Browse Forums General Discussion 1 Mar 24, 2011 12:27 pm I've been working in the industry for about 13 years and the company I worked for only built homes using project management contracts. The funny thing was that I had no idea that this wasn't a common way of building, when I finally found out how most builders operated I was quite shocked. That the client had no idea how much every item plus works done would cost individually and couldn't shop the market for better deals? When the penny finally dropped I finally worked out why suppliers would tell me they would give the client a higher price when I did client selections. I would say back " um no tell them the price I'm getting it at, because the client will be paying you directly of course "??? I was so oblivious to the fact that the 'normal' way to build- is the client doesn't get the trade price passed onto them and will never see the invoice for the cost of the tiles etc. If a client of mine wanted to upgrade on a tile or change someting on the plan they have the freedom to do so without having a variation bill. If a client makes huge savings in one area of building they should have freedom to spend a little extra on someware else if the choose to do so. I don't understand the old and outdated way of building, clients are treated like incompetent children when it comes to making decisions and deciding where their money is best put, when the time comes to make that decision. Builders should be paid for what they ACTUALLY do, and the client should be able to see and hear WHAT they do, every week! Besides what builder wouldn't want to have a weekly cash flow? We are all adults and our money is more precious than ever so I truly hope the industry wakes up and moves into the 21st century and stop treating clients like they have no idea what's going on. The Internet and this Forum are proof that we ARE wanting change and have all the information at our fingertips. We are on the brink of a project management uprise! As you can't half tell this is a topic I'm very passionate about, every other industry has changed and adapted with the times and refined customer service all but one industry? Hummm let me think... I've experienced such great client feedback over the years When working with the project management system, the lines of communication are always open, and shock horror! Even after the project has been completed and no outstanding invoices! Wow, Thanks for listening to my rant! Sarah Would love to hear any thoughts I'm very interested in collecting client feedback on this subject. Re: Why Not True Transparency and Ultimate Service? 2Mar 24, 2011 1:10 pm Why not? Because every one wants more money for less work. Thats just the way society is, and if you don't operate that way you'll probably end up broke. Sad but true. Re: Why Not True Transparency and Ultimate Service? 3Mar 24, 2011 1:11 pm If I build a house with a project management contract, will I know how much I will be spending for a complete house? My parents were actually unable to complete their house because they ran out of money (at least the roof was on, they left out the floor coverings and other things, so it was still habitable). Metricon Riva 33 - http://herlihy-riva.blogspot.com Site start 15/03/2010 - Handover 23/12/2010 9 months and 8 days (284 calendar days) from site start to handover Re: Why Not True Transparency and Ultimate Service? 4Mar 24, 2011 1:19 pm . For info on our build: viewtopic.php?f=31&t=43093 Built the McLaren by Dechellis - slab down 22 Feb - handover 30 Aug 2011 - and gardens finished 9 Dec 2012!! Re: Why Not True Transparency and Ultimate Service? 5Apr 04, 2011 11:01 pm Hi Sarah, How many homes a year did the builder you work for build? I think that's a pretty big generalisation to say builders treat clients like they are children. I can vouch for a lot of builders that treat clients very well. Smaller builders can certainly operate this way, but i think for some of the major project builders that way simply wouldn't work. I think a lot of builders present the client with the contracts etc which you could deem as being the rules, if a client chooses to fall outside of that why shouldn't they be penalised? If its a change that is going to affect progress, why can't the builder charge for it then? If the builder goes over the contract time they're certainly penalised for going outside the rules. People should be allowed choice but people also need to realise that it has to stop at some point. It may seem easy for one client to change their mind, but imagine if you had over 100 changing their mind every week. Before you know it your admin time starts creeping up, you need more staff, you then need to cover your overhead and before you know it, the price of building has gone up. A builder will charge margin but they have every right to. Ever wondered how much margin is on the tomato sauce you buy off the shelf at Coles or Woolworths? At the end of the day, charging for a good or service is part of the spirit of free enterprise. And yes, i am a builder But i like to think of myself as an honest person and try to be as fair as possible to clients. Over the years there have been times when i was within my right to charge clients for items but i didn't. Why? Because i'm interested in a healthy building relationship which is based on trust and respecting the rules. Those clients have been appreciative of what's been done and i believe it's kept things fair. Jay W Re: Why Not True Transparency and Ultimate Service? 6Apr 04, 2011 11:53 pm Not many people work out of the kindness of their heart so I'm sure you were making a profit in your business, I'm assuming you charge a one off fee for clients. Some clients add $100k worth of items to their home, and some add only $10k. Obviously $100k worth of additions will be much more work for the builder - in estimating, drafting, scheduling etc, and if clients were given a "one off" build cost, the builder would have to average these overhead costs - would it really be fair that the people who spend only $10k will be covering the extra overhead costs that are involved in $100k of extras? When you walk into Myer you don't get charged a one-off entry fee with all their items being sold at cost price? Myer would have to charge a higher one-off entry fee to account for the lack of profit on say a cost-price sofa, whereas I may only want to buy a pair of socks - how is that fair? Unfortunately, some clients want to change their minds 10 times for each part of their home, and this can be at the very last minute after much work or ordering has been done by the builder - so larger builders try to discourage this by having variation fees. Variation fees just help streamline the process by acting as a deterrent, especially for project builders who have hundreds of clients. Most builders will have a very reasonable level of leniency when it comes to variation fees, and will often only charge the fees if the client has made several last minute changes, or if extra work is required due to the change. As jayw mentions, smaller builders often have the ability to be more flexible, so clients should consider if this is important to them when choosing their builder. The issues you bring up are not applicable for all builders, it all comes down to clients finding the right builder. People just need to do their homework on forums such as this, and see which builder can offer them what they want. Re: Why Not True Transparency and Ultimate Service? 7Apr 05, 2011 12:18 am Agreed. As a side note, i think people need to sometimes trust the builder with the way they do things. As a builder, we build homes every day and over the years, will establish a best practice on how to do things with the clients interests in mind. In doing this, some people may wish to do things a particular way - with some builders - that's fine, but people need to be patient as it may not be the usual way of doing things. One observation i have made on here quite a bit, is that often when people have had problems, one of the last people they will tell or speak to is their builder. How can a builder be expected to fix or be aware of something when the client hasn't communicated to them how they feel? Often things are built to comply to a standard, and if no one says anything and it's been built to that standard, nothing more will be done. Building is a lot like a relationship in that communication is paramount. I think part of good customer service is the builder following things up, but it also comes down to the client keeping in touch as well. Re: Why Not True Transparency and Ultimate Service? 8Apr 05, 2011 11:24 am The mark up on products is usually to cover time and energy sourcing the products and finding information. It is also standard for trade to get a cheaper price as they continually buy products so are return customers, as opposed to private buyers, which are generally not. If you want to give your time for nothing, that's very Noble (although I'm guessing you recoup by charging in a different way), however, I wouuldn't expect someone to do my legwork for nothing. As for the transparency in all other areas???? Drug companies give LARGE rewards for recommending their products Financial planners have a percentage tracking fee on products sold (or fee for service) etc etc.... And in most fields wholesalers / manufacturers gives good prices to those in the trade as it is marketing for their products. Re: Why Not True Transparency and Ultimate Service? 9Apr 05, 2011 6:41 pm jayw Agreed. As a side note, i think people need to sometimes trust the builder with the way they do things. As a builder, we build homes every day and over the years, will establish a best practice on how to do things with the clients interests in mind. In doing this, some people may wish to do things a particular way - with some builders - that's fine, but people need to be patient as it may not be the usual way of doing things. One observation i have made on here quite a bit, is that often when people have had problems, one of the last people they will tell or speak to is their builder. How can a builder be expected to fix or be aware of something when the client hasn't communicated to them how they feel? Often things are built to comply to a standard, and if no one says anything and it's been built to that standard, nothing more will be done. Building is a lot like a relationship in that communication is paramount. I think part of good customer service is the builder following things up, but it also comes down to the client keeping in touch as well. I totally agree! I think people forget at the end of the day that they as the client are contracting someone to complete a service to deliver "goods" to them - just like we shop around for the right hair dresser because we like the service and quality they provide, or the right mechanic as we like the way they work and trust in them or the right school for your child/ren as you feel they will be well educated and looked after - people have to consider the type of service they want to receive when contracting a company to build their house - I mean it is by far the biggest investment one would make financially.... for instance you wouldn't go to a McDonald's restaurant if you expected table service and a 3 course meal... Communication is paramount in any relationship whether it be with a friend, partner, employer or a contractor... if you don't voice your expectations... how the hell will they be achieved??? If you don't ask the right person the questions... how the hell will you receive the right answer? Referring to the original post here... if a client is happy with a service that a volume builder offers... then they agree to the terms that the builder adheres across the board for all clients... I'll make reference back to McDonald's here... If you want to buy a Value meal at Maccas but don't want the drink and want a sundae instead... no sorry "we don't do that" you have to buy all of the items seperately... it costs more money then... due to the item/"goods" not being what the majority of customers order... granted it is off two different ends of the spectrum in terms of dollar value... but this is what creates efficiency, thus reducing costs for the supplier/contractor/Maccas! and therefore that saving is passed onto the consumer... Sleven Moved into our Atlantique MkII 36 by Carlisle Homes Does anyone have a suggestion for a good hydronic in slab heating speacialist who may be able to help me with an existing system and wether or not it may need a seperator… 0 4888 That sucks! Hope it all works out. Good to move away from steel anyway for all your reasons, but it's also thermally poor. 16 17890 |