Why honest and clear budgets are the key to a successful project

Here at Ambition Custom Homes, we strongly believe that having a transparent budget discussion with our clients is key to a successful project. It increases clarity and accountability as well as reducing anxiety and project risk.

In this article, we unpack the five main reasons why we need to understand your budget.

1. To Avoid Disappointment

It may surprise you to learn that many home designs never get built.

Why?

They were designed over the client’s budget.

Unfortunately, this means you, the client, could be wasting thousands of dollars on design fees and precious time.

Architects don’t automatically design to budgets. So, when you take your plans to a builder for a quote, it’s only then you may discover the construction costs are beyond what you want to spend or can reasonably afford.

Although architects are well-meaning, they don’t always have the information required to accurately quote a building project and their approximate estimates can vary widely. They are typically loaded with allowances that just do not work well in reality.

The best way to avoid this is by choosing a holistic “design and build” approach instead. This is where you come to the builder first, who then collaborates with you and the architect to create the best house for your budget and vision.

This simple but fundamental difference saves money and time by transforming the relationship between architects and builders into an alliance which fosters collaboration and teamwork. The architect manages the creative, but the builder and architect work together on construction science and practical construction costs.

The risk of crippling overspending decreases when the design process is closely linked to cost modelling throughout the planning phase.

At Ambition Custom Homes, we use an integrated design and build process. Our team of professionals will collaborate with our trusted architectural partners during the planning phase, giving you cost visibility from the start.

As your builder, we are an overall resource, capable of suggesting alternatives to deliver your goals of lifestyle, budget and sometimes, even lowering the required budget.

2. To Create a Tailored Quote

It takes a lot of time and research to accurately calculate a fixed price for a unique building project. On average, our team invests 40+ hours preparing a formal quote. It’s a comprehensive process which involves many steps which are handled as part of our preliminary building agreement.

The first of these is our design meeting with the clients in our office so that we can understand all there is to know about their individual requirements for the project. For example, what type of flooring will be used? What type of windows and doors? How about selections for items such as cabinets, appliances, lighting and plumbing fixtures? All these items (and more) require individual pricing to determine an accurate project cost which will be included in the fixed price construction proposal.

A site visit is also required. This is important to gauge the access to the site, availability of utilities such as power and water, and to view the initial grade of the site, all of which can impact the overall cost of the project.

Prices are then procured through a bidding process from subcontractors and suppliers, who quote for things like framing, flooring, electrical work, plumbing, structural components, and so much more. These are major components of any building project, and an accurate price is needed.

Finally, we need to calculate the quantities for the materials required and apply the cost of all the items and labor that go into a build: framing lumber and trim, masonry, roofing and siding, insulation, appliances, painting, and tiling are just a few.

As you can see, it takes a considerable level of research, product and assembly knowledge, and vast experience to factor in these costs and apply them to each individual project. It’s not a matter of cutting and pasting a previous quote.

Therefore, a builder must ascertain that a client has a realistic budget before proceeding with the procurement of detailed cost and development of the included scope of work. Otherwise, the builder risks investing 40 plus hours preparing a detailed quote, to possibly learn the project isn’t within the client’s price range. And the client has now spent many hours and given up lots of their own free time making selections and designing exactly what they want, only to find out they cannot afford it. At that point it’s either backing out details and scope or foregoing the project altogether. Neither option is ideal for anyone involved.

3. To Save Time and Money

If your builder doesn’t have a price range to work towards or worse, you give them a misleading budget figure, the entire process may be a waste of time and money. We do not need to know how much money you have or can spend. But we need a clear vision of how much money you are looking to invest in your project.

Your builder will spend 40 plus hours developing a quote that suits your unique project, so if you haven’t been truthful in supplying the information that underpins this, there is little point in beginning
the process.

Professional builders require payment for their quotes due to the amount of time and research which goes into preparing them. ACH works with our clients through what is called a preliminary building agreement to procure all the necessary information to provide the clients with a fixed price construction proposal based on actual cost and not an “estimate”.

By giving false information, you’re essentially throwing away money that could be invested in your build. You’ll also delay the construction process, as well as your project’s eventual start and finish date.

4. To Suggest Alternative Options

If there’s something specific you want to include in your home, but your budget doesn’t allow for it, a professional builder will be able to utilize experience along with their many connections to investigate alternative options that may be suitable for your project. This is also known as value engineering.

The more your builder understands about you and your budget, the more likely it is they can find you cost savings and realistic results that work.

5. To Add Value

If your builder knows the budget you’re working toward, they can then look for ways to add value to your project.

This could be something from your home ‘wish list’ or even something you hadn’t considered as an option, such as alternative materials which cost less and perform better over time.

A professional builder will always be on the hunt to identify cost components that can be manipulated to achieve optimum value for your budget.