“The client loves the design, but I’m worried about their budget.”

Not long after we started YourQS I remember working with a Tauranga builder. They said, “the client loves the design, but I’m worried about their budget”.  They had $400,000.  We estimated the build; it was $1.3m.  No wonder they loved the design if they thought that they were going to get it for $400k.

That sets the mismatch record for us between the design and what the client can afford. The only good thing was it was still at concept stage.

We had another project a few years back in Nelson, great design, consented.  Our builder and one other came back with similar build costs; double the budget.  The client sold the section.

We had a West Coast project come in a few weeks ago.  The client was $100,000 in with design and consenting fees, but the build cost came in 50% above their $1m budget.  We are working with the builder on a redesign that, a reduced scope, is looking like it will work. But the consent and design fees are gone.

I can appreciate the challenge for architects and designers. The client might know a budget, and they’ll have a list of what they want. But it is always hard to know if the two are compatible.

The designer must start somewhere, a feel for how far the budget might reach.  I can understand using something like $/m2 of floor area makes sense.  The problem is the rate used must represent a similar building.  Even then, so many details affect cost but not the m2 that the best of rates can still be widely inaccurate.

We got into strife with a Wellington homeowner a few years back.  They refused to pay us as the design was double their budget.  The designer had used a $/m2 build rate from a recognised online information provider. But the house was cedar clad, multi-storey with parapet walls, and on a site with a 45-degree slope.

About half our work is for builders pricing jobs to their clients. While this gives us a great understanding of build costs, it is too late in the process if it is the first time the client is seeing a price.

The best time to involve a QS is at concept stage, and as early as practical. This might just be a floor plan and some elevations. Sections if there are complex heights involved.  A few thousand spent at this point, can save thousands later.

As an independent QS is we are not incentivised to price the project to win it, or to keep it alive.  Our role is to form the best possible view of what the likely build cost is.  Not too high, otherwise the builder might not win it, or the project be killed. Not too low otherwise the builder loses money, or the client is in for a shock.

We don’t use $/m2 rates.  We use the same process for concept and consent plans; creating a 3D model that drives the costing.  The difference is we make assumptions for the concept.  If our assumptions are close, our concept price will be sound.  We typically see a range of minus 5% to plus 15% on concepts.

Using an independent QS helps the client too.  If they have a preferred builder, they can confirm their pricing without having to go to multiple builders.  If they don’t have a builder, they have an independent costing that they can use in discussions.

Nick Clements is the founder and managing director of YourQS Ltd, a technology enabled quantity surveying service. Nick has over 30 years of experience in the New Zealand construction sector at the leading edge of construction technology. Nick is a registered QS and Chair of NZIQS Auckland Branch.