Building costs can blow out

My builder emailed the earth works invoice and meeting with him this week. No sharing, full amount discounted to me

I know exactly what you mean when it comes to bigger builders

 

Prov sums still include builder margin so why shouldn't they be adding their margin onto subcontractor costs?

 

More to the point, why should they be able to charge a margin for a sub contractor? I source a sub-contractor to lay a floor for me because I know he is very good. I pay him for his work and thats it, why would I want to pay the builder for that, he has not done any work regarding that particular task. Of course there is a cut off point because you do hire the builder to build the house, so if I went and got a tiler or plumber for work then he would be quite right to charge a margin.

 

That's the point. The builders job is to manage subcontractor's.
Most builders won't be happy with you engaging subbies direct. As soon as something goes wrong all the fingerpointing starts and you've put yourself in the middle.

 

Thats only if something goes wrong and it is the risk you take. The main thing is that the subcontractor you hire has all of the relevant insurances and the builder will usually demand this. Why would I want to pay a $4k margin for getting a floor laid and the builder has basically done nothing at all, not only that, the builder may use someone who does not do a good a job as my floor layer. This was proved to me when on a recent build the builder demanded I use his tiler, in the end the tilers work was not exceptional by any means as compared to a tiler I knew and recommended.

 

Had the choice to go build at cost. This is where I get all the trades and builder takes a % and manages the project. Can save significant $$ but not interested in this much work and stress

 

If you get the quotes, arrange access, manage the scheduling then fine. I’m not a builder but I do PM other types of work and the effort involved is huge. Writing scopes, getting quotes, writing contracts, checking the work, managing the payments and budgeting, re-scheduling when things get delayed or there is adverse weather or equipment issues or something is taking longer than thought, co-ordinating all the pieces of the puzzle (ie multiple inter-related scopes), etc etc. And when something goes wrong it all falls back on you. It’s a HUGE job. It really ****** me off when people (clients) claim that the PM doesn’t do anything except delegate and they don’t want to pay for the PM services.

The margin will also cover the risk of non-payment by a client to the head contractor. In these instances the subbie still gets paid by the head contractor and they are out of pocket. So the margin covers that risk because eventually you’ll get someone who doesn’t pay.

 

Can you please give me some tips on how to save on this items? Did you buy it online? thanks in advance

 

Go to tradelink as they have their own brand, which is excellent, and significantly cheaper

dont buy on line, I need to see product prior to buying, probably a mistake??

 

Has anyone ever built anything without cost blowouts?
I say there a 95% chance of cost blowout in building.

 

Agree
There will always be something. Most will go over the expected build time, this will cost $$ ... holding costs

 

Builder has taken a hit with steel costs. Everything is going up
I have a contract price locked in.


Apparently in HIA contract builder can pass on any additional costs due to price hikes??? My builder is honoring the contract price. Thankfully


Anyone know anything about this clause in HIA contract?

 

Yes there is a clause in all the Perth contracts which roughly states that if there is more than xx days between contract signing and going to site that they can pass on some costs outside of their control up to 5% of the contract amount. The amount of days is a contract item and is generally 45 days but I have seen different and like all contracts may be negotiable.

It's on page 7 of your contract - here is a screen shot

 

The HIA Fixed Price contract is very not fixed. Between prime cost, provisional sums AND that clause it is very open to price increases.

 

Steel forecast is set to spike for the remaining of this year, while timber prices have stabilized. Lock in the price today if you can

 

I got a quote a year ago for retaining and a small section of fence $800. I just got another quote for same job from another company $1600. Taking the ****? Surely it hasn’t doubled?

 

From my experiences, absolute fixed costs is really mostly a fantasy we tell ourselves prior to signing the contract to help us feel better about it.

 

As a builder, I can tell you, categorically, this is a rare event. This cost saving would be seen (quite rightly) as part of the risk/ reward relationship and kept by 99% of Builders. On the face of things, you’ve found a great Builder.

 

Nearly every fixed price offer I have seen has clauses which allow variation. Variation is how most in civils and construction make a profit. The base build makes a base profit but the cream is variations. eg Site costs, changes, upgrades, modifications. They dig and hit rock and it adds to cost. Most builders have a showroom where they work to upsell the dream.

 

Yes thx, he is a great builder
I was watching builder as he was involved in 2 developments for my nephew, both went very well. No regrets so far