the industry.