Negotiating with Builders

J

JWR

Hi guys,

Its been a while since I last posted.

Am a little less green now with a few IP's under my belt.

Was after a little help from those who have the experience.

I'm currently about to start constucting on a few blocks of land I recently bought in Regional NSW.

There are 9 blocks I've bought but I am only building 3 first up and then will refinance and build the rest.

I have a fairly competitive price for builders (Dixon Homes) - just over $1000/sqm for a 4bdr house with an attached 2bdr granny flat. Brick veneer with ensuite, iron roof etc... (excluding site costs though)

Is there a way to get this price even lower? I want to do this delicately as I do not want to lose the builder - as they are the best for my situation in terms of price and service - yet I feel as though given the fact I am building quite a few that I should be able to negotiate harder.

The lure of the other 6 and potentially more in the future don't seem to sway the builders (I am guessing because its not guaranteed until I sign)

Main cost saving areas I see are:
- getting same price but better quality fittings
- try to get cost savings through having one tradesman complete 3 houses at once (i.e. moves from house to house)
- negotiate on high margin areas of the building
- Site costs

I know they only build 20 per year (the franchisee told me in person) and was quite keen for my business when I met him 2 months ago.

My uncle and grandfather are both builders in other areas of NSW so they will be having a chat with the builder - I just would like any ideas to help get the price lower.

PM's welcome and happy to meet face-to-face with anyone who wants to give me any kind of help! Have the designs and quote for anyone to see who thinks they can help.

Thanks,
James
 
I'd be asking for more inclusions rather than discounts. Builders are much more receptive to that. When we built first time around we worked out what was essential for us rather than getting upgrades. We ended up getting free letterbox, flyscreens, exhaust fans, additional tv and phone points. One builder was going to throw in free turf.
 
Hi Beachgurl,

Thanks for your advice.

I do need fencing to separate the tenants as well as driveways, landscaping, letterboxes, clotheslines etc...

In reality I'd like 10%+ off the price.
 
too bad you are in NSW or else i can offer my services to source windows, flooring, kitchens and bathroom tiles. basically that would be 60-70% off what you expect to pay here.
 
I would get an all up price for your 1st place and then negotiate you may get a few $$$ off plus a few inclusions.

How many other quotes have you got to compare with.

Remember the cheapest is not always the best, I'd rather pay a bit more and have a builder I can trust to do a good job and no hassles.

As you said nothing is set in concrete yet, maybe get a price done per block and time frames for the builder so the builder sees you are serious and maybe more forthcoming with a discount / inclusions.

Brian
 
JWR said:
Hi Beachgurl,

Thanks for your advice.

I do need fencing to separate the tenants as well as driveways, landscaping, letterboxes, clotheslines etc...

In reality I'd like 10%+ off the price.
Click to expand...
Given that most builders are operating on around 20% margin on their projects, I'd say it's a big ask unless they are desperate for work.

You'll just **** them off and they'll cut even more corners than already do.

It's gotta be a win for everyone - not just you - so, get quotes from 3 or 4, and if you want to go with the cheapest, then ask him why he is so cheap compared to the others.

And, ask for reference addresses and owners to go and visit.
 
Maybe look at giving a little on your end first.

If you're serious about continuing the relationship with your builder on further deals & feel there is more money on the table ask him now to offer you a rebate on your next deal if you do proceed..

Builders & subcontractors have all heard the 'i've got plenty more work coming up so look after me' story, but many developers fail to follow through on the talk.

Get your builder to agree to a rebate/discount sum or % before signing up the first deal for your proposed next deal.

This will show him you're serious about continuing the relationship & that you're confident your future projects will progress to build-stage.

It will also motivate him to ensure your happy with his service so he can secure the next project - more so then just saying you've got more work ahead..
 
We've just gone through another round of tendering and found not only have build prices increased significantly from what builders were quoting 6-12mths ago, we're struggling to get any builder to give any type of discount.

Ours are community titled blocks (common access driveway involved i.e. they're not all street frontage homes) and we've found the thing thats making a big difference is the civil works. The homes themselves aren't really expensive its the civil costs and so now we're looking at just bringing in the builder to just build the homes, hand them over to us and we come in and subcontract the work for everything else to be completed (i.e. common driveway, fencing, retaining walls, etc). Doing this we believe is going to allow us to come in on budget, not what we'd prefer which is the builder to manage and complete the entire site but hey, if thats the only way we can reduce our costs then so be it. Its really no big deal anyway so if you have an option to do that, this might save you a good few thousand.
 
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