The Construction Estimate Process

So you are thinking about a new home and you need to get a construction estimate, whether simply for budgeting purposes or for negotiating a firm price contract. The big question will be whether it is going to be accurate, because if you are like most people, you have a limited budget and skyrocketing costs might easily be put you into a situation of financial distress. At the end of the day, especially here in The Philippines where there are many non-licensed builders and next to know consumer protection, if the estimate is inaccurate, or the contract is based on a price that is flawed, you risk been stuck with a half finished house and considerably more paid than what it will take to finish. If you do not pay more, the contractor will head for the hills leaving you with little recourse.

Do avoid this scenario, we would like to give you some simple suggestions of what to do, and what not to do, right from the start before your back is against the wall.

1 – Do NOT ask for a per/square construction estimate , unless it is for rough budgeting purposes only

Every house build is different and a construction estimate based solely on the square meter area will probably be wrong. This can work both ways and either you will get a “safe” price from a reputable contractor who will cover himself for all eventualities, meaning you might be overpaying, or the less than reputable contractor will give you a low-ball price to get the job , then start hitting you with extras as soon as the hook is set. On the flip side, asking for a square meter price can also filter out the less than reputable builder. If a contractor does give you a square meter price, then it is a huge red flag.

2 – Make sure you have detailed construction drawings for the contractor to base his construction estimate on.

The old saying that you cannot compare apples to oranges, applies perfectly here. If your construction drawings leave anything to subjective interpretation, then some contractors will err on the safe side and be high, while others will again low-ball, hoping to hit you with extra charges once you are well into the build. Floor plans and a 3d rendering ARE NOT sufficient to prepare a proper and accurate construction estimate. I have published more on this subject here

3 – Get a schedule of budget items the construction estimate is based upon

With any home build, there can be a a high degree of cost variance on items that you, the client, will want to finish your house with. This includes tiles, countertops, electrical and plumbing fixtures and cabinets. You need to make sure that what you choose is allowed for in the budget. Again, a less than reputable builder may estimate something like tiles at 20 pesos each then when you pick out the tiles you want, find that there is nothing you like in the that price range the contractor has allowed. An alternate solution is to pick out all items before you sign a contract and ensure that the product names and codes are included in whatever contract you sign.

4 – Do Not Rush the construction estimating process

A proper construction estimate take time, and for the average 100-150 square meter house, it takes us a week or two to do a proper one. If the contractor you are talking to appears too anxious to get a deal signed and the deposit in his pocket, this is another huge red flag

5 – Do the proper background checks on your contractor.

Though you may think of this in terms of checking out the quality of the builds he has completed before, it is a good idea to ask the questions of whether there were a myriad of surprise changes which dramatically altered the initial construction estimate the builder provided. It is always best to not rely on only 1 or 2 referrals which the builder provides, and instead do your own research. Dumaguete, like many provincial towns in The Philippines is a pretty small and close knit community. If your builder has been around for awhile, then someone will know them and you might get a more honest assessment from them. It is always important at the same time to check on your contractor’s financial capabilities. If his estimate is wrong, will he have enough money to finish the contract regardless, or will you have no choice to pay extra?

We here at DPX Construction know the full value of ensuring that the prices we give to our clients are accurate, and take each step of the estimating process is done with care and accuracy. We will nt rush it to get your deposit in the bank, only to create headaches for both parties later.