Finding a Builder– the Ultimate Cost of Cheap Contractors

In the contracting world, it’s all too common practice for property owners to choose a builder who offers the biggest promise for the lowest price. Although this might seem like a smart decision, made in favour of affordable construction and renovations, it often leads to complications and unexpected costs in the long run. Finding a builder based purely on price can be misleading, and choosing cheap contractors could put your building project and your budget at risk.

Make sure you understand the tender process

Property owners often believe they’re making an informed decision by requesting multiple quotes from several contractors. However, many don’t realise that they’re probably not comparing similar bids because each contractor is likely to present different scopes of work, materials, and workmanship quality. This lack of standardisation often results in choosing a builder based on price alone, without considering what you’re actually getting.

A good place to start when comparing the building quotes is to make sure you understand the cost implications of different building project phases. A construction project typically consists of two main phases – what we call the wet works phase and the finishes phase. A contractor’s approach to each of these phases will determine both the cost and quality of the work.

  • Wet Works Phase

    This includes all aspects of construction that involve water, such as concrete foundations, brickwork, and plastering. These costs are generally consistent across contractors because the materials and methods used are fairly standard.

  • Finishes Phase

    The finishes phase is where the fun is at… and also where pricing sometimes gets finicky. This phase involves selecting tiles, kitchen fixtures, paint colours, wall and flooring finishes, and other personalised elements of your home. The pricing in this phase can vary significantly based on individual choices and preferences – and, of course, finding a builder who works with reputable materials suppliers and skilled subcontractors.

Any serious home construction company knows that a building’s basic structure cost tends to be similar across bids. To appear more competitive, some may underbid on the finishes phases – but they often do this by opting for inferior materials and cheap, unskilled labour. When this happens, you can almost bet on the fact that the cheapest contractor will eventually become the most expensive when all is said and done.

The Dangers of Low Bids

When a contractor submits an unusually low bid, it may reflect a strategy rather than a true cost estimate. Not sure what that means? Here’s what we mean: 

  • Underspecifying Finishes

    A contractor might quote a very low price by not specifying finishes – in other words, they offer low ballpark figures. Ultimately, they may end up having to use cheaper materials that don’t reflect their client's desires. For example, a kitchen budgeted at R50,000 may not meet the client's expectations if they’d envisioned something more luxurious to unleash their master-cheffing prowess. While we all dream of finding a cheap contractor who can deliver the same level of service and quality, it’s important to remain realistic about what any builder can achieve with a limited budget.

  • Hidden Costs

    Clients who choose the cheapest contractor will often find that they need to choose higher-end finishes later in the building project – sometimes, even after a subpar finish has been paid for and applied. As a result, they’re confronted by additional charges that were not accounted for in the initial quote. In this situation, the client ends up spending significantly more than if they had chosen a contractor with a higher initial bid, which included quality finishes and skilled application from the start.

Spending money to save money with standardised quotes

The only time that it makes sense to select the lowest price is when all contractors are quoting against what we refer to as a standardised bill of quantities (BoQ). In this situation, a quantity surveyor would typically provide very detailed specifications on what is needed for the project, allowing all contractors to quote on the same basis. This ensures that everyone is comparing apples with apples, and the quantity surveyor is able to check that all bids are on point.

Unfortunately, this process is not commonly practised in most residential building projects. To save costs, property owners choose to skip involving a quantity surveyor and simply ask contractors for quotes directly, leading to inconsistent comparisons. What’s more, the client often doesn’t have the building industry knowledge to fully understand what each quote entails, which further adds to the confusion of choosing the right contractor.

Finding a builder for your budget and your dream build

Considering the cost of building, it’s understandable that choosing a contractor based solely on price can be tempting. However, hiring a cheap contractor is likely to result in unforeseen expenses and dissatisfaction in the long run.

Finding a builder that falls within your budget and catches your vision is stressful. Here’s what we urge you to remember during your search:

  • If it looks too good to be true, it probably is. Consider the scope of work and the quality of materials included in each bid. Be realistic about what materials and skilled labour actually cost.
  • Whenever possible, standardising quotes through a quantity surveyor can help ensure that you make informed decisions based on comprehensive comparisons.
  • Approach generic, ballpark quotes with caution and don’t be shy to ask for details to reflect on the bid.
  • Do your homework on all bidding contractors – check their project portfolio and ensure that each one is a registered contractor with the NHBRC.

As you navigate your contracting needs, don’t let the cheapest option end up costing you more in the end. At Jukka, we have years of experience in luxury home construction and renovations. If you’d like to chat about your upcoming project, we welcome your call!

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