What is too cheap?

Good Question! It's not always clear in the construction industry but by doing comparisons and research we can often build a picture of what the price should be (and what represents good value).

There are some simple indicators that indicate a problem or discrepancy:

• If the new build price is cheaper than existing houses in the area, this is a clear red flag.

• If your comparison shows one builder quoted significantly below your comparitives, there is likely something wrong with this pricing.

• If there are a lot of tags\exclusions on your quote, this indicates an inexperienced builder.

• If your research brings up feedback about a builder having a lot of variations through the process, this is a sign that the builder doesn't have the knowledge or skill to estimate a price within the realms of best practise and these builders should be avoided.

• Your pricing should be in line with industry norms and a lot of local websites have the latest construction data available that you can research to understand building pricing.

• It also pays to be on forums and social groups to discuss pricing and specification to be able to understand benchmarks from industry professionals.

If you go onto social media and look at videos from professionals in the field, you will see what issues there are in the industry. The "Site Inspections" guy on youtube and instagram has a lot of videos highlighting the problems in the industry with work quality, particularly around structural and weathertightness issues. I'm not sure how much of the industry is dodgy builders, but I'm confident the number is quite high and I would even go so far to say getting a good builder is a "flick of a coin" from a risk point of view. Now, why has this occurred?

A number of factors really.

1. Good Inspections and Quality Control. The policing of the industry hasn't been suitable. This is a fairly major part of the issue and will continue to be rectified.

2. Corruption & Greed. People buying (or borrowing "license lending") builders registrations to work in the field who have less than honorable intentions and being allowed to by corrupt employees at the building authority.

3. Clients - yes, clients are part of the issue. As long as we have a culture that chases the cheapest price, we will have inscrupulous people who will work for that and cut every corner to ensure they make good money out of the project.

4. Control. There are control issues within the industry that are allowed to exist. I'll give you an example. A Builder was delaying the build deliberately because they knew the client was under financial stress having to pay a mortgage and rent. The builder was trying to leverage completing the works to get payments prior to those payments being due under the contract. This is highly illegal, but rarely gets prosecuted because the the client will not complain in the hope that they can move in and allieviate some of the pressure. Usually, in this instance, the build is of such poor quality and the client is forced to accept sub-standard work. There are solutions to this problem that can easily be enacted to have a fairer more equitable system.

Now, back to the original point. What is too cheap? The easiest way to solve this is to do your research, ask trusted tradesmen you know directly or through friends and make it your business to know the right amount of information to be able to undertake the process. You don't have to know everything, but you have to know something.

Signing off...

Revell