When it comes to estimating costs for a residential project, there is plenty to consider. From identifying the challenges of a site to working within design needs, a builder must balance the desires of the client with the scope of the site and materials on offer.
Often the price quoted at budget stage will vary from the final cost you commit to paying. However, reputable construction companies should be able to use their expertise and knowledge to provide the most accurate estimations at every stage.
Budgeting
The first step is budgeting, or ballpark estimates, which occur at concept design stage. These figures can be determined form average m2 rates and elemental rates – the cost of building elements per unit of measure (i.e. external wall complete as frame and internal/external linings). An experienced builder will also look to previous projects that are similar in size, scope and finish and evaluate a price off these experiences.
Feasibility
Once a broad estimate is found, the next step is to compare different options for cost efficiency. Builders are now working to a known budget and adjusting the design to maximise project outcomes. This stage often happens prior to final design, so that clients are free to make changes as needed.
Tender pricing
With a confirmed budget and all choices made, it is time for tender pricing. This is based on the confirmed design and is the most accurate of estimates in the process so far. Builders will work off a full set of drawings and desired specifications to ensure the suggested pricing is as close to the true cost as possible. This price also takes trades and firm quotes from suppliers and sub-contractors into consideration.
Contract sum
Once the tender has been adjusted it’s time for the contract sum. This final figure allows for final price adjustments but reflects the works covered in the building contract. It has a small number of variables to allow for prime cost items and provisional sums but generally is the price that both the builder and home owner agree to.
There’s nothing worse than expectations not being met and budgets blowing out. By entrusting a professional builder with these calculations, you have the best chance of committing to a home that’s delivered on time and in budget.