There is nothing worse than realising you cannot afford your dream renovation or house construction because it has overtaken your budget. Avoid budget blow-outs with some expert advices.
Avoiding Budget Blow Outs
People involved with renovating or building a house are often faced with the situation where they find the cost of their dream considerably greater than their original budget. There are a number of important steps that people who are considering customising building options can adopt to ensure they do not find themselves in this unenviable situation.
On occasion, people are under the misconception that their architect is in complete control of the project cost. The reality is that the lines architects draw are a representation of something that doesn’t yet exist, and until these representations reach a very high level of resolution, it is extremely difficult to obtain an accurate idea of the final cost.
There is often a cost gap between what the client wants and what they can afford. The anticipated outcome of renovations or building a house is an exciting prospect for clients. However this, with few exceptions, has budget parameters which often limit the scope of the desired outcome. It is thus vitally important that clients have a reasonably accurate idea of the full cost of their undertaking. We say reasonably accurate because with many different consultants, suppliers, approval bodies, contractors, sub-contractors, materials, fixtures and finishes being involved, the building customisation process is always going to be somewhat fluid. With this in mind the following practical guide should help clients manage the cost issue and avoid becoming a budget blow-out casualty.
Top 6 Tips to Avoid Budget Blow-Outs
1. Understand the architect’s role. Primarily this involves acting on a client’s behalf to control building quality. It is feasible that an architect could manage the other project consultants involved and also lodge the Development Application and possibly provide services throughout the construction process. It’s important not to confuse the architect’s role with that of a project manager, whose task among others, is to control project time and cost.
2. Engage a quantity surveyor. They are specialists in estimating the value of building construction costs. Clients should give the architect’s drawings to the quantity surveyor before the Development Application is lodged. The upfront quantity surveyor’s fee of $5000 is a way of ensuring there is not a budget blow-out later on. Further, it is a way of ensuring that clients don’t end up with an approval for something they can’t afford. Clients should take the time to understand what the quantity surveyor has and has not allowed for. These are the variables that will affect the cost later in the process.
3. Understand the market. Customising building is a lengthy process and could take up to 18 months. If there’s a construction boom going on and commodity prices are on the increase, 18 months could alter the cost of a project by 15 to 20 per cent. If clients don’t act on their development approval for a couple of years, the variations could be even greater. If this happens to be the case, clients should work with their architect to trim the project. Architects will charge for amending the drawings; obviously they have no control over the prevailing market.
4. Actively engage with the architect. It’s important for clients to explain exactly what they are looking for by talking about as much of their wish list as possible. This will help guide the architect in developing the outcome clients are looking for. Architects are not empowered to provide definitive financial advice, however, they can provide general information on possible cost estimates, based on their experience, during the design process.
5. Manage expectations. The gap between what clients want and what they can afford to spend, whether constrained by site or circumstance, is their responsibility to manage. The final outcome produced by the architect reflects what their clients have asked for. However, ultimately, clients must take sole responsibility for the cost of their expectations.
6. Assume nothing. It is critical that clients ask every question that comes to them regardless of how trivial it may appear. In doing so, they build a knowledge bank around their endeavour, which assists them make informed decisions.
