Frequently Asked Questions
Read Up On What We Get Asked In The Construction Industry
on the design and the choice of products and material used. Based on our own and industry averages you will likely spend in the region of $2800 to $3200 per square metre to build the average new house.
Renovations and extensions are very tricky to price and most building companies will generally not give you a ballpark figure for this type of work as there are numerous unknowns to consider.
Once you have selected your construction company, the first thing you will need to do is have a contract signed between yourself and the building company. It is a legal requirement under the Construction Contract Act 2001 that all construction that exceeds the value of $30,000 must have a building contract. We recommend that all projects have some form of signed contract or agreement for your own financial safety.
When it comes to construction contracts there are two main forms. The first is a charge up contract, which means you generally pay a deposit and then pay everything as you go in specified increments set out in the contract, be it weekly, fortnightly or monthly.
A fixed price contract is exactly as it sounds. A building company provides you with a fixed price for the entire build and charges you accordingly to what is set out in the contract.
What is best? This is the question that is getting harder and harder to answer as building materials and sub-trade rates are constantly changing. This forces building companies to add contingency sums into their quotes and write in clauses covering themselves for extreme price hikes in materials. Both contracts have their pros and cons so it is best to take your time and do your research to decide which form of contract best suits your project.
This is a question we run into all the time, and we have had clients act very offended by this. So, what’s the deal? What do these project management fees cover? This fee can vary from 5% to 15% depending on many factors like the size of the job and the size of the company. The project management fee goes towards paying a company’s fixed price costs, for example, insurances, advertising and rents. It also covers the weekly health and safety regulations for the job and helps recover costs spent in obtaining the job. It goes towards paying management staff for their day-to-day organisation of the project, so that it comes in on time and on budget.
Unfortunately, this cannot be ensured as we live in a world where things sometimes don’t quite go to plan but there are things you can do which will help minimise the risk of this happening. Be firm in your choices before you start. Changing or adding things along the way can create huge cost blow-outs, causing new building work to be undone to make allowances for the new work. This can add to the scope of work which will create a variation to the contract if it is a fixed price contract. This can also mean an amendment has to be made to the building plans which, once you allow for the architect’s and/or engineer’s time and council fees, means you can be looking at spending an extra $1000-$2000 just for this change. We advise you to pick a reputable upfront building company and do your best to stick to the plans and choices the builder has priced off.
This is a great topic we love sharing insight into. There are a few reasons but the main reason is some companies provide enticing low quotes made up of provisional sums and leave items off their quote and scope of works. They will later sting you with these variations (items unquoted and not in the scope of works) to make up for the contracted low quote, which is unfortunately a bit of a legal grey zone in construction.
We may appear to be one of the more expensive companies when it comes to quoting as we always allow for everything foreseen, as being upfront and showing clarity is important to us. Unfortunately this occasionally causes us to lose jobs we are tendering for but we would prefer that our clients are not misled in the true cost of their building project.
Our advice to you when choosing your builder is too
- get quotes from 5 companies
- ensure you receive full detailed quotes and scope of works so you can easily compare what companies are covering in these
- take your time to research each company’s credibility
- question why the lowest price is so low, as well as why the highest price is so high and remember you are generally going to get what you pay for
A scope of work is a detailed list that provides you with every aspect of the job in chronological order. It is very important that your builder provides you with a scope of work and that you understand everything that is listed in it.