8 Building Myths — Exposed
If you’re looking to start a building project, the industry can be a mysterious one — almost like a closed society where builders have some sort of secret knowledge. To the outsider, it can be difficult to navigate and in some cases overwhelming. I want to set straight some of the myths that pervade the industry as a result.
By Luke Tuckwell - Director
1. The builder charges an absurd amount of money
The price of a building project includes the cost to use contractors and the labour required for that project to be completed. In most cases, builders generally charge a fee on top of that cost, usually calculated by a percentage amount, called the margin. This covers company overheads, plus a profit. It’s the same as a can of tuna, which is sold at a higher price than it costs to produce.
To take the analogies further, building is no different to purchasing a new car. There is one cost associated with buying the stock standard model, but the price of the car increases as options and extras are added. If changes are made to a building project e.g. different tiles are used, a wall needs to be changed or more expensive taps are required , then the builder must adequately cover the cost of that change.
There’s no way around it, a quoted price from a builder will always be large, but keep in mind that all the small numbers, all those little things that make up the project, do add up.
Tip: Confirm the margin you will be charged by each builder you’re receiving a quote from, and what the margin will be applied to.