Hidden Costs That are Often Missing from Builders’ Quotes

Building and renovating is a new process for most of us, and it can be very daunting if you’re not well prepared. In particular, choosing a builder is one area that can overwhelm a lot of people. This is completely understandable, given the horror stories we often hear and the significant financial investment that’s at stake. After all, you’re playing the builders’ game, and they’re a lot more familiar with how it’s played than you are.

To help you improve your knowledge on the process involved, here are some of the hidden costs that are often missing from Builders’ Quotes.

1. Approval and certification fees

Depending on where you live, the fees for approval and certification of your project will vary dramatically, as will the types of fees that need to be paid.

Approval fees are generally paid to the council or to a private building certifier and may take the form of Development Approval fees (DA), Building Approval fees (BA) and Construction Certificate (CC) fees. There are often other fees to consider too, including Long Service Levies, Capital Works fees and other environmental contributions fees, just to name a few.

These may be either wrapped up in a total fee bundle and payable in one payment before approval is issued, or may be handled separately. It’s important to ask if and how approval fees have been included in your quote.

If they have been included, you should try to confirm that all of the required fees have been covered. As with many items in a building quote, you should check whether they’ve been added as a fixed-cost item, or if they’ve been included as an allowance, or provisional sum.

If they’re not included, you may need to contact your council to get a quote for the relevant approval fees for yourself.

2. Site preparation costs

The cost of preparing a site for the building process – taking into consideration the excavation, demolition and clearing of the site – is one of the most common areas where poor communication and lazy quoting practices result in budget blowouts.

Site costs are likely to vary dramatically from one project to the next, depending on the location of the site, the slope of the land, the type of soil and the design of the property. Therefore, for builders to simply use a generic allowance, or provisional sum, for site costs in their quote is unacceptable. Some builders even provide quotes where site costs aren’t included at all, which is a bit like selling a car with no engine; without it, what’s the point? Depending on the amount and quality of documentation available to the builders at the time of quoting, they should at least be able to put some time into calculating the approximate amount of soil to be excavated and transported off site. They should also be able to apply their experience to assessing the likely costs of demolition where required.

For more complex projects or if the necessary documentation isn’t available, it’s reasonable for the builder to include site costs in the quote as a provisional sum. But you should ensure that what has been allowed is based on a specific assessment of the project and isn’t just a guesstimate that may have no relevance to the actual project.

REMEMBER: If the builder hasn’t taken the time to visit your site, it’s unlikely they’ll be able to quote this element of the project accurately.

Be aware that the cost of excavation in rock will generally not be included in the quote, given the unpredictability and expenses involved.

Asbestos removal is another important consideration if you’re renovating. Awareness around the need for safety when dealing with asbestos is increasing, as are the requirements for it to be assessed and handled by licensed contractors.

For that reason, it’s important that the presence of asbestos be assessed before the work starts, and that allowances are included in the quote accordingly.

3. Temporary site requirements

Be sure to check with the builders that they have included all temporary site costs in their quote, like temporary fencing, a site toilet if required, and erosion control measures as required by your local council. These are the kind of items that often don’t appear on any drawings, which gives an unscrupulous builder an opportunity to claim them as a cost variation, because they weren’t shown on the drawings.

Experienced builders will be familiar with what’s required in their particular area, so they should be able to take account of what’s likely to be required and include it in their quote.

4. Structural costs

Structural costs can be a bit of a guessing game, depending on how thorough the documentation is at the time of quoting. Often a builder will be asked to quote from a set of architectural plans where engineering design hasn’t yet been done. For some projects that shouldn’t be a problem, but for more complex designs the engineering will have a bigger influence on the quoting process.

Engineering design can affect the footings, floor slab, structural timber and structural steel. If you’re proceeding down the path of quoting without engineering drawings, you need to check what the builder has allowed for in their quote.

The structural timber components are likely to be quite straightforward to quote, but there’s more guesswork involved for structural steel, which may need to be included as a provisional sum.

By asking potential builders what they have allowed for, you should be able to quickly understand what the range of the overall cost is likely to be, and who has been more generous with their allowance.

5. Hidden electrical costs

If you’re renovating an older home you need to be aware of the possibility that the existing electrical wiring in the home may not be up to current standards. If that’s the case, in many situations it’s legally required that the electrical work be upgraded, which is of course an additional cost.

This is not usually included in a builder’s quote, as it may not be known at the time of quoting. That doesn’t stop you from asking the builder to look into it more closely at the time of quoting though, so that an allowance can be factored into the quote.

Another hidden electrical cost that’s often not included in quotes is the cost of relocating the electrical point of attachment when homes are extended. The point of attachment is the point at which electricity is connected from the house to an overhead power line, and they are generally located on the roof or in the eaves. In many cases you won’t have a choice as to whether you want the point of attachment relocated, as it may be required as a condition of approval by the council or the electrical authority.

6. Insulation

Your drawings should clearly nominate the insulation requirements for the property, and the designer has probably spent some time considering the best insulation for your particular project. If they have specified insulation over and above what’s required to meet minimum standards, you should ensure that the builder is following suit, with the allowance they’ve made in the quote.

For example, the plans may nominate R5 ceiling insulation even though the minimum requirement for your climate zone is only R3.5. But some larger-volume builders will be so conditioned to only including the standard R3.5 insulation that they may only make an allowance for that in the quote. It is important to remember that the plans form an important piece of your contractual documentation, so if the drawings nominate R5 insulation then that’s what should be quoted for.

It’s also likely that the insulation specified on the drawings is required to meet energy efficiency and thermal comfort requirements, so accepting a downgrade in insulation may also cause difficulties in final approvals, if the house no longer meets requirements.

7. Door hardware

Unless explicitly noted, door hardware including handles, latches and locks may be left out of your quote. The best way to inform builders of your requirements for items like door hardware is to prepare an Inclusions Schedule, which sets out all of the smaller items that need to be considered in the quote.

As well as door hardware, it should also include things like taps, sinks and basins, tiling allowances, lighting provisions, appliances, joinery and more.

By adding an Inclusions Schedule to the plans for builders to quote from, you’re significantly increasing the likelihood that you’ll receive detailed, accurate and transparent quotes that are also easy to compare.

This is because the schedule picks up dozens of items, the costs of which will otherwise need to be guessed by a builder, or which end up left out of the quote altogether.

8. Flyscreens

While some window suppliers will supply flyscreens as standard with all opening windows, others won’t. You’ll need to check who has quoted the windows for your project with the builders, and whether or not flyscreens have been included.

Windows framed in uPVC sometimes present issues when considering flyscreens, as some of them have been designed for environments in Europe where flies and mozzies are less common.

The opening styles of uPVC windows can also make it difficult to incorporate flyscreens. So if you’re considering using uPVC windows you should take the time to visit showrooms where you can see how the flyscreens will work.

9. Bathroom mirrors

What do you see when you look into the mirror? It’s generally not going to be the mirror itself. Maybe that’s why they sometimes get left out of building quotes.

We look at them often enough, but we’re seeing our reflection and not the actual mirror. Like most things’ mirrors can be relatively cheap, but they can also get pretty expensive depending on size and other features, like anti-fog glass.

You may also like the idea of incorporating a little extra storage behind the mirror in a concealed shaving cabinet. All of these things need to be checked with the builder to ensure you’re getting what you expect.

10. Towel rails, robe hooks and toilet-roll holders

Much like mirrors, we tend to take bathroom accessories for granted. There are endless options available when it comes to selecting bathroom accessories, and a surprisingly wide range of costs to suit.

It’s a good idea to get out to a bathroom showroom, so that you can get a proper look at what’s on offer, and a feel for the type of accessories you might want to include. This will ensure that adequate provisions can be made within the quote.

11. Fencing

Boundary fencing is less likely to be an issue for renovation projects, but for new homes –especially those being built on new land – fencing is more likely to be a cost consideration.

While some builders will identify the need to include fencing in their quote, others will leave it out to help make their quote appear a little sharper. Once again it comes down to comparing apples with apples, so that you can be confident in your understanding of what’s being included in the quote.

For example, even if a builder does include fencing in the quote, some may have only included half of what will be required. This is because in most situations you’re likely to be sharing the cost of fencing with your neighbour on a fifty/fifty basis.

Other builders may include the full amount for fencing in the quote for you to pay, and then expect you to recoup the cost from your neighbors as required. Make sure you ask the question, so you know exactly what you’re dealing with.

12. Availability and completion period

Every quote you receive should indicate when the builder’s available to start the project, as well as nominating the time frame in which it’s likely to be completed. Be aware that while larger building companies have greater capacity to take on new work and potentially complete the project a little quicker, smaller builders will probably have less capacity to take on new work. You may need to wait a little longer for the project to get started if you’re using a smaller company.

For extension and renovation projects in particular, there are certainly advantages in using a more hands-on builder who will be more involved in the project, from the quoting stage and throughout the construction period. Renovation projects are notorious for throwing up little surprises along the way, but with companies that are more closely connected to the project, these surprises tend to be identified earlier and avoided.

If they can’t be avoided, issues that arise will generally be handled better by builders who are more experienced in renovation projects.

13. Exclusions

One of the best ways to understand what’s included in a quote is to ask the builder what is excluded from the quote. Like reverse engineering, sometimes you need to start from the end and work your way back.

By highlighting items that are excluded, you’ll be able to ensure that you’re comparing like with like when looking at other builders’ quotes. This will also highlight any items that you may need to have included in each quote.

Unfortunately, there are builders out there who take advantage of their experience and exploit their clients’ lack of knowledge. But rather than taking an ‘us versus them’ approach, it’s far better to improve your knowledge of the processes involved, so you can develop an open, informative and transparent relationship with your builder. One of the first steps toward achieving this is navigating the quoting process. For more information about this matter, contact Builder Finders now.

The good news is that there is no cost to use Builder Finders. We are paid by the builder you have selected.

Building is an exciting time. It can also be a time of great anxiety if you choose the wrong builder. Did you know Builder Finders does not accept every builder. Many builders who apply to join the Builder Finders panel don’t make it. There is a 62 step vetting process for builders to join the panel. In addition, the Builder Finders team conducts comprehensive due diligence through reference checks, ASIC searches and CreditorWatch reports to ensure they are not insolvent. You may not be aware that in the last financial year just over 500 builders went bust. Worse still, right now there are builders in financial difficulty that are cutting corners to stay afloat. Fact is, a lot of builders will tell you what you want to hear. Engaging with one of these builders will invariably mean subpar construction of your home. No one wants that.

With Builder Finders, you are in safe hands.

Why risk it? The Builder Finders team have done all the background searches for you. We take pride in knowing our clients are dealing with some of Australia’s leading and award winning builders. We understand the services of a builder broker may be a new concept for you. It would be our pleasure to refer customers that have used our services in the past.