Browse Forums Building A New House Re: What is a reasonable Builder's Margin? 41Jul 22, 2018 5:06 am As an engineer who also builds, I used to wonder if people asked their brain or cancer surgeon about their margins. I understand the natural inclination to minimise costs when variations in quotes run into thousands but many customers do not consider the wide variation of quality out there. As an example, subcontractor plumber/electrician/bricklayer/carpenter/painter etc etc could have different sized crews of varying experiences. Let's say I am building for clients : one house or two duplexes versus a medium density development of four to six townhouses. For the former, I'd insist a subby to have no more than one first/second year apprentice with someone fully qualified always onsite whilst on bigger jobs with two per final year apprentice or full ticket. This ensures quality of work. Some crews will have four or five of these juniors per qualified tradesman. If you consider the wage costs between junior apprentices and full tickets, it allows some subbies to be 'very competitive'. In turn, builders willing to use such crews can also be very competitive. Add the number of different trades...thus the large variations. Sorry but if I don't want the business for a reason..I may also hike the price. Some builders also use more costly methods. For example, I cut the driveway early and pour 50 to 100mm layer of volcanic crush scoria after the house slab is poured plus slab surround. To me. it's a necessary protocol. Cleaner safer site during works and better driveway for the client. That could run into a few thousand dollars sometimes so I have to allow such. Most single house builders will not. Factory frames no longer consider stud channels necessary so I attach periodic stops to top and bottom plates despite it being 'unnecessary' because it is simply outdated secondary insurance due to modern timber ratings. Possibly only needed once every thousand times. One days extra work for only 20 dollars worth of timber. But priceless peace of mind. There are one or two others deemed good practice but also others which I'd say horses for courses. These are the same factors for ANY business in any industry. Costs versus pricing. But as the final occupant or developer who onsells, are you willing to take the product risk ? Fancy sleeping under a questionable ceiling ? I have seen all sorts of rubbish put up by cheap subcontractors and am unwilling to use such. Without adequate compensation for the builder, you risk hundreds of thousands to save a few thousands by using substandard. A builder with a normal margin will be willing to overpay a subby to ensure a good or timely job because there is scope. A builder with a razor margin will be forced to wait. Reality bites. I was lucky to have been taught by an old hand and am lucky to have customers who can see my reasonings. ********** Go out and get a few quotes but more important is to ask for references from jobs within one year AND four to eight years ago. Go look at the jobs. Then pick the one that makes the most sense. Job faults within the first year tend to point to poor finishing or improper application according to the building code. Job faults within the later period point to structural inadequacies. A cheap quote could cost you a bad build as well as costly delays if you owe the bank. Good builders willing to do cost plus will be 20-30% job dependent. Most good builders who quote fixed price will be similar because they have to compete. If your job is very specific or out of norm then expect large variations because of uncertainties and differences in skillset. Good luck and regards to allquest Re: What is a reasonable Builder's Margin? 42Jul 22, 2018 8:21 am Welcome to the forum, I concur with your comments but you need to offer clients more People aren't interest in justifications, they just don't trust Builder and Subbies They do trust Engineers though..you need to provide Data and Proofs Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: What is a reasonable Builder's Margin? 43Jul 24, 2018 7:03 am The proposition that engineers are more trustworthy than other professions or trades is stupid. Having spent a lifetime working with engineers, architects and tradies I can tell you that I would trust some tradies ahead of trusting some engineers. I have come across some engineers that have sold their soul to the insurers and the reports they produce are absolute disgrace, unfit of a human being. In a commercial environment many professions are tempted by corruption and many succumb regardless of whether they have engineering ticket or not. Engineering or any other degree is no guarantee of honesty. In any case trust is earned not given and blind trust is just a blindfold on a stupid head. It used to be that priests were pillars of society and were blindly trusted with children to many parents regret. Engineering is a fine profession and you are not doing it any credit with stupid propositions. If indeed you are a fine engineer, shut up and let your work speak for you. Foremost Building Expert in Australia,assisting with building problems/disputes, building stage inspections,pre-contract review advice for peace of mind 200 blogs http://www.buildingexpert.net.au/blog Re: What is a reasonable Builder's Margin? 45Oct 05, 2018 6:51 pm Hi Guys. On a cost plus contract at what ever the agreed mark up %, what are the rates on an hourly basis for a reputable builder. As in, what would a builder be quoting per hour for his builds. Cheers AS Re: What is a reasonable Builder's Margin? 46Oct 05, 2018 7:08 pm petewilliam As an engineer who also builds, I used to wonder if people asked their brain or cancer surgeon about their margins. I understand the natural inclination to minimise costs when variations in quotes run into thousands but many customers do not consider the wide variation of quality out there. As an example, subcontractor plumber/electrician/bricklayer/carpenter/painter etc etc could have different sized crews of varying experiences. Let's say I am building for clients : one house or two duplexes versus a medium density development of four to six townhouses. For the former, I'd insist a subby to have no more than one first/second year apprentice with someone fully qualified always onsite whilst on bigger jobs with two per final year apprentice or full ticket. This ensures quality of work. Some crews will have four or five of these juniors per qualified tradesman. If you consider the wage costs between junior apprentices and full tickets, it allows some subbies to be 'very competitive'. In turn, builders willing to use such crews can also be very competitive. Add the number of different trades...thus the large variations. Sorry but if I don't want the business for a reason..I may also hike the price. Some builders also use more costly methods. For example, I cut the driveway early and pour 50 to 100mm layer of volcanic crush scoria after the house slab is poured plus slab surround. To me. it's a necessary protocol. Cleaner safer site during works and better driveway for the client. That could run into a few thousand dollars sometimes so I have to allow such. Most single house builders will not. Factory frames no longer consider stud channels necessary so I attach periodic stops to top and bottom plates despite it being 'unnecessary' because it is simply outdated secondary insurance due to modern timber ratings. Possibly only needed once every thousand times. One days extra work for only 20 dollars worth of timber. But priceless peace of mind. There are one or two others deemed good practice but also others which I'd say horses for courses. These are the same factors for ANY business in any industry. Costs versus pricing. But as the final occupant or developer who onsells, are you willing to take the product risk ? Fancy sleeping under a questionable ceiling ? I have seen all sorts of rubbish put up by cheap subcontractors and am unwilling to use such. Without adequate compensation for the builder, you risk hundreds of thousands to save a few thousands by using substandard. A builder with a normal margin will be willing to overpay a subby to ensure a good or timely job because there is scope. A builder with a razor margin will be forced to wait. Reality bites. I was lucky to have been taught by an old hand and am lucky to have customers who can see my reasonings. ********** Go out and get a few quotes but more important is to ask for references from jobs within one year AND four to eight years ago. Go look at the jobs. Then pick the one that makes the most sense. Job faults within the first year tend to point to poor finishing or improper application according to the building code. Job faults within the later period point to structural inadequacies. A cheap quote could cost you a bad build as well as costly delays if you owe the bank. Good builders willing to do cost plus will be 20-30% job dependent. Most good builders who quote fixed price will be similar because they have to compete. If your job is very specific or out of norm then expect large variations because of uncertainties and differences in skillset. Good luck and regards to allquest Great honest info. Thx Re: What is a reasonable Builder's Margin? 47Oct 06, 2018 1:03 am building-expert The proposition that engineers are more trustworthy than other professions or trades is stupid. Having spent a lifetime working with engineers, architects and tradies I can tell you that I would trust some tradies ahead of trusting some engineers. I have come across some engineers that have sold their soul to the insurers and the reports they produce are absolute disgrace, unfit of a human being. In a commercial environment many professions are tempted by corruption and many succumb regardless of whether they have engineering ticket or not. Engineering or any other degree is no guarantee of honesty. In any case trust is earned not given and blind trust is just a blindfold on a stupid head. It used to be that priests were pillars of society and were blindly trusted with children to many parents regret. Engineering is a fine profession and you are not doing it any credit with stupid propositions. If indeed you are a fine engineer, shut up and let your work speak for you. I beg to differ. Why the need to infer or confer honesty versus corruption ? ANY engineering report for a building is based on two parts questioning the outcome, the calculated load and the safety factor. The second is variable and usually the cause of angst as it is not enough for potential unknowns or more likely too much thus very costly. "Unfit for a human being" possibly means undersizing for lower repair costs to insurance companies. Why not ask for the calcs and a statement of safety factor on letterhead and bring that to the attention of the customer or the building commission or an independent engineer if your opinion differed ? EVERYONE involved is interested in doing the job to maximise profit but the line in the sand is ...does it meet the level of design safety ? To say that engineers are all faultless is akin to saying all participants in any profession are good. As in ANY profession, the work of each person indeed speaks for itself. Doubtless there will be some engineers who are less capable, inexperienced or just plain disgraceful for a myriad of reasons as much as any group of trades. There will always be some bad apples in ANY profession without sordid comparison to detestable clergymen who should be hung and quartered. I'd say real priests have a calling and scumbag clergy deem it a profession but it's only my humble opine. But moot comparison of trust between tradies and engineers... Assuming a customer who have viewed their previous work, would he/she rather trust an engineer who can actually calculate the loads from first principle or the chippie who relies on looking up the timber association manual designed by engineers ? Would you drive over the new bridge designed and built by an engineer or a welder/boiler maker ? Which consitutes blind trust versus justly earned ? By virtue of their educational differences, there are natural strengths and weaknesses to both newbie tradies and engineers but the distinction is obvious. I'm not castigating anyone but rather saying...look at prior work and work practices..regardless of profession or qualifications ! Yes there are lots of very good tradies with tremendous depth of experience but then they have no issues in showcasing their work like any other decent exponent of ANY profession. Why would taking potentially unnecessary practices be a stupid proposition ? It merely exhibits different preferences and attitudes. The customer seeking a cheapest price would generally veer elsewhere anyway. No different from the painter who puts two coats of paint versus three or uses rollers versus spray. No different from the tiler who lays far open corner first versus front open corner or the midline or midpoint, each is valid depending on outlook but one involves a lot more work. No different from the chippie who edge nogs bathroom studs to allow for 60cm towel rails or toilet roll holders. Each aspect can have different importance and of course cost implications to both the builder and the customer. In any endeavour, greater level of work or detail means a more expensive product and it is the customer who decides based on their own financial circumstance. Why would advising a potential customer/home owner to review previous work be a stupid proposition ? Most builders have no issues in showing their previous efforts. The only reason to deter is the lack of prior experience or possibly confidence in their own product as a propensity towards discounting. The law and the building code provision adequate room for all builders to amend minor mishaps during the first months of occupancy because there will be cases of customer anxiety mostly stemming from the timber frames 'settling' with little fixes like tightening hardware or adjusting doors. The widespread use of factory frames certainly contributes a touch more to this factor. It is ridiculous to expect every job to be completely 'error free' and undoubtedly some customers will be less understanding than others as they expect nirvana.A decent builder informs the customer that the job includes a post occupancy service to attend such matters. The job is simple..regardless of qualification, follow the building code and do the best possible job based on customer preferences but inform the customer. For those seeking a builder, ask a lot of questions, select the few you like and if slightly above your realistic budget, ask each how can you save money....on bits you can do yourself or selective culling without touching the integral structure. YMMV Good luck to all Re: What is a reasonable Builder's Margin? 48Oct 06, 2018 7:23 am DJVDH On a cost plus contract at what ever the agreed mark up %, what are the rates on an hourly basis for a reputable builder. As in, what would a builder be quoting per hour for his builds. Cheers AS If you had your project properly Designed, Costed and Analysed you would already have all that information (Data) Search google for BIM Engineering/Construction Data. Then average 2 or 3 separate modelling approximation methods eg. Productivity $1.50/brick Vs Labour Cost $350/day I would expect a brickie to lay 250-350 bricks/day although there may be some factoring required. As a Rule of Thumb interest rates are 5%-> Double it for Cost Plus mark up say 10% BTW, On an average a home Salesman on 5% Commission earns more than a bricklayer. goodluck Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: What is a reasonable Builder's Margin? 50Oct 06, 2018 9:47 am StructuralBIMGuy DJVDH On a cost plus contract at what ever the agreed mark up %, what are the rates on an hourly basis for a reputable builder. As in, what would a builder be quoting per hour for his builds. Cheers AS If you had your project properly Designed, Costed and Analysed you would already have all that information (Data) Search google for BIM Engineering/Construction Data. Then average 2 or 3 separate modelling approximation methods eg. Productivity $1.50/brick Vs Labour Cost $350/day I would expect a brickie to lay 250-350 bricks/day although there may be some factoring required. As a Rule of Thumb interest rates are 5%-> Double it for Cost Plus mark up say 10% BTW, On an average a home Salesman on 5% Commission earns more than a bricklayer. goodluck and 250-350 a day. Are you kidding? My old man was a brickie for 40 years. If he had a guy laying that many he would have kicked his arse by lunchtime. He was doing 800-1000 a day. Ive read some of your posts. Do you just like the sound of your own voice? Re: What is a reasonable Builder's Margin? 51Oct 06, 2018 10:42 am LOL Wheel him out of retirement mate, he 'd be earning more than a doctor/specialist Do the math any way you like but your figures don't add up Here what does a bricklayer earn in australia how may bricks does a bricklayer lay in an hour Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: What is a reasonable Builder's Margin? 54Oct 06, 2018 11:58 am DJVDH What figures? Are you high? Ha.. you are way too high salary wise Here Bricklayer Salary $1500/day= $390K/year Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: What is a reasonable Builder's Margin? 57Oct 06, 2018 4:29 pm alexp79 I would say 500 bricks a day is average. Generally, I would expect a single bricklayer to lay up to 2 cubic meters of bricks per day It depends on the brick sizes 2m3/day Verticore (216 bricks/m3) 2 x 216 brick day = 432 bricks Day hth Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: What is a reasonable Builder's Margin? 58Oct 06, 2018 7:58 pm A pack or a pallet a day is very reasonable work for a one man band brickie but possibly more if the walls are long straights. The lesser number of cuts make it far quicker. Obviously it changes with height as well. He's be almighty buggered by end of week though. Had a wonderful Yorkshireman brickie in Melbourne...hard honest stubborn man. He'd do 700-800 daily but deserved every penny as his back and hands were riddled with pain. Strangely enough the only other brickie I know who was as meticulous was Ethopian although slower..go figure ! I'd rather have fewer laid without bits to keep the mud workable longer. I peek at the back of the ute for the tell tale bottle and address it accordingly. Most doubles plus labourer will do max 1.5 pack each brickie to pay for the labourer. The important factor is labor cost per brick. Pay too little and you should expect delays when it's busy. Big jobs 1.20-1.25, resi jobs 1.40-1.60 for standards then add the extras like sills and cuts etc. The biggest ripoff must be the 'sandstone' specialists ..LOL Re: What is a reasonable Builder's Margin? 59Oct 09, 2018 12:54 pm Hello all, I work for a builder in Perth, I have worked previously for 2 of the biggest 3 builders in Perth, the house margin is confidential and can be whatever the builder sees fit to charge, but I can tell you in Perth that the figures quoted in this post are way higher than the actual margin, you would shake your head in disbelief when you weighed it up against the risk. In regards to variation margin the standard HIA contract for WA for under $500,000 which would be the most common contract used the builder has to stipulate the margin for variations (Clause 11 of the contract), I very much doubt the majority of the builders would stick to this (They would add a greater % than reflected in the contact) but with my current employer we stick to the contract margins stipulated, we did have the building commission audit us sometime ago and they asked about variation margin and we had to show evidence that we stuck by the contract, they looked rather surprised that we had so that tells you something. Re: What is a reasonable Builder's Margin? 60Jan 25, 2019 10:11 am As the Building expert stated, builder margin is confidential to the builder, although a margin will be disclosed in variations, for PC and PS items. Do not assume that the margin on those items is the same as the margin on the rest of job. As a client,if you decide on a variation then you should expect the variation quote to include a 20 to 25% margin, plus an upfront fee for the variation usually $250. Lets say you decided to change the a wall and its details, then within the overall cost you will be charged for quoting time costs as well. I hear someone say, $250 fee for just making or asking for a variation? Why, that's not fair, is it? The answer is yes it is, as the builder has to interrupt his whole schedule which includes all work outside your job, contract legal docs like variation, extension of time, contract need to be signed/updated, altered and filed. Home warranty insurance, builders insurance requires updating. This all adds up to more than you will ever know. The re scheduling of trades can be costly, eg lets say that your variation delayed works by 2 days, which put my bricklayer out of schedule where he would then lose 2 days waiting on variation works to be completed. If he has another job he can start, he has the right to do it so he is not losing money. If that job takes 2 weeks, then your job will be delayed 2 weeks. Your variation has now held up the bricklayer and all other trades and further delays can snowball. That 2 week stoppage on your job will cost the builder thousands of lost dollars, because you have just taken 2 weeks out of his financial year to earn income. For some of you here that may be hard to understand, read it a few time, let it sink in and think about it, and it should then make sense. if it doesn't then your IQ is too low for me to explain further. But that's not all folks. LIABILITY. The builder is totally responsible for everyone and every conceivable thing that can go wrong on a builders site. WHS laws hold the builder as responsible for all safety and accidents and the builder is guilty until he proves himself innocent. Court and money costs over years, along with stress normally destroy the builder before the court case ends, and even when the builder wins there is no compensation for him. I myself know two builders where this happened. Lawyers will tell any builder that the law is totally stacked against them. An then you have all the trades that you have to guide through the project. What if one of your subcontractors go broke halfway through the project?? Being a builder is one of the most difficult occupations. You tell me of any occupation whereby; you have to guarantee your work for 7 years which includes all your trades work, lose everything because of WHS laws, your client turns around and says he is not paying or he runs out of money, your client is foreclosed by his bank and he doesn't tell you and you have $100,000s owing to suppliers. The law can now also go back further than 6 year and hold you responsible. I could go on and on. One thing to note is subbies are said to be accountable now but that's a lot of bs. If my subby did some bad work and its discovered later the QBCC makes me the builder rectify it, then its up to me to chase the repairs or costs up with the subby, court costs alone stop me and no subby will turn around and pay. You cant even sue a doctor or specialist these days as the AMA lobbied and had the laws changed in their favour. What about handing over tens or hundreds of thousands for a brand new car, and your dealer rejects your warranty claim.....there is no law that fines the dealer or takes his licence away, like our QBCC does. Lets say you see your financial adviser and invest and lose because that dipshit told you to invest in a forest that burnt down......no law their to sue his arse. So how much do you think a builder should be charging with all this risk? How much do you think he should be making per year as gross salary alone? Lets say a plumber fixing leaking taps and hot water systems is grossing $120,000 per year salary, what would you think a builder should earn? How much net profit do you think a builders company should make? Seems good to me. I've been told $4-5k/sqm is reasonable in Perth. 2 11171 Hi Mofflepop, I would recommend finding a building designer to prepare plans, they should design to your specified budget. The benefit is you can tender the project out… 9 20417 |