Frequently Asked Questions - Construction Cost Planning Services
Construction Cost Planning Services
- How Long Does It Take To Complete My Report?
- Why are some of the costs that the contractors we are using vary from the costs that your report indicates?
- How much is the report going to cost?
- Why hasn't the financier paid what you the QS have certified?
- How much will it cost me to build my house/workshop/offices?
- How do you arrive at your construction costs for a development?
- When certifying for progress drawdown reports to the bank on construction progress, what works are recommended for payment?
- What determines market cost?
- Do you visit the site every claim?
- Are you on the bank Quantity Surveying panels?
- What kind of experience do you have?
- What statutory elements are included in your reports?
Development check estimate = 7 to 10 working days assuming all relevant documentation is available.
Progress Claim Report = 3 to 5 working days assuming all relevant documentation is available.
Our prices are based on current market prices and sometimes contractors with good industry connections can obtain better than current market rates from subcontractors and suppliers. If developers or contractors have competitive quotations from suppliers and subcontractors they should be forwarded with documents when arranging for a development check estimate to be prepared.
The cost of any report is dependant on the size and complexity of a project. As all construction projects are different, quotes are provided on a case by case basis as they arise.
Often project funding differs in amount significantly from the construction cost. In this case the financier will require that the borrower, tip in the “gap” in the funding. This gap is generally paid by the borrower prior to funds being drawn on, a worked example below illustrates.
Construction Cost - $1,000,000
Loan Amount - $900,000
Say a progress claim is submitted for $200,000, and BMT &a,p; ASSOC agrees that volume of works is completed to site. The financier has $900,000 in funds set aside for the construction of the project, and generally it only pays the LAST $900,000 of the contract, leaving the borrower to pay the first $100,000.
From receiving the report the financier sees that the project has a cost to complete of $800,000 (Being the contract of $1,000,000 minus the works to date of $200,000). The financier will always hold the funds it requires to complete the development, hence in this scenario they hold $800,000, leaving $100,000 in funds available to the borrower from the loan, with the rest to be paid by the developer from his own funds.
For an indicative costing based on historical data, refer to our construction calculator located here.
BMT & Assoc utilise what is referred to as "market construction costs" in establishing a budget. BMT & Assoc are constantly researching and investigating movements in material and labour costs in the industry, through our relationships with major contractors and developers, and enquiries to suppliers
When certifying for payments, quantity surveyors will only certify on a cost to complete basis, that is all items and trade works that are completed and fixed to site at the date of inspection. Quantity surveyors will not certify for deposits paid on items not fixed to site (unless in exceptional circumstances negotiated between the developer and the bank directly).
A market construction cost is defined as the probable negotiated construction cost of any given project, tendered to the open market in a competitive tender situation.
BMT & Assoc will visit the site at every progress claim without fail, it is imperative to the process of certifying the value of works to site. BMT & Assoc utilises dedicated full time staff that visit sites daily. They are specifically trained in identifying works complete to site and work closely with the office staff to ensure accuracy and consistency in reporting.
BMT & Assoc service virtually all major financiers across Australia to mention a few;
- ANZ Bank
- Arab Bank
- Australian Securities Limited
- Balmain NB
- Bank West
- Capital One Property Finance
- Commonwealth Bank
- HG&R
- ING Funds Management
- Investec
- LM Investment Management
- Over Fifty Fives Mutual
- Orix
- Platinum Finance
- St George
- Suncorp
- Westpac Banking Corporation
BMT & Assoc currently manage hundreds of construction projects ranging from $1,000,000 to $150,000,000, in all national sectors including residential, commercial, industrial, aged care, specialist facilities such as pools and abattoirs.
In estimating construction costs BMT & Assoc consider all statutory requirements necessary to complete the project and receive occupation.
Disclaimer: This information should be read subject to the following conditions:
Information is published as a matter of interest only and is not intended to be relied upon by readers. In any situations which may be similar to matters herein readers should exercise and rely upon their own judgement.
Neither BMT & Assoc Pty Ltd nor any of its officers or employees bear any responsibility for any error in the material published here or in any previous publication, or for any damage or loss resulting from any reliance on any material published here or in any previous publication.
These FAQ's are issued as a helpful guide and is not intended to, and does not cover all aspects of the topics discussed. Professional advice should be sought before any action upon these topics is undertaken.