I recently had a conversation with a client from my consulting practice, where I handle construction disputes and litigation as a subject matter expert. This client is in the middle of a project that's gone awry, with the builder failing to follow plans, communicate effectively, and supervise the subcontractors properly.
During our conversation, the client mentioned wanting me to finish the project but assumed I would be "too expensive". This sentiment isn't uncommon, and it needs addressing. Many people start with the lowest price as the baseline, considering anything above that as expensive. However, in reality, the lowest price often indicates inexperience, poor cost management, and potential future issues.
The Pitfalls of Low-Cost Builders
In my experience, low-cost builders often don't know their true costs, overhead, or how to manage cash flow. This frequently leads to unfinished projects, as these builders realize they are losing money and start stonewalling the client. Ultimately, homeowners end up paying more when they have to bring in a new builder to complete the job—often more than the initial quote from a higher-priced, more experienced builder.Understanding the Cost Breakdown
As a builder, I purchase materials from the same suppliers and work with a similar pool of tradespeople as my competitors. The difference often lies in the human resources allocated to a project. For complex projects, we allocate a full-time site superintendent and a project manager who spends significant time in pre-construction, planning every detail and ensuring accurate bids and contracts. This thorough planning and management result in a smoother, more efficient construction process.The Importance of Proper Project Management
Having enough people to manage and oversee a project is crucial. Without adequate supervision, tradespeople are left to make their own decisions, often leading to errors and delays. A well-managed project requires a dedicated team, including a site superintendent to coordinate trades and ensure work is done correctly and on time. This level of management might come at a higher cost, but it ensures a project is executed according to the plans, with fewer surprises and better overall quality.The Value of a Better Experience
What do you get for this higher cost? You get a project executed per the plans, with someone critically overseeing the work, managing a well-planned schedule, and addressing issues promptly. This leads to a better project and a better client experience. While it does come at a cost, the value lies in the quality and peace of mind knowing the project is in capable hands.In my consulting practice, I often see disputes arising from contracts with unrealistically low prices. These projects are doomed from the start because the builder isn't making money, inevitably leading to all sorts of problems.
Remember, you don't get more for less—you get less for less. When considering a builder, don't automatically assume the lowest price is the best option. Quality, experience, and proper management come at a cost, but they are worth it to avoid the pitfalls of poorly managed projects.
I'd love to hear your thoughts on this topic. Feel free to ask me a question or suggest a topic for me to comment on.
