Negotiating with builders- tips?

riva

Just an update on this strangely difficult question. We're still not there yet on negotiations as waiting for the final quote but I will update on that as well in case its useful for anyone.
The closest I got to a response to this q is from the wife of a medium sized building company ie. gets work, project manage and subcontracts with own workmen. It was a social situation and there was no way I would ever need her husband's company as its out of my general area. So I suppose she had nothing to lose. She said 5% of total estimate was common and some people try up to 10%. I still had the feeling that she wasn't completely forthright about it (who can blame her) and she wouldn't really give me more details. Any takes on this?

clutton_2

if you are looking to develope a long term relationship with an excellent building firm.. then dont screw them into the ground on day one... they may not want to work with you in the longer term. As someone else said... everyone has to live....

The cost of materials seems to be going up weekly and they will have to factor that into their prices... so i would not expect a large discount myself, especially if you have got good references from other customers....


finding and keeping good builders is one of the most difficult parts of property development....

There has to be give and take on contract negotiation..... if you want a reduction in price - what will they get to incentivise them ?

The fastest build i ever managed was when i promised (in the written contract) a bonus if they finished before x date.... it certainly got them there every day - as it happens they did not complete on time... so did not get the bonus but the build time was near as damit to the finishing date.....

Doozergirl

I'd agree with clutton. Everything is so unknown and prices are going up constantly that I wouldn't try too much. Our last big project came in well over budget with a 5% increase in VAT and inflation that feels a lot more than the reported 4%. It's harder to negotiate discounts with suppliers and, ironically perhaps, we're fighting over decent labour where we're losing people moving from subbing to a regular wage packet for security. It's not a great deal of fun out there.

riva

Clutton, I'd read about people offering bonuses. What kind of a bonus are you talking about and how did you come to a figure?
They do have an incentive to do this build and we are now also hoping to get some mag coverage (with some luck) which, if it works out, will be a big boon to them.

joerugby

Sounds to me that you have not chosen the cheapest supplier but you want your chosen one to work for the cheapest price. If this is your priority I suggest you tell him you would like to work with him, and you now want a firm quotation, but he is £XX,000 higher than the next bidder and you want him to get as close as possible to this in his final offer.

Once he quotes you will have the opportunity to haggle a bit but you need to weigh this up against the inevitable extra costs that will arise in a job like this - you don't want to give him an incentive to rip you off later.

Let me give you an example. Our last renovation included a kitchen and as well as the main contractor we had the plumber, electrician, kitchen supplier, granite worktop supplier, flooring supplier and Aga supplier all working to a strict timetable. The contractor found dry rot. It took about ten days to work out what needed to be done. In this time you cannot stop all work. The job has to go on and costs have to be incurred which you have not approved in advance. In these circumstances you are relying on the main contractor to treat you fairly. Mine did, and I am sure that was at least partly because I had been fair with him on the price up front.