When thinking about building a granny flat, an important step is gathering quotes and breaking them down. So, what are the best ways to get granny flat quotes?
- Compare at least 3 quotes
- Ask for a “turn-key” price
- Be aware of “hidden costs”, and request a list of exclusions
- Ask for a “Policy on Unforeseen Building Costs”
Today I will discuss how to best negotiate with a builder. I will cover what is “included” and excluded from your quotes, as well as a lot more.
So, lets uncover the best way to save money now.
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How to Negotiate with a Builder
Many builders won’t budge on cost, unfortunately negotiating doesn’t work the same as at ‘Bing Lee appliances’ but it is still possible.
Communication is Key
The first thing you must do is find a great builder, whose lines of communication are open and honest.
I wanted to cover this briefly, as you really want to find a great builder before trying to get the price down.
Saving money and negotiating is easier than you think
It’s important they know:
- Exactly what outcome you wish for your granny flat.
- Your preferences and priorities.
- Specifics for you build (As the price needs to be fixed to these)
Consider When To Build
A handy hint I got from a member of my family in construction – a bricklayer – is to build during their off-season.
Like many industries, construction also has months of the year when they are hard-pressed, and others when they are slow-going.
It’s possible to save as much as 15% by building when they have less work – for contractors, it’s generally winter.
Another benefit of building at this time is they are un-rushed, so have more opportunities to:
- Arrange meeting with you.
- Discuss all your queries, and
- Talk over every point of your budget, finding places where you can save.
It’s important to note that there is a purpose for off-seasons. You must be prepared for the inconveniences that come with them. For instance, a builder will work in the rain, but your site will be more messy as they trek through the mud.
Also, understand if your builder delays work due to the weather. It’s dangerous and not a reasonable use of time to work in serious rain or wind.
If discussing this option with your builder, ask if you can change the start date, allowing them to work during their least busy period.
Remove Unnecessary Inclusions
When meeting with the builder, this is your perfect chance to save. Make sure you go over their construction schedule them and ask them to break down every single cost for you. I have seen builders charge for work as a ‘lump sum’. This makes it easy for them to hide excessive profit margins in there.
Always ask questions about anything you don’t understand. Often, they presume you want things you don’t. Or might add it in to the job as they can make a margin on it.
Meaning, some standard inclusions in their quote may be not be necessary – they’re simply for show.
If these ornamental features don’t interest you, you can save hundreds i not thousands of dollars by taking them out of the quote.
One simple example is a tradie quoted me $1700 for a split system air conditioner to be installed. However I found that the price of the exact same unit at Bunnings was $900 and the “install-only” price was $400. Meaning I saved $400 for just one trip to the hardware store.
When meeting with your builder, there are 2 ideal places to negotiate:
- Finish upgrades (i.e. floors or lighting fixtures), or
- Change order items (i.e. custom items such as non-standard inclusions, for example built-in speakers).
If you’re thinking of making changes to the granny flat after you move in, see if the builder will work with you, making them now instead. Particularly, any items the builder can do during construction that would be more expensive for you to do afterwards.
It’s possible to get a builder to add upgrades such as:
- A landscaping package.
- An appliance package or upgraded appliances.
- A washing machine or clothes dryer.
Ensure you are completely happy with the contract before signing
NOTE: (This is very important) If you do adopt this method, ensure you ask for these changes to be added to your contract upfront before signing anything.
Decide What You Can DIY
This is also your opportunity to:
- Figure out what parts of the project you can do, and
- Discuss sourcing materials yourself.
Regardless of whether you have/haven’t done a DIY task before, there are probably a few things you are capable of doing on the contractors schedule.
Some examples are varnishing and painting – these simple tasks can take days off your builders’ timeline.
You’ll be surprised how much you save by doing some of the work – you won’t spend so much on contractors labour (an average of $50+/hour).
Painting is possible to do yourself. But remember it takes a novice longer than a professional
Though it’s important, that, if you take on any part of the construction, to:
- Ensure your responsibilities are explained from the start, and
- Liaise with the contractors regularly.
As, if you didn’t have items ready on site for the contractors by the date you were meant to, this can delay the build, costing you more. Also, be realistic about what you are capable of doing – if you can do it, you can save.
But if you don’t know how to do the job, it’s likely to cost you more when paying a contractor to rectify your mistakes.
I recommend leaving plumbing and all things electrical to professionals. (Also since plumbing is a legal requirement you cannot do yourself)
For ideas, feel free to read what I did when I built my granny flat.
You can ask the builder if there’s anything at all they will do to bring down the overall cost of your project. For example, if you know people who are looking to build in the future, offer the builder leads.
You could also provide them with the space out the front of your home for advertising or offer your help as a labourer to bring down cost as well. They may or may not be open to this idea, however it doesn’t hurt to ask.
How Many Quotes Should You Get
I have learnt from building my granny flat to get at least 3 quotes every time.
There are times when I didn’t do this, and it didn’t work in my favour.
For example, I knew a local plumber who had helped out with the odd job around my home, and did a great job. Being a total newcomer, I trusted him with the work, so didn’t go to the effort of getting any quotes. This was an error on my behalf.
You can read about how this cost me more than I budgeted for, and since speaking to other plumbers, far too much.
So make sure you take the time to get at least 3 quotes from every contractor – this can save you a lot.
Ensure What is Included and Excluded
It’s important you take note in your contract of your inclusions and exclusions. You will need to set aside money in your budget for things that are excluded but necessary.
The last thing you want is to be surprised when your finished granny flat doesn’t look exactly like it did in the brochure.
For example, landscaping is not included, neither are all screws. In both builders and kit homes, downpipes and gutters are excluded. A great display of standard inclusions can be seen at Granny Flats Australia.
Below, I will continue to talk about the “surprises” which cost extra.
Common Exclusions that Surprise People
There are several things not included in a builders granny flat that have taken many by surprise. I have listed the most common.
- Groundwork – If you have a large tree or shrub that must be removed to allow space for your granny flat, you will be charged extra, including waste disposal.If you have a shed, garage or any other structure that must be cleared to make way for your granny flat, you will be charged for its’ deconstruction, including its’ slab.
- Poor Drainage – When building a granny flat in NSW, you have regulations for drainage systems that can be seen in the NSW Granny Flat Fact Sheet. But, if your site slopes backwards, these drainage options may not be available, and you will need to install a ‘Drainage Dispersion Pit’. I have found this great article which provides you with solutions on how to save money if this affects you.
- Fencing – If you’re planning on renting out, you may want to install internal fencing to increase privacy.
- Letterbox – Another letterbox will be needed for your granny flat, so your postie can deliver mail to the new dwelling.
- Clothesline – Though not overly costly, another clothesline will need to be included in your budget, especially if you’re renting out.
- TV Antenna – Ask whether an antenna is included in the quote – this is often “forgotten”.
- Cleaning of site – This is why it is a wise idea to ask your builder if you can view work sites they are still doing / have just finished. They don’t necessarily have to clear your site once they have finished, leaving you with a lot of mess to dispose. But a good builder will take this with them.
- Connection to Utilities (i.e. water, power, phone)
All of this can generally be arranged by your building company, but will cost you more.
How to Break Down Quotes
By now you should know to get at least 3 quotes. However, ensure to request a written copy, and ask for the “turn-key price”.
What is this?
Well, in this industry, you have 3 different prices. There’s the “lock-up price” – this is most commonly advertised. It generally doesn’t change, unless you make significant changes to the floor plan.
There is the “completion price”.
This price changes, depending upon your personal taste. It’s the final price after the:
- Lighting fittings.
- Floorings, and
Have been chosen and installed. So if you choose more expensive fittings, this price can vary dramatically.
Then there is the “turn-key price” is closer to the price you pay when you turn the door key and move in. So, it’s a wise idea to ask for this price. The overall prices includes many of the typical exclusions, such as:
- Connection to utilities.
- Internal and external finishes.
- Wall tiles.
- Hot water system, etc.
Meaning, you get a better idea of the final cost you can expect to pay, and more accurately compare each quote. Most builders won’t advertise their turn-key prices, but you can ask for them when getting your quotes.
So, if you have found what you believe is a great builder, now you must break down your granny flat costs.
Remember, your builders’ morals should be open and honest – this can be gathered from their quote. Be wary of “hidden costs” in your quote – in particular Site Preparation Costs.
If your builder (or a company they have outsourced) didn’t inspect your site before handing you the quote, you can be pretty sure this isn’t correct, as:
- They haven’t gained precise knowledge, as they didn’t undertake a thorough inspection.
- So, don’t know costs such as tree removal or destruction of existing structures.
- They have based the quote on having easy access to your property, which may not be accurate.
Another area to ensure you read in-depth is “Fit-Outs”, as this is well-known for hiding costs.
Also, check with your builder they have included all fit-outs, such as flyscreens, taps, door handles, etc.
If not, this can largely impact your budget.
Make sure the “Energy Efficiency” recommended in your plans (i.e. the level of insulation or need for glazed windows) has been recognised. This will be found through your BASIX Requirements.
This means the builder will use the correct materials, and the cost is accurate. Though some costs cannot be predicted, ask for your builders’ Policy on Unforeseen Building Costs. This should detail what steps they will take if a mishap was to occur on site (for example, hitting a pipe when digging down).
It’s uncommon for these issues to arise whilst building, but it’s wise to know how they will affect you if they do. Once you’ve chosen a builder, to safeguard yourself against “hidden costs”, request an “exclusions list”.
Even the “turn-key price” will have exclusions, so ensure you ask for this – it will show everything not included in your quote.
It’s important to note the cost of inclusions you choose (i.e. your fittings and fixtures) may just be an approximation, as the:
- Precise make, model and amount may be unknown until installation.
This great article by a builder explains in details what items are an unknown cost and why. Make sure your builder knows that you must be advised of every change to the building schedule, including:
If materials are to be exchanged, they are to be traded for ones that stay within your budget.
If not, they may switch fixtures and fittings for ones that cost more. The last important question to ask your builder is – “What’s the final date I can make any changes?”.
You don’t want to get charged extra, unnecessary fees because you change your mind halfway through your build. So, find out your cut-off date for modifications, and ensure you are delighted with your design before then.
If you’re concerned that you won’t be able to go through the process of getting 3 quotes yourself, enlist the help of a quantity surveyor. They can also specialise in costing new builds, and can help you set a budget so nothing is missed.
Can You Ask for Separate Material and Labour Costs?
Unfortunately, a builder is putting a markup on materials, making money on them during your build.
So, it helps to talk with them, to see if you can source your own materials whilst they perform the labour. First, ask for an estimate (in writing) from the builder, that outlines every single cost of your project, including the:
Now you know every cost, tell your builder you would like to purchase some materials yourself. It’s wise to do this IF it helps to reduce the price they have given you.
I will discuss this under “Will a Builder Let You Buy Materials Directly?”. However, an example is the cost of materials vs. labour when I built my granny flat.
I wanted my roof to be colorbond, so I paid a visit to the local metal fabricator who works for Colorbond metals. The quote I received for the materials was $1690.
However, I was uncertain about doing the labour myself. So I hired a roofer, knowing he bought the materials from the same place I just got my quote from. He charged me $5662.81 – so the difference (roughly $4000), is labour alone, for 2 people working for 2 days. So, you can see what I mean about this point.
Will a Builder Let You Buy Materials Directly?
A builder will most likely markup materials on your invoices, making money on them. This is standard practice – it partially covers the time they spend finding, buying, storing and transporting the materials as well.
Raw-building materials is the easiest way to save by buying them yourself.
To ask to source the materials yourself, you’re asking them to reduce their margin.
However, there is a way to do so without upsetting your relationship and the project as a whole. In your initial negotiations, be sure to talk with them about sourcing your own materials.
If for any reason you have forgotten to do so, it’s still possible once building has begun. Any reasonable builder should be content with working on “open-book” terms (with transparent fees and charges).
They shouldn’t be insulted if you ask to explain any costs. Start by asking them for itemised invoices, and don’t be nervous about querying their sums. Then, think about sourcing materials yourself whenever you can.
Though sometimes tradies and subcontractors get discounts from suppliers, (i.e. cheaper prices on things they buy in bulk), this can;
- Add to their charges on labour when sourcing these products.
Just know that, if you choose to source the materials, you will be responsible for;
- Storing them.
- Ensuring they arrive on site by a certain date and time.
- Making sure the build is not slowed down because of a mistake you made ordering materials
This can be time-consuming and stressful.
It’s also possible the builder will increase their costs elsewhere (i.e. on labour), to make up for not being able to markup on materials. It’s important to note that, if you allow your builder to continue sourcing the materials, that you;
- Only pay for materials that are delivered to your land. Don’t let the builder buy products for multiple jobs that are divided elsewhere!
- Check over items (especially more expensive components like vanity units or cabinets) before installation, to ensure they are not chipped, cracked, etc.
Building a granny flat is exciting, but can also be intimidating, especially if working to a budget. When it comes to creating your dream team to construct your new dwelling, one of the main players will be your builder.
The way you work with your builder can drastically impact the way your project progresses, and thus the final outcome.
Ask for a “turn-key price” – an all-inclusive, detailed quote. It’s important to have an open line of communication with your builder, and keep those lines open. After all, you want to be always informed and in control of your investment.
Ensure they know your priorities, and ask their advice on finding ways to save.
Remain on good terms with your builder, even when asking to source materials yourself. A good builder will recognise issues straight away, and allow you options to save money. They will know how to assist you, even explaining their quote in detail, allowing you to remove unnecessary inclusions, and perform any jobs you can do yourself.