Home Refurbishment Mistake #3 - Selecting The Cheapest Quote

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Home Refurbishment Mistake #3 – Selecting The Cheapest Quote

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Selecting The Cheapest Quote

Everyone is price sensitive. We scour Amazon or Ebay to find the cheapest version of a product & feel great when we know we’ve found the cheapest price.

Although modern technology trains us to do this as a lifestyle habit, unfortunately, the same logic doesn’t always apply within the service/ building industry

 

On Amazon you are often searching for the exact same product & then searching for the cheapest price.

In the building industry, the quality of the product & service you receive may not be anything like what you have envisioned.

 

Beware of basing decisions on price alone. It would be a bit like searching for a mobile phone by price alone. Of course, you could get a bargain & pick one up for £50, but there is no point in trying to compare it with the latest IPhone.

 

A massive part of the build cost will be on materials & labour. On average we find this normally works out as a 40/40/20 split

  • 40% on materials
  • 40% on labour
  • 20% overheads & profit

 

When basing a decision to select the cheapest quote, you need to bear in mind that the builder will still be looking to make a similar percentage on the profit. This means in some cases that the price they have for labour & materials is now less than the more expensive quote

Example-

Quote 1

£50k for extension

40% materials = £20k

40% labour= £20k

20% OHP= £10k

 

Quote 2 (cheapest quote)

£40k for extension

40% materials = £16k

40% labour = £16k

20% OHP = £8k

 

Although you may be saving £10k on the cheapest quote which is a huge saving, you need to bear in mind that behind the scenes the building company cannot be spending the same amount on materials. Potentially the £4k saving they need to find will be found by using cheaper/ inferior building products.

The same can be said of the labour. A skilled tradesman does not come cheap, so a £4k saving the company needs to find may come from less skilled labour.

 

This is not always the case by any means. Sometimes you can find a great builder who is prepared to earn less OHP & has a highly skilled labour force that is cheap. But this is very rare.

 

Speak to one of our team about how we can design and build your space.