Tip 5: Make Sure You Have The Right Paperwork

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Make sure you have the right amount of documentation for your construction project. Tip 5/7 of the series on ‘7 Things to Consider Before You Build’. During the process, there is going to be plenty of paperwork and documentation involved on the project.

My recommendation is to encourage you to pick out a well experienced Architect to help you in the preparation of the documentation and paperwork through these processes and during Construction. Always remember that failure to have the right details and amount of documentation and paperwork can really affect not only in the determination of your development application, but also result in obtaining inaccurate quotes from Builders (which lead to cost blowouts).

Make Sure You Have the Right Amount of Paperwork and Documentation to expedite the process and mitigate misunderstandings and confusion around your project. I can’t tell you the amount of times we have been given insufficent documentation on projects.

This results in there being a huge disparity between the quotes received.

Tip 7: Choose The Right Builder

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I could probably talk about how to select the ‘right Builder’ for a project for hours on end, but ultimately the most important factor is TRUST. Nothing is worse than choosing a Builder you didn’t trust from the very beginning.

There are so many telltale signs to look out for when it comes to authenticity and ethics. DON’T choose a Builder that easily lowers their quote. This is a sign that they probably haven’t done an accurate costing of the project and aren’t certain of their true profit margins.

Never make your final decision based on cost as variations along the way may dramatically change the actual cost for the project. Working closely with a trusted Builder ensures that there are no unsubstantiated variations that can easily cause a budget blowout.

More importantly, choose a Builder that stays true to their word and is able to do what they promised.

How to Avoid Building Problems

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The secret in avoiding building problems stems from the source of all evil, and that is MONEY.

Time and time again I have witnessed many projects being put on hold or legal litigations being raised due to cost disputes. All of which could have been easily avoided had the project’s budget been realistic from day one.

The sure-fire recipe for disaster in any construction project is to force the construction costs down in order to fit in within the ‘budget amount’. Whilst it is normal to get excited about building your own house, do not make the mistake of rushing to get your project started when you are unsure of a realistic construction cost.

Additionally, do not rush to sign any contracts until you are certain that your finances are in order and that you have allowed for contingency sums for your construction. For anyone that is eager to start building even though the quotes received have come well over budget, my advice to you is to just hold off. Wait. Re-evaluate and reassess. Then make a rational decision whether you would like to keep the same scope of works and finishes (in which case, wait to save up more money).Or, you may consider reducing the scope of works and finishes in order to help reduce the construction cost. Assuming you have obtained quotes from professional and reputable builders, there is going to be a reason why the quotes have come in well above your budget.

Do not make the most common mistake of calling for more quotes until you stumble upon a builder that may under-quote on your project by mistake (or perhaps on purpose in hopes of claiming on variations).

In construction, you often only get one chance to build it right. The last thing you want is to regret settling on a dodgy build that is riddled with defects.

7 Things to Consider Before You Build - Magico ConstructionsMagico Constructions

7 Things to Consider Before You Build

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Looking to build your next project and in need for some advice as to what to be aware of?

Not to worry, this article will help to lay down the some of the groundwork.

Below are some key factors to consider before you begin construction.

 

1.  Choosing the right Architect to help with the Design.

We can’t stress how important it is to have an Architect on board to help with your project’s design. Although the costs of engaging an Architect is typically higher than that of a draftsman, we strongly believe that it is worth the investment. Having a well-designed project will not only help add value to the property, but more importantly will help to improve the user’s experience of the building.

A well-designed building can help to invoke a feeling which will affect the user’s emotional well-being. (for better and for worse) Studies show that a well-designed space can help people heal faster in hospitals, learn better in institutions or elevate the user’s mood.

2. Make sure your project has the right amount of details.

Before you go out looking for a ‘quote’ for your project, you should ensure that you have sufficient information regarding the project’s details. We recommend holding off on getting quotes until you have finalised the scope of works for your project.

Without sufficient details, any quotes you received are likely to be unsubstantiated and can often be misleading. A common mistake we see is owners asking for quotes based on just a DA-stamped drawing. You should wait until you have at least the following documents:

  • Survey Plan;
  • Schedule of finishes / Specifications;
  • Architectural drawings (Plans, Elevations, Sections, etc.);
  • Structural Engineering drawings;
  • Stormwater / Sewer Diagrams

3. Have your finances in place.

Although obtaining a project’s finances is becoming increasingly more difficult. It is important to first have your finances in place before you begin getting quotes on the project and begin construction.

You are more likely to be taken seriously and given accurate quotes if you have obtained pre-approval for your finances on the project. It goes without saying that no one wants to ‘waste their time’. This is especially true in construction as the quoting process for a builder can often take weeks to complete.

4. Have a realistic budget.

The word ‘budget’ is often considered to be taboo when it comes to construction projects. However, being transparent with your budget upfront during the design stage of the project can help prevent future heartbreaks. Too often people begin designing or even constructing their project without first obtaining an accurate construction cost estimate on their project. It may be worthwhile considering spending a few thousand dollars on a Bill of Quantities from a Quantity Surveyor as it could lead help prevent you from getting a  hefty variation on your project which could cost many times more.

5. Know thy neighbours.

This is something that is often neglected by new home owners who just purchased their property. We can’t stress how important it is to know your neighbours and vice versa. Having a good relationship with your neighbours are crucial as they could potentially object against your DA submission, which may result in your project being rejected and having to be re-designed. By having a good relationship with your neighbours, this will help to mitigate any potential complaints that may arise.

6. Always do your own research.

You should always conduct your own research first. (This applies to the earlier points mentioned) Unlike the olden days whereby there was no internet, information is now readily available and is often just a search away. Though that’s not to say that the internet will always provide you with the ‘right’ information as you will need to cross-check your sources, it is a good starting point.

7. Selecting the right Builder.

Choosing the right Builder can be difficult. For most people, referrals are normally the way in which they decide on the Builder. (This is a topic we will cover more in depth in the following blog post.) To get you started though you should consider the following: company history, project experiences, quality of past project completed, visit their current construction jobsite.

8. Enjoy the experience

Assuming you have done your due diligence with the above 7 factors which were mentioned, your project should be off to a good start. For most people, a construction project is something that they will only experience once in their lifetime. As such, we recommend you enjoy the experience that come with it. Though the process will be stressful at times, it should be rewarding at the end of the project. Finding a Builder that is passionate about their work will help to make the overall experience enjoyable and rewarding.

If you have an upcoming project which you are experiencing problems with, we’d love to help.

Simply fill out our contact form HERE and we will get in touch with you to see how we can assist you with your project.

What Professionalism Means to Us - Magico ConstructionsMagico Constructions

What Professionalism Means to Us

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You hear it all the time.

I’m a professional… We are professionals… Professionalism… You get the point.

So many people claim to be ‘professionals’ and to exude ‘professionalism’. But here is what the word means to us.

To be a professional, you’ve got to at least act professional and always do so regardless of who the other person is.

And by that, I mean you’ve got to at start with the basic fundamentals of showing respect to the other person (regardless if they are your client, business collaborator, supplier, subcontractor, or even staff that is working under you)

So many people claim to be professionals when they struggle to even be able to do the basics.

The simple gesture of being punctual shows that you have at least respect of the other person’s time. I’m sure most business owners can relate to the cliché saying that ‘time is money’ and that time is the most valuable commodity we all have.

There’s little excuse for tardiness if you’re claiming to be a true ‘professional’. (Albeit that Sydney’s traffic can be unforgivable at times)

Outside of punctuality, professionalism to me means that you have some level of integrity. For example, we always value transparency with our clients.

Having integrity starts with honesty and having a strong sense of morals and ethics.

As Zig Ziglar once said ‘With integrity, you have nothing to fear, since you have nothing to hide. With integrity, you will do the right thing, so you will have no guilt.’

If a budget is unrealistic or not suitable for us, we’ll say it. If our on-going commitments to other projects mean that we won’t be able to take on more projects, we’ll say it.

Those in the construction industry has no doubt experienced the following before.

A builder is invited to quote for an upcoming project and expresses interest in the early stages. However, because they are already running over-capacity, they haphazardly submit a ‘quote’ that comes in 50% or even 100% more than all other quotes.

That is just not professional.

It is our promise to our clients that we are builders that value professionalism and integrity. We firmly believe that transparency in communication is what helps to uphold both. (It’s why our business cards are designed to be the way they are)

So if you’re sick of dealing with builders that claim to be ‘professional’ and want to work with a reliable builder that values professionalism, contact us HERE.

Our 4-Step Tender Process - Magico ConstructionsMagico Constructions

Our 4-Step Tender Process

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The 4-step Tender Process for builders varies between different companies. We have developed our own 4-step tendering process over the years.

Often, builders may seek to use the simplistic ‘square-metre rate’ approach as it provides the quickest solution. However, this often puts the project in jeopardy of having multiple variations and being delayed.

As most builder companies may not come from a university background in quantity surveying, architecture, project management or structural engineering, the square metre approach is arguably the easiest way to generate a quote for a project.

At Magico Constructions however, rather than just trade qualifications, our management team is fully qualified with engineer-level professional construction qualifications and use only the best practice project management techniques to ensure your project is built on time and within budget”

 

Step 1 – Discovery and Consultation (5 working days)

  • Reviewing all drawings and documentation
  • Preparing a Scope of Works for the project
  • Identifying the construction methodology
  • Organising a site visit
  • Scheduling a meeting with the client of the project

 

Step 2 – Estimating and Taking Off (5-10 working days)

  • Sending off project details to our external Quantity Surveying (QS) team for a Bill of Quantity (BOQ) take off
  • Liaising with our QS to identify other potential cost-effective building solutions (‘Value-Engineering Solution’)
  • Conducting our own internal take-off and BOQ
  • Conducting site visit and identifying site conditions and restrictions
  • Preparation of tender packages for subcontractors and suppliers
  • Sending of tender packages to subcontractors and suppliers

 

Step 3 – Request for Information (RFIs) (1-5 working days)

  • Raise any questions regarding discrepancies between drawings/documentation
  • Contacting architects and consultants regarding any RFIs to clear up any ambiguities for the project
  • Reviewing BOQ from our external QS
  • Comparison between the BOQ from QS and our own BOQ

 

Step 4 – Finalising of the Proposal (1-5 working days)

  • Review of quotes from subcontractors and suppliers
  • Preparation of final proposal
  • Submission of proposal
  • Meeting with client to go through our proposal

 

Our tendering process ensures that our Proposal will be cost-accurate for the project whilst providing the client with a realistic construction timeframe.

The value this brings to our clients is that many potential issues are identified upfront and resolved prior to the commencement of construction. And thus, our clients are able to avoid unexpected variations during the construction process which may lead to a budget blowout.

For us, it is not about being involved in large amounts of tendering, rather we prefer only tendering on projects which we believe we’d be a great fit for. As such we treat each of our tendered project with upmost importance.

This is also the reason why many professional builders have now begun charging for their quotes as they have realised the value in which their proposal can bring to the client. Additionally, this investment of money and time can sometimes leave a sour taste when all the client wanted was to simply ‘shop around‘ in search of the cheapest quote.

 

If you have an upcoming project which you would like us to help with, simply fill in our contact form HERE.

One of our staff members will get in touch with you to see how we can help you with your project.

How to Choose the ‘Right’ Builder for Your Project - Magico ConstructionsMagico Constructions

How to Choose the ‘Right’ Builder for Your Project

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Selecting the right Builder is crucial to the success of your building project.

Without the right Builder, projects risk running over budget, being delayed and worse of all, being ridden with defects.

Below are some of the things you should consider when considering a Builder.

  • What is the company’s and staff’s background history?
    • Is it a relatively new building company? If so, then it is worth considering what experience the Builder may have prior to starting the company. The benefit of choosing an experienced and well-educated Builder is that they will have foresight to identify potential problems with your projects which will help eliminate costly variations and time delays.
  • Client testimonials can be misleading.
    • When reading past client testimonials, be wary of the authenticity and make sure to cross-check things. For example, you may cross check a testimonial to the project and ask to visit that project/site so that you can meet whoever left the testimonial. Not all client testimonials may be an accurate assessment of the Builder. (Similar to how online reviews may not always tell the real story)
  • NEVER choose the Builder who provides you with the lowest quote.
    • Generally speaking, you should NEVER choose the Builder who provides you with the lowest quote. The famous saying of ‘you get what you pay for’ is especially true when it comes to construction.
  • Ask to visit their current job site.
    • We are firm believers that you are only as good as your last project. Which is why we often encourage our potential clients to visit our most current job sites. It is not surprising that everyone has had at least one ‘outstanding’ project in their resume, but what distinguishes a great Builder from the norm is the ability to consistently deliver good-quality construction projects.
  • How systemised and organised is the Builder?
    • Ask how the Builder manage their projects and what systems and processes they have in place to ensure quality control. A well organised Builder will be using some sort of cloud-based project management tool and should have processes and standards in place. (Which could be in the form of having ISO-certification for Quality Control, Work Health & Safety and Environmental Management System)
  • Professionalism
    • Whilst many Builders claim to be a ‘professional’, few manage to really uphold this sense of professionalism. A true professional should be capable of arriving to meetings on time and conduct themselves in a professional manner in all forms of communication. This means no casual smiley-face emojis, no shorten forms of ‘thanx’ or ‘cu’, no penny-pinching in cutting costs to do with having a company website or proper email address.
  • Check that validity of their licenses and insurance
    • If your residential building project involves less than 4 storeys, it is imperative that your Builder is capable and eligible for HBCF (Home Building Compensation Fund). Did you know that you can conduct a search regarding the validity of the Builder License and whether there are any pending court cases online?
      Visit: https://www.onegov.nsw.gov.au/publicregister/#/publicregister/search/Trades
  • Does the Builder ‘care’ about your project?
    • Chances are if you’re speaking to a large volume-based builder, your project will be treated as just another drop in the bucket to them. If the Builder truly cares about your project, they should be pro-active about scheduling site inspections, meetings with you to understand the goals of the project and display enthusiasm and interest.
  • Has the Builder done their ‘homework’ and do they ‘understand’ the project?
    • The easiest way to distinguish this is to see whether the Builder has mentioned any site-specific risks or restrictions for the project. Another way is to gauge this is to see whether the Builder was able to reflect your desired goals and expectations for the project.

The reality is that selecting the ‘right’ Builder for your project is a complex process which involves weighing multiple factors across the board before making the final decision.

If you are someone with limited/no previous construction knowledge, it is probably in your best interest to seek assistance from an experienced professional (such as an architect or project manager) during the project’s tender review stage.

Although this will mean investing a bit of money up front, we strongly believe that it is well worth the investment as it could easily save you thousands of dollars in variations later down the track.

If you have an upcoming project which you would like us to help with, simply fill in our contact form HERE.

One of our staff members will get in touch with you to see how we can help you with your project.

Is There Any Room Left for Ethics in Construction? - Magico ConstructionsMagico Constructions

Is There Any Room Left for Ethics in Construction?

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Last week I received a call from a homeowner who stumbled across our newsletter that really got me thinking whether there is any room left for ethics in construction.

The lady had rang me to thank me for all the informative information she had been receiving from our newsletter and articles.

But from her tone I could tell something was troubling her. I asked her what was wrong and she informed me that she wish she had came across our company earlier on as she had already signed with a large project-home Builder under a Design & Construct (D&C) contract for her home.

Unfortunately, her experience thus far hasn’t been pleasant at all and she wish there was a good exit clause on her contract for her to terminate the agreement.

Unsurprisingly, her biggest frustration was the lack of transparency and honesty from the Builder. She mentioned that the whole design and development application (DA) process has taken nearly one year altogether and she was never informed about this from the beginning.

She begun to vent about her frustrations how the construction costs have sky-rocketed from the initial quote. More importantly she found that with each minor change, there was an exorbitant variation attached. As such the current construction cost no longer resembled the original quote she had budgeted for.

She felt that salesperson had tricked her as many of her requests were not included as part of the signed ‘package’. In her own words, she felt that ‘the base package was very bare bones’ and that she was being duped.

The only thing I could offer her was my condolences and some advice as to what to be careful of before she begins construction on her home project.

Sadly, as she had already entered into an agreement with this Builder, there was little I could do to help.

The only silver lining was that construction had not yet commenced, and she may have an opportunity to terminate the agreement with the Builder prior to construction (though that’d be dependent on the contract’s terms and conditions).

Every time I hear stories like this, I am filled with frustrations.

It makes me wonder if there is any room left for ethics in construction?

Time and time again, I find that consumers are being conned by these so called ‘Custom Home Builders’ who trick homeowners into signing contracts which contain exclusions and a misleading construction cost that could never have been met.

When we dig deeper and ask the question ‘why did you choose them?’, the answer is always (regrettably) the same.

Because they were cheap.

I suppose it begs the question then, how do you choose the right Builder? And if decisions are often being led by cost, when will this vicious cycle of deceit ever end?

Can ethical Builders even survive in this cut-throat market?

In recent times, we have found ourselves missing out on projects because the client chose to go with a ‘cheaper Builder’.

Every time when clients do go with a ‘cheaper’ or ‘cheapest’ Builder, we’ve found that the project will inevitable either be delayed, or the client ends up being hit with hidden variations.

Sure, that ‘cheaper’ Builder might have seem to cheaper when they quoted at the time. But the reality of things is that when the project is completed, the figure cost will never come close to that figure.

More importantly, when the project has finished construction it may not even look remotely the same as what was designed and will often be plagued with defects.

The best advice we often give to our clients is to look beyond just the numbers. Sure, it’s important to pick a Builder that has provided you with a quote that is within your budget. But you should never make your final decision just based on the numbers.

There are other key factors to take into account when selecting the right Builder.

If you’re looking to choose a Builder for your project, I’d highly recommend reading our article HERE which covers some of the key factors to consider before you make your final decision.

What is HBCF? - Magico Constructions Magico Constructions

What is HBCF? Home Building Compensation Fund Explained

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So what is HBCF and when is it legally required for a project to have HBCF in place?

In short, HBCF stands for Home Building Compensation Fund. Prior to the 15th of January 2015, it was known more commonly as ‘home warranty insurance’. (Some people still refer to it as home warranty insurance to date)

It is compulsory for all residential projects to have HBCF in place when the contract work is over $20,000 and under 4 storeys high.

Most people seem to have a false understanding that HBCF is meant to serve as some sort of ‘insurance’ for their building project.

Whilst it is true that it serves to cover and protect the client in certain events (which we will cover in detail below).

For most people, it is simply a fee you must pay which provides you little to nothing in return.

It used to be that Builder could obtain HBCF from various insurance companies such as GIO, Allianz, QBE, and Suncorp, just to name a few. (List of past providers can be found here)

However, on the 1st of January 2018, the NSW Home Building Compensation Scheme took into effect. There is now only one company that provides HBCF, which is icare.

The irony of the name ‘icare’ is one that most Builders probably can relate to and appreciate.

What does HBCF Cover?

As iCare phrases it: Certificate of Insurance issued by icare HBCF compensates homeowners for losses arising from defective and incomplete work where the builder or tradesperson:

  • Becomes insolvent/bankrupt
  • Dies
  • ‘Disappears’
  • Has their license suspected by NSW Fair Trading

So as you can see, for most people, these events won’t really be applicable to them.

In my discussions with other Builders, most feel that all HBCF really serves to do is to bail out the incredibly dodgy Builders and extreme cases.

However since it is a legal requirement for projects under 4-storeys to have in place, it is an expense that you must factor in when constructing.

Unlike comprehensive car insurance which will cover you for all repairs (provided you pay for the excess fee and premium), HBCF will not cover all expenses.

As of writing this, HBCF only provides a maximum cover per dwelling of:

  • $300,000, if issued before 1 February 2012
  • $340,000 for all other policies.

So in the event that your project costs more than the above amount, you will need to come up with the funds yourself.

How is HBCF Calculated?

Similar to comprehensive car insurance, the cost for HBCF will vary dependent on the ‘type’ of the project and the construction cost.

HBCF is usually calculated based on a percentage of the construction cost. However, for different project types (such as homes, duplexes, townhouses) the percentages vary.

There is also either a discount or loading applied based on which Builder you select for the project.

Example 1:

A new single dwelling project (C01) of the contract value of $2,000,000 equates to:

Base premium:$19,000.00

GST:$1,900.00

Stamp Duty (9% on Base + GST):$1,881.00

TOTAL:$22,781.00

Example 2:

A new duplex (2 dwellings) project (C02) of the contract value of $2,000,000 equates to:

Base premium:$19,000.00

GST:$1,900.00

Stamp Duty (9% on Base + GST):$1,881.00

TOTAL:$22,781.00

Example 3:

A new multi-dwelling (4 dwellings) project (C03) of a contract value of $2,000,000 equates to:

Base premium:$57,200.00

GST:$5,720.00

Stamp Duty (9% on Base + GST):$5,662.80

TOTAL:$68,582.80

(TOTAL for each dwelling)$17,145.70

Note: This is based on the assumption of there being 0% discount and loading for both examples.

So as you can see, the cost for HBCF varies between single dwellings and multi-dwellings.

In the instance of example 3. Whilst each dwelling is paying less for the HBCF covers the total cost of the HBCF. It ends up costing over triple the amount when compared with a single-dwelling project which has the same construction cost.

Another thing to keep in mind is that at the end of every construction project, the Builder must notify icare of the ‘actual’ cost for the project.

For instance, if the Builder had quoted $ 2 million dollars for a single dwelling project and it ended up costing $ 2.5 million dollars. The Builder will need to inform icare of the actual cost of the project and pay the additional cost.

Safety Matters - Magico ConstructionsMagico Constructions

Safety Matters

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This is the topic that we sometimes feel nobody wants to discuss.  

We had to write this article as recently a close family friend and subcontractor of ours was involved in a worksite accident. Whereby he fell off a ladder. 

As a result of this accident, our friend is now unable to move and has been hospitalised. He will now also require surgery shortly to address the bone fractures. 

It should come as no surprise that the project was poorly supervised and no safety precautions were put in place. 

In fact, when our friend fell off the ladder, he was lying there immobilised for over an hour.

Until the real estate agent came around during an inspection round and noticed he was lying on the floor in pain. (His mobile phone was left inside the property charging in case you’re wondering.) 

Just imagining what would have happened had the real estate agent not shown up. It scares us… He could have been lying there longer in pain. 

As a builder that treat our team of subcontractors as though they are family, this news broke our hearts and made us feel deeply frustrated.  

This accident could have been prevented in so many ways. 

In fact, any time any type of work is to be completed whereby is over 4m in height, there should be sufficient safety precautions being implemented. 

The Numbers

Did you know that falls from heights are the leading cause of traumatic fatalities in the NSW construction industry? 

More than 12,000 workers were injured after falling from a height between 2014 and 2017 in NSW alone.

Of those 12,000 workers, 25 died and more than 240 were permanently disabled. (Numbers obtained from SafeWork NSW) 

Just in 2020 alone, as of writing this in October, there have been 3 fatal and 25 serious falls that were reported to SafeWork NSW. (Number obtained from MBA NSW) 

Keep in mind this is just the number of reported accidents. I have no doubt that the actual numbers are far higher. 

Call to Action

To all the architects, developers and contractors reading this, we urge you to speak up when you witness dodgy practices. 

Stop rewarding the dodgy builders with construction contracts just because they are cheap on price. 

STOP putting a price on people’s lives. 

When you are designing a project, please take into consideration how it can be constructed safely in real life. 

Please speak up when you witness these bad practices and don’t just sweep them under the carpet. 

We always say this to people: ‘Safety is no joke. The risks are real when it comes to working on a construction site. The numbers don’t lie and if you underestimate things, you are at risk.’ 

Safework NSW has a great checklist that we highly urge you to download and begin implementing your projects.  

 

Registered Builders Sydney - Specialising in Heritage Projects, Single Dwelling and Multi-Purpose Builds

Get in Touch

 (02) 8018 4490

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