Hi guys
Am in the midst of doing a first development (of 4 t'houses). DA is through and we're almost through to BA.
We are currently seeking to tender so that we can revisit our feasibility analysis and figure out the sale price for each of the townhouse and determine whether we are able to sell at today's market or perhaps wait a bit longer until it picks up.Anyhow, we are told by one of the builders that the problem we have is that apparently we:
- Need Construction Quotes
- Can’t get those without FULL Construction Plans
- Need Approved FULL Construction Plans
- Can’t get those without Plan Certification
- Need Plan Certification
- Difficult to get without a Building Contract
- Need a Building Contract
- Requires evidence of Capacity To Pay/ Project Funding
- Need Project Funding
- Lenders require Fixed-Price Quotation
- Need Fixed Price Quotation
- Returns to top of this circular list
I thought the above was absolutely ridiculous? Has anyone had experience with this? Can anyone please help me and shed some light? We are extremely confused.
Thanks in anticipation.
Hi IDH,
As a norm during my residential development projects (typically 2 or 3 on a block) (and in VIC) , I get quotes at two stages:
Firstly Town planning drawing stage. Before finalising TP drawings and submission to Council, I get preliminary quotes. These can vary lot as they are nothing more than ball park figures (most builders will not go into too much detail at this point – too many variables to consider.) If you have a good relationship or history with the builder, this is a good time to discuss the builders thoughts on obvious costs savings that could be considered in the designs.
Finally, build tender stage. Firming up the quote. In order for a fixed price to be ascertained, I would expect to provide the following documents:
– full construction drawings
– engineering drawings and soil test results.
– Certified Town Planning Drawings. plus Town Planning Pernit letter specifiying conditions of the Permit.
– Energy Rating Report (if applicable)
– stormwater and sewerage designs (if available)
– landscaping (if relevant)
– project specification. If this is not ready, provide, or ask to be provided with specified and itemised dollar allowances for items such as cabinetry/ plumbing fixtures etc etc etc.The more you provide and the more specific you can be , the more accurate your pricing should be. Which is what you want from a tender. Otherwise, you may find that you will struggle to compare pricing.
Regarding your "circular list", no need to go past the first point, the rest is irrelevant / makes no sense.
But when you say "full construction drawiings". For me, this includes the list I've just drawn up above.
Hope this helps. Good luck. In which state are you building?
mccoz
Thank you so much for that information. I'm building in Qld.
It's just difficult when I really need a construction quote so that I can get a valuation from the bank's valuer to ascertain if we could get finance.
Alas, I can't do so, unless i follow through the steps, including, providing proof of capacity to pay….? hhhmm…
Hi IDH,
Your post caught my eye. Interesting position to be in.
As you are going to revisit your feasibiity to determine sales prices and whether to go ahead with your project now or at a later stage these would be my suggestions:
1. Speak to real estate agents in the area and ask their advice regarding the current market based on your properties, ie 3brm, 2 bath, double gge, xx size private open space and finish ie. basic, moderate, deluxe etc. etc. Being as specific as possible will ensure that similar sales are used as comparisons.
2. Do your own research on realestate.com.au and see what similar properties are selling for in the surrounding area.
3. You could ask builders the price per square metre for building costs and do some calculations yourself, taking into account other types of costs such as contributions etc. A town planner should be able to provide you with details to use as ball park figures
4. Ensure you factor into your sales price a contingency allowance, say around 10% and your minimum required profit to proceed. You also need to ensure you account for the GST.
5. One cost that people discout when do a feasibility is the holding costs such as interest. Coverage across time of construction as well as worst case scenario in the event that the properties take a little longer to sell.
You should be able to get rough estimates of costs to enable you to determine whether it is viable to go ahead in the current market.
Hope this helps and good luck.
Cheers
Martienne
Hi IDH
I have a builder who could quote you if you are in the Bris/GC/Ipswich area. You can email me if you want me to pass on his details at [email protected] All the best!
Hi IDH
I also have a builder who could quote you, again in the Brisbane area. If not, let me know which area and I can hopefully refer you to one in our network.- Need Construction Quotes
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