How a Quantity Surveyor can help an Owner Builder
If you’ve ever scratched your head wondering what a Quantity Surveyor actually does, you’ll be an expert by the time you’ve finished reading this Q&A.
Meet Gary Uys (pronounced Ace), Founding Director and Principal Cost Planner of Cost Planning Professionals. Gary has an impressive background with almost 30 years as a cost planner, estimator and quantity surveyor.
We’d say he’s seen it all and he’s certainly openly shared what he knows.
Can you clarify the difference between a Cost Estimator and a Quantity Surveyor?
A Cost Estimator (CE) is known in the construction industry as the person who prices the project. They work for building companies or subcontract customers and they put together estimates based purely on the drawings provided.
The broad definition of a Quantity Surveyor (QS) is a construction cost manager who views a project from all aspects. A QS is a member of the Australian Institute of Quantity Surveyors (AIQS) and is certified through the AIQS. That means we can prepare bank cost reports and council cost reports (depending on council requirements) – Estimators are not necessarily qualified to do that.
Quantity Surveyors are experts in construction costs and contracts.
We notice your company offers both Quantity Surveyor and Estimating services?
Yes and in addition to Quantity Surveying and Estimating, Cost Planning Professionals also offers a Cost Planning service – a more detailed estimate of costs.
A QS can do cost planning and it’s something I specialise in – helping owner builders (OBs) develop their budget and keep the budget on track.
An example of our Cost Planning service is when an OB wants to build an extension on an existing house or even a new house, they have many have minimal design.
I put together a cost plan so that the owner can then understand if those costs fit within their expectations. For example, if I say the extension is going to cost $150k and they say that’s more than we can afford, they may ask, what can we do for $100k. I then help them establish the budget for $100k.
Cost planning can help an OB understand if they can even do it as an owner builder before going further down the design, bank loan and approvals path.
Once they’ve made their decision, it’s at this point we engage an Architect/Building Designer for plans, then I price it again based on those plans and work it until the plans meet the budget of $100k. We also factor in opportunities to save money by working out what the OB can realistically do themselves e.g. paint and what they can’t do themselves.
Estimating on the other hand is purely taking a set of drawings and pricing it (a one step process).
How can a Quantity Surveyor help an Owner Builder?
Providing a bank report is the most common thing I do for OBs because banks typically need an estimate of costs done by a QS. A bank report is an independent opinion of costs. It’s not a quote.
Getting a QS to do the estimate also helps an OB to allow for a buffer if they need extra funds. For example, pre-approval maybe for $500k but the build is only going to cost $400k. The OB can be comfortable that the extra $100k is available without having to approach the bank again.
Depending on the bank, they may also require payment schedules at the different build stages. I break the estimate down into those stages.
Does an OB legally have to have an independent bank report?
Only if a bank asks for it. Having said that, the banks are a lot more stringent since the Royal Commission and by getting an independent bank report supports the loan approval process.
What are other ways a QS can help?
In NSW, when a build is of a certain value e.g. $500k, Council requires a Quantity Surveyor report as part of the Development Application submission. It allows Council to charge owners a levy to provide services e.g. roads and parks. They charge a certain % on a DA value.
TIP: Because local Councils have different rules, be sure to check with your local Council as to whether this is required. Also refer to the DA submission form.
A QS can be engaged throughout the entire project from start to finish.
Getting quotes can be a challenge, what’s your opinion?
If someone gets three quotes and they’re uncertain whether the quoting level is correct (especially if they vary), a QS can give an independent opinion about the right market price.
The market can be quite volatile so some trades might price different from one week to the next. It depends on their workload and pipeline. It’s about working out what’s a fair price in the market.
Quotes can also have a lot of exclusions and that may mean forking out more money during the build. Lets use brickwork as an example – does the quote include the lintels, door frames or insulation?
TIP: Ask the right questions – what’s included and excluded in the quote? Compare apples with apples.
Is there anything else to consider when it comes to quotes?
Yes, another big issue is scope gap. That’s when one trade finishes and the other trade starts, what happens in between?
For example, if someone is putting the windows in, who’s going to be doing the flashings? Is it the window person, framing person or bricklayer?
One trade may assume another trade is going to do it or everyone does it and the OB ends up being charged 3 times for the work.
Make sure you manage scope gap or get help to manage it. It doesn’t have to be a Quantity Surveyor – an Architect can also help with scope gap.
We’re going to pause here and list a few big tips Gary gave at this point in the interview:
- Understand when one trade stops and the other starts and what each trade is doing.
- Planning is crucial. Spend the time upfront planning, planning and planning. I’ve seen so many projects fail and the common reason is because they haven’t planned upfront.
- Ask questions and do the spreadsheets. It will save alot heartache during the build.
- It’s about relationships – with Council, the Certifier, everyone in the process. Keep them in the loop. It makes the process easier!
Now for some more juicy insight.
Do you engage at the design stage with the Architect/Building Designer?
Yes definitely, that’s one of the most common stages. It’s part of the cost planning stage.
We can work with the Architect/Building Designer and price as they design. This makes sure the design fits with the OB’s budget.
For example, I can look at a design and see that a lot of money is being spent on the façade – does the OB want to spend their money on the façade or dumb down the façade and spend the money on the inside of the house?
Another example, if an OB runs out of money towards the end of the build and the bank won’t lend extra, we can sit down and decide how the project can be finished to the point of still getting an occupancy certificate.
In your opinion, how can an Architect/Building Designer keep costs in line with a budget?
It’s not always the design that blows out costs. When a builder looks at plans, the builder knows how it will actually be built.
For example, a façade on a house might have five different finishes like brick, cladding, timber etc. They are all individual trades that need to come to site. Instead of getting one contractor on site and getting economies of scale, there are 5 contractors so it will end up costing more.
It also comes down to how much of a product you have, the type of product, how many trades are working on site at the same time.
There are a lot of factors that are taken into consideration when the builder gets hold of the plans.
It’s another benefit of engaging a QS – a QS can look at the design from a constructability point of view.
NOTE: Gary has a super short video about how the shape of a building affects cost. It relates to an industrial site but can be applied to residential. Check out the link at the very end.
Can you explain a take-off?
A take-off is the measurement part – putting the quantities on paper. It’s different to pricing. An Estimator can do quantities as well as pricing.
Is there any benefit for an OB to get a take-off?
Yes. I can provide the bank report in a trade format. The trade format will allow the cost to be broken out into individual trades. An OB can then use that to go to market and price up the project.
The quantities are an estimate only (based on the plans) as the trade needs to work out their exact quantities and how much waste they need.
Why do trades tend to price really high?
It’s called a cover price. If a trade doesn’t want the job, they’ll price high and if they get the job, it’s a bonus to them. Price is driven by what’s happening in the market at the time.
CHEEKY TIP: If the quote is high, ask the trade if they’ve given you a cover price!
ANOTHER TIP: If you can delay the start of the build, ask the carpenter/builder to quote on starting the job in 3 months time (they may not have another job to go to).
How do you price your services?
I can price multiple ways. If an OB knows specifically what they want I can offer a fixed fee. For example, if they need a bank report by a certain time, I have a fixed fee for that service.
If it’s ongoing, I can provide an hourly rate or I can offer a package (weekly rate) depending on what they want.
How do you work with clients nationally?
I do most of my work over the phone and email. I get a lot of my information from plans, photos and Google earth.
I have the benefit of being familiar with the markets in each state from previous work I’ve done however I also have contacts in each state that I call on if the situation arises.
What are your parting words of wisdom?
- I’ve already said it, plan, plan, plan, plan, plan, plan and then plan some more (yes, Gary said the word plan 7 times!).
- Don’t be afraid to spend money upfront. If you think your ground is bad, get a geo-technical surveyor. Spend money on engineering reports, on Architects and especially a Quantity Surveyor! It’s worth it.
- Plan and arm yourself with information – knowledge is key. Don’t go in blind. Have an informed opinion and knowledge.
- When you go to a sub-contractor, ask questions!
- Play the game! Be aware of what’s happening in the market.
And finally…Gary said this – you don’t build without a construction plan, why would you build without a cost plan?
What do you think? Do you now know more about the role of a Quantity Surveyor? Has it given you food for thought? We hope so!
To top it off, Gary is generously offering our community a complimentary initial consultation to help you better understand your needs. Simply call Cost Planning Professionals on (02) 9629 3495. Oh, and if you mention the Owner Builder Club you'll get a discount on their services!
Holy moly, thanks Gary! You’re ace 🙂
You can also learn a whole lot more by visiting Cost Planning Professionals.
And here’s the link to the Design Efficiency Masterclass – click here.