Progress update
Thanks all for the input/opinions to date.
Update time, apologies for the wall of text.
Builder chosen.
Just before Xmas we committed to a builder for our project. It came down to a two horse race with builder 1 constructing in double brick lower and masterwall/framed upper, builder 2 would have been using SIPS panels upper (with an option to also do SIPS lower, with a SIPS slab if we wanted).
Although speed of delivery for the SIPS option (builder offered a guaranteed 20 weeks to hand over from slab down if all SIPS) was an extremely large incentive to choose builder 2, the lack of a completed building that I could view that used entirely SIPS (I especially wanted to see a SIPS slab) plus the lack of technical details they could provide swayed me to builder 1.
I will definitely be re-evaluating the SIPS option for my next development as I was really impressed by the concept and the reduced timeframes, but it was a step too far into the unknown for me and my first development.
So looks like Inspired have got our business for this project, my choice being based on their pricing, spec inclusions, their willingness and ability to offer suggestions to improve the design and construction materials used without affecting quality or end cost, the workmanship quality of previous builds I viewed, as well as the ever important ?gut feel? you get when dealing with them.
Inspired will be building the project turn key for me.
Construction cost increase
I had initially estimated construction costs would be around $700k turn key, but the cheapest I could get will be closer to $750k, approx $650k for the building and $100k to bring up to turnkey.
Obviously the cost increase reduces my estimated return for the project, but it can be accommodated within my finance limits and does highlight the importance of confirming as much detail during your due diligence as possible. I think confirming construction costs is pretty hard to do when its not a ?vanilla? product (eg single level triplex villas), but I will be erring on a more conservative side for subsequent projects.
A tip for new players. Where I made my mistake was my estimation used a rudimentary $ per sqm calculation for the floor area of the total site. What I didn?t take into account was that although my total sqm for the project is relatively small (approx. 250sqm for three apartments), each apartment will have a kitchen, two upstairs bathrooms and #1 and #2 have downstairs toilets. So that?s 3 kitchens, 6 bathrooms and 2 separate toilets over 250sqm. As these room types cost more than bedrooms/living areas etc, it undercooked my initial estimations.
DA application.
Plans have been submitted to council about a week ago, here?s hoping they review the plans as quickly as they deposited my application cheque!
I previously said I would post up a copy of the plans once committed to a builder, but I think I?d now rather hold off making the plans public until we get through the DA process.
Using a building broker
Please note that below are just my personal experiences to date in using a building broker, not a review, criticism or endorsement of their services. What I found good or bad may be different in your circumstances.
Using their designer ? I was very happy with their in-house designer and his ability to translate my garbled set of ideas/needs/wants into a usable design. No qualms there from me. The thing to be aware of though is that you don?t own the plans, the broker retains copywrite, ?releasing? the copywrite once signing with a builder through their tendering process. So while you do get an advantage of having builders all tender off the exact same set of drawings, its similar to if you approached the builders individually in that you don?t own the plans outright. You?re not locked into one builder to use those plans, but you are locked into going through your broker to use those plans. Also note that you can choose to bring your own plans and just use the broker for tendering.
Initial tendering ? this is a stage of the process that I feel there was value for me in engaging a broker, on two fronts. Firstly if you don?t have the time to canvas builders yourself, secondly my experience is the ?hit rate? for responses back from builders is higher through the broker than if doing it yourself. Approaching builders yourself ?cold? can be a frustrating experience with many calls not returned/time wasted. The broker was also happy to engage and send out tenders to any builder of my choosing that wasn?t on their list.
Independent tenders ? the broker also had no problem with me doing my own independent tenders if I wished, to ensure the pricing was competitive. I actually did this, receiving back one verbal estimation and one written estimation, both tangibly higher than the two shortlisted builders through the broker, but lower than some of the tenders received back through the broker. This gave me some comfort that I was at the very least getting competitive quotes back using the broker.
Shortlisting prospective builders ? while the intention is the returned tenders should all be based on the same spec list, this is not always the case. There is still a fair bit of interpretation needed when comparing the responses, more than I would have liked/expected. But two builders stood out on costs and inclusions.
Choosing a builder ? this decision is (rightly so) completely with you to make, the buck stops with you. I think a broker may add value here if you were completely new to negotiating, especially with builders, but I felt comfortable enough to do this part with or without them there.
Cost savings? ? this part I still think is (and may always be) unquantifiable. Their fee is 2% of the contract price (so in my case $15k), ?paid by the builder?. So assuming that all the builders that tendered have included that 2% in their quotes, the question is ?do I think the quotes that were returned (including the 2% going to the broker) would be equivalent or cheaper than if I was to go direct through the builder myself?? This is what is hard to measure as every project/set of plans is different. The fact that I received back two independent quotes higher than some of the broker tender responses gave me comfort in this regard.
Conclusion to date - As mentioned before I am confident I received competitive quotes, from a wide list of builders that I didn?t have to approach, and selected a builder I am happy to proceed with. I?m happy with the services they have provided and the end result. Could I ever put a specific dollar figure on the savings (if any) using a broker? No, I can?t say I could.
Next steps?wait for council to come back with their response. So next update will be in 6 weeks or 6 months.