More Hot Reno Pricing Tips
With banks and lending being the way they are these days…. Never cheaper to borrow but never harder to get lending! You guys don’t really have a choice in the matter… you simply can’t just offer charge up for renovations as much these days. If you have a client who needs lending of any kind, without a fixed price contract there is a good chance they will have no hope, even if they have good LVR and affordability.
There’s no point in getting sook about it, we really just have to accept that’s the way it is at the moment.
So what that means for you guys is….. you need to start offering fixed price quotes for renos.
We KNOW you don’t like doing it, and We understand why! But think about it like this, if you can offer a fixed price quote, and your local competitor will only offer charge up, then who’s more likely to come out on top? That’s right! YOU.
So, on that note, here are my hot tips for pricing renovations on a Fixed price contract.
Measure and price the way I have taught you (line by line using labour constants)…. Just follow your nose through the plans and each time you come across a grey area, WRITE A TAG. Clarify what you have allowed for and what you haven’t, use provisional sums where you need to.
Try and get the client to firm up their choices for fixtures and fittings during the pricing process, and then put those choices into your pricing and clarify as a tag if its not written on the plans.
Make sure your quote letter includes reference to the plans and any site visits you have had.
Include a reasonable contingency fund based on your experience that is likely to be required, if it’s added at this point as part of the FPC then the bank will be more likely to include it as part of the lending.
Be really clear about how you will deal with variations… try to discourage them if you can so you don’t get too much scope creep which could blow the budget – I know how much you don’t want to have to walk away from a job because the client has run out of money.
Offer some cost-saving solutions, suggest different material types, or job staging, or maybe wrapping the building so there are no weather delays.
Offer a methodology statement, this is good practice anyway but particularly useful for renovations as it gives real clarity about how the job will progress and what time frames are likely to be… banks love that!
It may also be useful to provide a schedule of payment, this will mean both the client and their bank know when more money will be required. Clarity is key!
Whatever you do, as always you must protect your pot of gold with your life….. and pretend that your client hires a SUPER MEAN QS like me to work on their behalf and try to stop you from getting any variations at all…. And tag accordingly!!!!!!