When it comes to building work and obtaining a building quotation it can be the start of a daunting process. How do you know which is the right builder for you? Are they quoting a fair price? We bring together 9 things you should know before you choose your builder.
Why is money such a complex matter in the construction industry?
It’s simply because the sums of money are large and buildings take a long time to complete so builders require stage payments, normally monthly valuations. They claim payment for the work completed to date and this in turn necessitates the complexity of price breakdowns. The items of work completed are checked against the pricing document and the quoted costs are paid. Without detailed pricing, this couldn’t be done. Detailed pricing protects the client against a builder over-valuing the work completed and ensures fair payment throughout the course of the works.
For the money you’ll be spending, you’re entitled to a decent builder
Dealing in large sums of money over many months, you need honest, fair dealing and competent builders who will do a good job for a fair price. You also want them to be stable and solvent, at least until your project is complete: how can you check on these things?
Checking the quality of work
Ask for testimonials and visit some sites, both work in progress (does the site look tidy, organised, secure and safe?) and completed jobs. Get the contact details for one or two customers so you can phone them – people will say what they really think on the phone. Try asking, “If you need more building work in future, will you use the same builder?” The answer might be quite revealing.
What about financial stability?
Companies House records on limited companies are available on the internet free of charge. Some limited liability partnerships’ records are also filed but not all. You can gather a lot from the available records. What’s the company’s nett worth? Do they owe a lot? Are they profitable? Do they submit their accounts on time?
Do they work safely?
The HSE (Health and Safety Executive) maintains public records of convictions and enforcement actions for health and safety offences. You certainly don’t want to find your prospective builder’s name there. Your intended builder should pass muster on all these tests: they should be stable, solvent, big enough and well enough organised to handle your project. They should have nothing showing on the HSE prosecutions and enforcement files and their board of directors should be reasonably stable.
Now you can make a shortlist
Choose companies that do good quality work, (and do it safely), have happy customers and whose finances and organisation are in good stable shape. Once your architect has produced a full pack of drawings, specifications and information, you can invite your favoured companies to quote – and once they’ve done so, what then?
Pick the cheapest of course
Unfortunately it’s not quite so simple. Firstly, what you end up paying will not be the bottom-line figure of any of the quotations you’ve got: time, site unknowns - and sometimes you changing your mind will prevent that, but the quotations will hopefully give you a good view on who you can best trust with your project in terms of quality of work and financial fair dealing. To do so, you’ll need to go through all the detail in the quotations you’ve got. Any that aren’t detailed, you can discard. The detail informs you, both in your choice of builder and in financial matters during the contract. Next, discard any that ask for a deposit in advance – the amount you’ve paid out at any stage of the job, should never be greater than the value of the work completed at that stage. You certainly should not pay money when the amount of work completed is zero.
These are often not fully understood by clients, they can add up to a considerable amount and may be misleading in quotations. A provisional sum is used when an actual cost of an item can’t be determined. Architects normally tell builders to allow provisional sums for a number of items so all the builders will have allowed the same for those, but individual builders will also have included their own provisional sums, which will be unique to their quotations. When the work is done and the actual cost becomes known, the provisional sum is deducted and the actual cost is added to the total price – so it’s a fair system provided the provisional sum was a genuine best estimate and not a deliberately reduced figure, designed by the builder to reduce their total quoted price. Remember, the provisional sum is used because the actual cost is unknown, so sometimes the actual cost will be higher. It’s only when the provisional sum has been deliberately set low that it’s unfair. If all your builder’s provisional sums turn out to be too low, you may suspect (but you can’t prove) that they were set low to make the total quoted price look low.
So how should you appraise competitive quotations?
Take whatever time is needed and get your architect’s help. The time it takes will repay itself if it gets you the best builder.
Break down the quotations into their sections and compare them section by section. Where a builder’s allowed a provisional sum, compare it with the average of corresponding sums in the other quotations. What would the quotation look like if you replaced the provisional sum with the actual cost for that item taken from the other quotations. It’s by going into the detail item by item like this that you can reach a more informed decision on which builder you would like to work with.
If one builder’s quotation looks good but one section is too expensive, you can phone them, explain the situation and ask if they can reduce it. It may be a mistake, it may be because they have some weakness in that area but it may also be because they set high standards that cost a little more. Hopefully, they might agree to look again at the figure.
Now look carefully at what you know about the quotations you are still considering. You have seen their good work, heard good opinions of them. You have established that they are solvent and behave correctly with regard to their annual returns to Companies House. You believe they will be fair dealing with regard to monthly valuations and provisional sums. Now is the time to look at the bottom line – but unless the prices are quite widely different, you may find that it’s less important now. You may feel you’ve identified the company you want to work with. You could never have achieved that by simply looking at the bottom line.
It can be a lengthy process but with any large financial decisions it’s worth taking the time. Our nine items of consideration provide an ideal place to start and ensure a great start in achieving your property goals.
Here at Saunders Brothers we care about our clients and our friendly experienced team are on hand to help if there’s anything you’d like to know. You can email us at email@example.com or call us on 01844 273783 as we'll only be too happy to help.