Do you need to know more information about the cost of house construction to help you decide whether to renovate or sell?

You might typically think of obtaining building cost advice from a builder, but did you know that’s not the only option? You can also obtain independent advice on how much it will cost to build your house plans or even your design ideas, from a Building Cost Estimator and a Quantity Surveyor.

Welcome to the Renovation Collaborative ‘On the tools’ podcast, where I interview industry experts to find out practical insider info and save you time and money. My name is Stephanie Skyring. I'm an Australian architect with 20 plus years of experience helping people create better, more environmental homes on any budget.

In the first four episodes of this Season, starting today, I focus in detail on house construction costs.

In today's ‘On the Tools’ episode, you’ll find out practical information about working with a building cost estimator; what they do, what their services cost and how they can add value to your next renovation or new build project. I talk to highly respected building cost estimator David Knight from Total Estimating Services in Brisbane.

Join me every Tuesday for Season 1. and find out whether to Renovate or Sell in Australia in 2024. 

INTERVIEW QUESTIONS

00:00 Introduction

01:19 What does a building cost estimator do on a typical house project?

02:12 What is the difference between a building cost estimator and a quantity surveyor?

03:38 On what size residential projects are cost estimators most commonly used?

04:31 What is included in a building cost estimate?

05:23 Where does your material and labour price information come from?

06:06 What are the benefits of obtaining cost advice from a cost estimator over a builder?

10:15 At what stage should I get a cost estimator involved?

14:41 What do a building cost estimator’s services cost?

17:00 Can building cost estimators provide advice Australia wide?

18:35 How would I get started with a building cost estimator’s services?

19:32 Key points summary

KEY POINTS SUMMARY

We covered so much helpful information in this interview. However, there are three key points that I want you to know:

1. The benefits of obtaining independent cost advice from a cost estimator (or a Quantity Surveyor):

• It’s impartial and obligation free.
• You get a very comprehensive cost breakdown, so you can work out what to change to lower your costs (assuming you will probably want to!)

2. Obtaining cost advice early in the design phase is critical to ensuring your budget and design brief align.

Preferably at two key stages:

• Concept (Sketch Design) Stage: As soon as you have a rough floor plan to determine if your ideas are feasible. This is when you decide whether to renovate or sell.
• Developed Design (DD) Stage: When you have more developed floor plans and elevations to ensure you are still on track. This costing must happen before you seek Town Planning Approval (if required for your site) or finalise engineering.

This is such an important process to follow to avoid cost blowouts in this incredibly expensive construction market.

3. For anyone obtaining a price from only one builder: The value of obtaining a cost estimate at Tender Stage to provide an essential education about what’s included (and excluded!) from your builder’s price. This should be a very open process to be discussed with your proposed builder before he prepares his tender price to ensure the costs can be compared.

WANT TO READ MORE?

Download the written version of the entire interview as a PDF.

S1:E2 'On the Tools' with a Building Cost Estimator-Transcript

Looking for more information on design, construction costs or environment?

You can find everything you need on the Renovation Collaborative website.

• Listen to the full podcast or get the transcript PDF edited into Q & A.
• If you're short on time, sign up for the Weekly Wrap Newsletter and get the concise podcast summary delivered straight to your inbox.
• You'll also find 11 easy-to-read courses demystifying the entire home design and construction process.

www.renovationcollaborative.com.au

IN THE NEXT EPISODE

In the next episode, you’ll find out what a quantity surveyor does, and get further insights into building costing that will add value to your residential project, whether you’re an owner, an architect, a building designer or a builder. I’ll talk to Flavio Costanzo, from Flavio Costanzo and Associates, Quantity Surveyors and Building Cost Consultants, in Brisbane.

RESOURCE LINKS

Total Estimating Services

www.totalestimating.com.au

CONTINUING PROFESSIONAL DEVELOPMENT (CPD)

Australian Architects can claim formal CPD hours for listening to the podcasts.

www.renovationcollaborative.com.au/continuing-professional-development/

GET IN TOUCH

The podcasts are about finding answers to your questions. We would love to hear from you if you have any questions, ideas, or feedback. 

www.renovationcollaborative.com.au/contact/

Do you need to know more information about the cost of house

construction to help you decide whether to renovate or sell?

You might typically think of obtaining building cost advice from a builder, but did

you know that's not the only option? You can also obtain independent cost advice on

how much it costs to build your house plans and also simply your design ideas from a

building cost estimator and also a quantity surveyor.

Welcome to the Renovation Collaborative on the Tools podcast, where I interview industry

insiders to find out practical information to help you renovate smarter.

My name's Stephanie Skyring.

I'm an australian architect with 20 plus years

of experience helping people create better, more environmental homes on any budget.

In the first four episodes of this season, I'll focus in detail on house construction

costs.

In this episode, you'll find out what a

building cost estimator does, what their services cost, and how they can add value to

your next renovation or new build project.

I'll be talking to highly respected cost

estimator David Knight from total estimating services in Brisbane.

Good morning, David, and welcome to the renovation collaborative on the Tools

podcast.

Good morning Stephanie.

Thanks for having me.

Absolutely, my pleasure.

So, firstly, can you tell me what a building

cost estimated does on a typical house project?

Well, typically the clients, whether it be a builder or an architect or an owner,

would send over the plans.

We'd review those plans and make sure we've

got enough information to give them back a pretty robust costing.

We physically measure the drawing, so we'll work out how many linear metres of floor

joists you'll have compared to how many square metres of ceramic floor tiles you'll have.

Against those measures, we put our market rates costed out.

Then we have basically a costed bill of quantities from putting your sight fence up to

your final clean.

So we're really building it on our desk and

we're providing a detailed estimate that a builder will need and users to formulate a

contract price.

So can you tell me what is the difference between a building cost estimator

and a quantity surveyor?

Quantity surveyors are more commercially orientated.

They're university and tertiary educated.

They've got degrees.

Cost estimators you'll probably find, funnily enough, more cost estimators than QSEs in the

world.

But the majority of cost estimators will be

specialising, for argument's sake, a Gyproc supply and place company employ a cost

estimator.

Yes, of course.

To work out how much metal framing, gyprock, plumbers contract, plumbers contract,

electrical work, roof companies every supply company, trust manufacturers, and timber

manufacturers will all have their own individual cost estimated.

They don't employ QSS, but they'll train a cost estimator.

They'll have a building cadet on your larger builders will employ building cadets and train

them in cost estimating.

Back in 81, when I left school, I was thrown

into an estimating cadetship at the old timber and hardware company called Robin Brown back

in the day.

So that's a long time ago.

But I was trained in doing timber and hardware takeoffs that we would then supply to the

builders who were then tendering on little on jobs.

Okay. Right, right, right.

So it's a very different background, but it's

very much more on the tools, isn't it?

It's all hands on.

Yeah, yeah, yeah.

It's all hands on.

So, going back to building cost, estimating what size residential projects are

they most commonly used on and most beneficial?

Beneficial, I think you would probably find the larger renovation jobs circa, you

know, $750,000 upwards.

We see a lot of projects in the one to two and

two and a half million dollar range in residential extensions and renovations.

We see a lot of new, larger homes.

Of course, we're predominantly used by

builders and architects and owners who have got something that's fairly bespoke.

So we'd never see a project home cost?

No. No. Well, that's sort of dealt with by the project home company, isn't it?

They'll read their book and that's the price where we'll read a plan and have to work

out the price.

So, thinking about what a building cost estimated cost includes, is that

everything, or.

What can it include?

It's everything that you want.

You've got to.

As an owner, you've got to be fairly clear what you want.

Like, if I get a job in, we'll ask them, is the pool included?

Am I pricing this so you can compare it against the only builder you can find to do

the job? Are you building it yourself?

Because I certainly know on projects that I've worked on and that I've had

you doing building cost estimation on, often the clients will say, well, we'll do the

kitchen, or they take out bits of it to try to, you know, they'll have an Ikea kitchen or

whatever they'll do to try to maintain costs.

So you can sort of manage all that.

So therefore, in summary, there, so you are including landscaping or fencing or pool or

whatever needs to be dealt with.

It can be included in a building cost,

estimator's cost.

How do you put a cost estimate together and

where does the price information come from? So both material prices and labor prices?

Yeah. Well, we're a little bit lucky because we work for so many builders in

Brisbane.

They give us feedback.

We get a lot of feedback from suppliers.

So we're kept up to date with concrete timber

windows.

Again, you know, builders will provide some

numbers on aluminium windows.

So we check all of our rates against the

latest quote that we get.

Okay.

So we're constantly in our database manipulating price files.

So if clients come back in a year's time and want something repriced, we just have to

basically put it back in the system and push a button.

Right through the numbers.

I know that people, when they've got some

plans, they'll often think that the first thing they'll do is think, I've got to go to a

builder to get some costing advice.

What are the benefits of going to a building

cost estimator instead to get a cost breakdown and advice over a builder?

Well, primarily what you'll get from us is basically more intimate knowledge about

your job.

We're independent.

We will cost it the way we see it.

So there's no emotion.

Yes.

We'll unfortunately tell you bad news most of the time.

All the time.

I find where builders may not want to tell you bad news all the time.

That's so true.

But it's coming.

It's coming, it's coming.

It's going to get you sooner or later.

Has to do it before you spend a lot of money

on your, on your plans.

Yes.

And council applications.

So it's.

Yeah, it's.

Knowledge is gold in this system, in.

Scenarios, because I know getting prices myself from a builder often, sometimes

they'll give you a full breakdown, sometimes they'll just give you a bottom line and you'll

have to ask them, can you break it into trades?

Can you give me something? Can I see some transparency?

So that is the benefit of a building cost estimator, that you'll get a full, very

comprehensive breakdown, in my experience, and that then you can take that apart and try to

see where the costs are.

Although having said that, people always

think, oh, you know, well, where's the, where's the big cost?

But it's never like that, is it? It's always just filtered across the whole

thing.

Death by a thousand sword cuts, that's.

Exactly what it is.

And when it is over budget, it's the only way you can attack it to get stuff down.

There is no magic wand.

I just always think it's just like reduced floor area is really the only way.

Just build less.

That's probably the worst thing you can do.

Oh, really? Why?

Well, you're only taking out floor and a ceiling and a roof.

You're not looking at the engagement of the claddings on the walls and the windows and

whether it should be aluminium or timber.

Have you used the site properly?

And hopefully all of those things are sort of caught at the start and at the end.

I know if I've already taken all of those out, there's nothing left but floor it.

And that's the problem with square metre rates.

If your house comes out at $5,000 a square metre, I'll just take out 100 square metres.

That doesn't work.

It's probably less than half that you'll be

taking out.

Oh, really? Oh, my God. What are the solutions?

We're coming up to that.

Just talking again, just a little bit further about the benefits of working with

a cost estimator to get a cost.

So I think, particularly if you are going to

get a single builder, like you've got one builder in mind, you're not going to get a

tender.

And I find often in this market in Brisbane,

builders won't tender anymore.

So many of them, because there's so much work

out there.

They're just like, we're not tendering.

So your options are to choose a builder and then you want to know, just for your own peace

of mind, because the cost is so high if you're getting market value.

So then if you can get a building cost estimators cost as well, I suppose that gives

you some level of leverage.

Do you find that you used in that way very

much or not?

Leverage is such, but it just gives you the education you need.

So I suppose then if you do.

Get your estimate and you've got the builder, I'm just wondering how you would

use that, then.

So you would approach the builder and say,

well, look, I've got this cost.

I would again, if you can get the.

If you get into cost estimate done beforehand,

you can ask the builder to then provide their information similar to the bill summary.

Oh, okay.

So be very easier to compare, be.

Very open about it that you've got the estimate and because even when we've.

Been asked to do tender verifications, we'll do a price for an architect after.

They'Ve gotten the builder comes in, because.

The builder's over budget.

Not over budget.

Right price.

It's just unfortunate that his right price is

over the client's price.

Yes.

So we're trying to work out what's going on.

So we'll price it and then we'll have our bill summary.

It will never match up to another builder's bill because everyone puts things in.

Oh, they do.

They absolutely arrange it in a different way.

It's like we then add things together to see where those differences are and try and

explain where the differences are.

So thinking about working with a building cost estimator for a typical custom

renovation or new house project, at what stages of the project would I get a cost

estimator involved?

Ideally somewhere between that sketch design and design develop stage.

I know, working with you that you used to do preliminary cost estimates on

earlier sketch design, and I now know, because of the cost of construction being so high in

Brisbane and the changing price, that you might put a price together today on a

preliminary sketch design and then the job wouldn't be built, hypothetically, start

construction for another year and a half.

And so both labour and materials would be

increasing over that time.

So that then you've started moving towards, is

it get putting together a full bill of quantities so you can feed in those changing

numbers? It is.

It really, again, depends on where we, where we slide into the equation.

Again, if it's.

If it's sketch design, we will still do the,

you know, those basic square meter rate early, what we call, like an early cost plan.

Yes.

At that early cost planning stage, we're sort of using pricings that we've done

or jobs that we've done in the past.

So we're sort of calculating a bulk area on

this drawing using those rates and putting it on this job.

But, yeah, at that DD stage, we say, look, you know, even if we don't have engineering, we

don't have a schedule of finishes, we will.

We always recommend to get the bill of

quantities done at that state before you engage, you know, before you go to the

development approval, if it's a small lot in the middle of Paddington.

That's right.

You've got to.

Got to get those numbers before you spend all

of that money.

That's right.

Because once you've got town planning

approval.

It'S painful to go back.

Yeah. Yeah. Because then you would have to get your town planning approval again

and it's all just really messy.

So when you talk about a preliminary bill of

quantities, that's different to the one at the tender stage, is it?

Yeah. Yeah. So when we get involved at the tender stage, we've got complete.

We've got complete documentation, we can spend a day going through the documentation without

measuring a thing.

Because if I've got 80 pages of specification

and I've got 30 pages of joinery drawings, even though we know we'll provisionally sum

the joinery, but on those drawings is all the construction detail that the builder needs to

build around the joinery.

So it's all of the carpentry and the gyprock

and the lighting and all of that is very specific.

So again, we've got to, we've got to be every trade on the desk.

So we've got three stages there.

I'm just trying to get you to sort of

articulate what the difference is between those preliminary drawings versus the

preliminary bill of quantities drawings.

For argument's sake.

We might get a floor plan.

Yes and no elevations.

Oh, okay, great.

Yeah, that articulates it really well.

So if we get a floor plan without any elevations, and we might do some desktop

investigations through realestate.com or whatever, it's a renovation or whatever, we

try and work out the land and access logistics.

So from that we can then understand, okay, we know the rough scope.

If it's a lift and build and an extension job, we'll go back through our database and try and

find a similar one and use those rates to calculate that job.

But when we're doing a preliminary bill of quantities on that, you know, that's developed

sketch or that DD's developed design stage, we will price that job back.

To that very preliminary one.

So that was hypothetically just a floor plan

only.

It might have been just trying to work out if

a job was feasible on a site.

Before you just do anything, it's like, look,

quick layout.

Look at what we've got.

You know, is this even going to stack or should we just sell?

You know, this is the renovate or sell location where we still do those.

Preliminary early cost plans.

Okay, so then you've proceeded a little.

Bit further with that and you've got some layouts.

You might have some elevations to go with those loose elevations, an idea, a loose

schedule.

And that would be.

We could do the preliminary bill of quantities on that.

And that would still be before town planning approval?

Yes, definitely.

Yeah.

Before engineering, because we see so many engineers drawings on so many plans.

We've sort of can design sizes of steel beams.

That's right.

We can put those in.

Yes. If it's got a truss roof, if there's skillion roofs, you can work out the

type of structure.

You'd be very close.

So getting on to working with a building cost estimator, can you give me a

rough guide to what I would expect to pay for a cost estimator service.

So we're assuming that I've got some kind of a project with a construction budget over,

about, over the 750,000, 800,000.

And it's pretty easy to get there in Brisbane

at the moment.

So that sort of $800,000 job, I don't know how

large that is.

I mean, that could be anything, depending on

the site and the finishes, et cetera.

But comes down to the difficulty of it.

It does just a really loose range.

It's just so people who don't know what a cost

estimator does and they think, well, this could be really useful on my project.

How much should I budget for those.

Services before coming here? We looked at our average invoicing for the

last twelve months based on those smaller jobs, and they really ranged around about that

12.50 mark.

So that's preliminary cost on this sketch design.

So then we looked at the design develop plans and we're doing those preliminary bills

of quantities.

They're sort of coming in at nearly double.

We're doing it economically because we're using our own internal resources, so we're not

having to refer to engineers plans or ten page specifications.

So we'll always ask the client, is it going to be basic, medium or a luxe finish?

We'll plug in those luxe finishes or a medium level of finish.

They've got a fairly good indication of what the end result will be without going that far.

And so then moving on to the last stage, which is when you've got your full

drawings, you've got your engineering, your soil test, you've got everything you need

about the site.

You will have maybe full schedules, you've got

your cabinetry drawings, you've got all that information that's full bill of quantities

that would either come from potentially an architect or from a builder if you're doing

the work for a builder to price for him.

So that sort of, that sort of.

Number which gives you that sort of robust document that you can either, you know,

I hate to say it, but bash it over.

The head of builders and the banks.

Yes, that's right.

You know, that's about a 50% on top of that middle stage.

So they were averaging out at about $35 to $3,600.

So it was sort of like the 1200 mark, the 2400 mark, and then the 3600 mark.

That's so helpful and it makes so much difference.

That is just money so well spent.

Before you launch into construction, at any

stage there can cost estimators give advice for the whole of Australia or are they more

locally based? Like how do they work?

If I've got a property or something over in regional or in Sydney or somewhere, how does

can I get you.

Give that advice all even quantity supplier or cost estimator?

They're all basically local knowledge.

We all, if asked to do regional, we can refer

to gazetted magazines that come out quarterly that tell us what prices are doing regionally.

So what we normally do is we'll, if we're doing a job in Roma or Gundiwindi, we'll price

at Brisbane and then we either attribute a zone allowance to it depending on if we're

doing the preliminary sort of estimating.

But if we're doing like a tender for a builder

and Gundiwindi for a big house, we'll price at Brisbane and then we'll go through every cost

and we'll say, right, oh, we're pretty sure the carpentry up there is going to be the

same, but the block work and the concrete is going to be 30 40% dearer.

So we can then change those numbers right at the end and then provide a more detailed cost

for that zone rather than just a blanket percentage.

And I think things to bear in mind then obviously, which you've just mentioned

about the costs of transportation of materials out to regional areas.

That's a really big cost.

That's a big cost.

We just did a very large home on Fraser where

it was nearly 25%.

Oh, because everything has to go across in the feed.

Yeah. And waiting times, like trying to work out, you know, the worst case scenario

and waiting time for, you know, the gyprock delivery and the accommodation for trades.

Oh, wow.

Yeah. Mind bottom.

So my final question here, if I wanted to engage a building cost estimator to

get advice on my renovation plans or whatever I'm doing, how would I start?

You've told us the costs there.

But just what information do I need.

To get together as much as possible? Yes, obviously the plans to get, like most

clients that are referred to us will ring us.

And what do you do?

Briefly go through what I've just basically discussed and then I'll ask them.

Look, just send the plans over so we can find out because you won't know the questions you

need to ask me until I look at what we've got.

And then I'll be asking you, what else have

you got that we can have to make it more robust?

Okay, thank you so much.

David Knight from total estimating in Brisbane

for sharing your knowledge today to help everyone renovate smarter.

Wow, what a fantastic interview.

I've been working with David from total

estimating services for years, but I learned so much behind the scenes info today about how

a cost estimator works and.

How they can really add value.

To conclude today, I just want to draw your attention to three really important

points.

We covered so much today, but these are

probably the three that I think.

Will add the most value.

The first and most obvious point was the benefits of obtaining independent cost

advice.

It's impartial, it's obligation free.

You can get a full breakdown of what's included in your job so you get a really good

education about what's included and what's excluded and what everything costs.

So you can drill down on the design and find out how to reduce costs, assuming that you'll

probably need to in this market.

The second point was the importance of

obtaining cost advice early in the design phase before you go too far, preferably at two

points at concept stage, just when you have rough floor plans so you can get an idea

whether to renovate or sell and work out if your project is even feasible.

If it is feasible and you continue on, the next stage to validate those costs and make

sure you're still on track is at design development stage.

When you've got elevations, you've got floor plans, you've got a bit more information.

But before you go to town planning approval and before you get too much detailed

engineering input, because if you need to make any changes, it's too expensive to go back

after this point and.

Have all that design redone.

The third point was for anyone getting a price from just one builder.

And it's the value of obtaining a cost estimate at tender stage to really find out

what's included and excluded in your builder's price to get a really thorough education of

what's in there in case your builder only gives you a bottom line without much

breakdown.

If you decide to go this way, this should be a

very open process with your builder and you should let.

Him know what you are thinking of.

Doing so that therefore, when you get the estimate back, you're able to compare

and talk about this estimate with your builder.

In the next episode, you'll find out what a quantity surveyor does and get some further

insights into building costing that will add value to your residential project.

Whether you're an owner, an architect, a building designer, a builder, I'll be talking

to quantity surveyor Flavio Costanzo from Flavio Costanzo and Associates in Brisbane.

Thanks for listening to renovation collaborative.

Sign up for the weekly Wrap newsletter and get the concise podcast summary delivered straight

to your inbox.

Also, find the full transcript PDF edited into

Clear Q and A on the renovation collaborative website renovation collaborative.com.

au.