Should I Tell a Builder My Budget?

Victoria Street renovation, Aberdeen

If you’ve ever worked with a custom home builder, you’ve probably encountered the awkward, ‘what is your budget?’ discussion.

We recognise it can be a sensitive topic for our clients. Some may find it confronting, or even rude. But the truth is, it’s crucial for your builder to understand your budget to create a home that fits your price range and needs.

Some people worry if they reveal their budget, a builder will increase the project price to make more money.

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If you’re working with a reputable and professional builder with integrity, their goal is to provide excellence in service, so this will never be an issue. If you don’t trust your builder with your budget from the outset – then you shouldn’t consider building with them. Walk away and find a builder who will work on your behalf. Your custom home builder should be a resource with a relationship and rapport.

The Coldwells team strongly believe that having transparent budget discussions with our clients is key to a successful project. It increases clarity and accountability and reduces anxiety and project risk.

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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, waste thousands of pounds 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.

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 overspends decreases when the design process is closely linked to cost modelling throughout the planning phase.

At Coldwells, we use an integrated design and build process. Our award-winning construction managers collaborate with our architect 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 building project. On average, our team invests 40 hours preparing a formal quote. It’s a comprehensive process which involves several steps.

The first of these is meeting the client to understand all there is to know about their individual requirements for the project. For example, what type of flooring will be used? Will there be timber or aluminium windows? How about selections for doors, light switches and taps? All these items (and more) require individual pricing to determine an accurate project cost.

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 and take measurements of the gradient of the site, all of which can impact on cost.

Prices are then sought from subcontractors and suppliers, who quote for electrical work, plumbing, steel frame manufacture, etc. These are major components of any building project and an accurate price is needed.

Finally, there is calculating the quantities of materials and applying all the items that go into a build: blockwork, joinery, roof installation, insulation, appliances, painting, and tiling – just to name a few.

As you can appreciate, it takes considerable research 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 to detailed costings. 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.

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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.

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.

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 utilise experience and existing connections to investigate alternative options that may be suitable for your project.

The more your builder understands about you and your budget, the more likely it is they can find you cost savings and a result that works.

 

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.

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A Common Goal

Ultimately, the builder and client’s goal is the same: to get the project built on budget, on time and with 100% quality. When the builder/client relationship is established on mutual trust and clear communication, you’re more likely to achieve this outcome.

Keep in mind that a builder builds homes every day – this is what they know. They have a clear understanding of how much a new home actually costs, which is why it’s important to engage their services early in the design phase.

We recommend you take the time to research your builder before contacting them. Are they members of a trade association? Do they offer a design and build service? Are they willing for you to view past and present projects? Can they put you in touch with previous clients?

Ensure you do your due diligence before inviting a builder to quote for your project and then be prepared to be open and honest about your budget to achieve the best possible outcome.

For advice on how to calculate a realistic project budget, get in touch with our team hello@coldwellsbuilding.com or 01975 223011

Editors note: This article was last updated May 11, 2022

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