Fact Sheet 6 – What’s in a Price?

In Owner Builder Latest News, Uncategorized by G G

How does your client know they have a good price for materials and services for their project? It does not matter if the project is a new home, extension or renovation; the right price for the job is essential. The cheapest price is not always the best, but then again neither is the most expensive. A little investigation will go a long way to identify which is the most cost effective price for labour or materials.

When asking for pricing it is essential to spell out the responsibilities of both parties. Ensure all the relevant details are clearly spelled out in the quotation. A good tradesman can usually anticipate possible problems and it is best to discuss the potential difficulties. The experienced tradesman should be able to provide an indication of the cost, should problems occur.

Any renovation project should have some extra costs factored in to take care of the unforseen problems, which may be encountered. What can look like the lowest price is, sometimes, not what it seems to be. Some essentials may have been left out, so, always compare the quotations and make sure they cover all of the works discussed. Ultimately it is the owner who will have to pay for extra works completed.

If a tradesman has overlooked an obvious problem in the quote or contract, he can be reasonably expected to fix the problem, at his cost. However the reality is that this could result in a dispute, which is both stressful and unproductive. Take care when comparing quotations to ensure none is missing a major item included by the others. You will find that minor problems, such as replacing a few bits of timber, will be covered by the tradesman.

The tradesman is expected to provide a materials list when quoting. This will outline, in details, what’s expected to be used during the project. Without the list it’s anyone’s guess as to what will be used. The list needs to be specific, outlining the price for each item and include the timetable and payment schedule.

Some tradesmen prefer to use a system based on allowances. That is, placing limits on generic items such as carpets, tiles or fixtures and this can be the cause of some disputation. It is far better to clearly identify the exact product to be used in the project; after all, your client is the one choosing what they want. Some tradesmen have been known to substitute cheaper or inferior products, and while they may look the same, the difference in quality soon becomes evident when they fail, chip or stain.

A good estimate is more than just a list of materials and labour costs. A good estimate will outline the entire scope of works including the timetable, payment terms and warranty for the completed works.

The complete estimate is the most important to attain as this will allow your client to compare each tradesman against the other. Make sure everything they want is included and if any quotation is missing a crucial item included by the others, query the tradesman as to why. By comparing three quotes your client will be able to make an informed judgement as to which of the tradesmen will be able to complete the project best.

Your client is also within their rights to ask for some recent references from tradesmen. The professional tradesman will be able to provide the owner with three to four recent clients. It is important they are followed up and ensure the client was satisfied with the works carried out as well as the punctuality and professionalism displayed by the tradesman.

What if my client changes their mind about owner building my renovation or extension?

If your client decides to use a registered builder to complete their dream project, Renovators Home & Contents is a MUST! Visit our Renovators Home & Contents Insurance page or call us on 1300 850 131 for more information.