Quote gone up 5% because it's 2012?

Ladder22

I got a quote from a builder in October for a €30k job. I asked him to start in January and to price for a variation. Having sent me a revised quote, he's upped everything by 5% to "take account of 2012 prices".

Is he taking the proverbial?

BryanF

Ladder22 wrote: »

I got a quote from a builder in October for a €30k job. I asked him to start in January and to price for a variation. Having sent me a revised quote, he's upped everything by 5% to "take account of 2012 prices".

Is he taking the proverbial?

have you asked for an explanation?
now that he knows your serious maybe he's being more realistic with his pricing..

wirehairmax

There has been increases in materials since the New Year and fuel continues to rise with no limit in sight. Tradesmen in reputable businesses have also started to realise that they were working for below cost in the past year or 2. I know some who got a bit of a shock at end of year accounts time. Could be about time people got a bit more realistic in their pricing.

Ladder22

Hi Bryan,

We haven't spoke yet. I just got the quote today and I'm meeting him later this week.

It seems odd to me to be putting any inflation on a 4 month old quote, and particulary 5% when the general rate is only 2.5%.

It'd be great to see what more experienced people than myself think about it.

Cheers

muffler

I would ask him for a written breakdown of the additional costs and advise that you will be re-tendering.

archtech

When he provided you with the original quotation did he advise of a time frame of how long it stood for?

Ladder22

Hi Archtech,

No he didn't.

It's also hard to get a good handle on the cost side of things. He gave me a figure for the cost of each room. In each room he listed the names of the various jobs but he left out the cost for each of these jobs, which makes it very hard for me to understand if he's giving me a fair price or not.

I did ask him to give me the breakdown, but he refused.

archtech

Did you get just the one quotation or a number of them? its always best to obtain 3 or so, at least that way you will see if you are getting good value.

Did you engage a professional (Architect or Arch Tech or other) to prepare the tender documents. The fact that the builder gave you a cost for the works to each room would be considered acceptable, once he detailed what you were getting for the cost.

Victor

Ladder22 wrote: »

It seems odd to me to be putting any inflation on a 4 month old quote, and particulary 5% when the general rate is only 2.5%.

Construction inflation has little to do with general inflation.

Materials prices and wages are static or falling (individual elements will vary), I can't see them rising.

House Building Cost Index (Base Jan 1991=100) by Month: http://www.cso.ie/px/Doehlg/Dialog/diagramloop.asp?diasize=smallest&diatype=1&matrix=HSM09&timeid=201212531335&lang=1&noofvar=2&numberstub=1&noofvalues1=131&noofvalues2=1&ti=House+Building+Cost+Index+%28Base+Jan+1991%3D100%29+by+Month+and+State



While he may have under-priced the job, he may also see you as either a soft mark or trouble - it's a hustle - you need to bargain him down, but not so much that he walks away. Note that under-pricing may be his fault, but it becomes your problem.

Ladder22

Thanks Archtech

I did get 3 quotes, and in fairness he was the best. But I'm concerned he came in low and might be finishing high.

Have you any thoughts on the the 5%, new prices for 2012 line?

I didn't get a professional to spec, but I did write a detailed spec myself.

Ladder22

Hi Victor

The inflation information is great & I think you've hit the nail right on the head, in terms of the cause and the solution.

I had been planning to ask him to sign a contract based on the shorter RIAI white contract, & amended to take out the architect references, given that there's no architect involved. Do you think that would put me into the "more trouble than it's worth" category?

nager

Gypsum products and concrete products have gone up between 7.5% and 17% - other material prices will be heading up soon - they are all putting it down to increases in fuel etc. Dont know how true it is but - its common since the new year.

macadam

I am self employed and had a few Jobs priced in 2011 for march 2012 but most of the materials I use have increased by 10% and are due to go up again the end of the month this plus the vat and fuel increases is putting my quotes up by at least 15%.
I cannot afford to work at a loss, so I have no option but pass on the increases, these prices go up but NEVER come down.

charlie3

Ladder22
putting the price up 5% on a 4 month old quote that all sounds a bit fishy to me ,one would be scared to see what he puts on the bill when it comes to the end of the job and watch out for that other piece of paper with the list of EXTERS on it .

contract is the way to go

Certified

When did the VAT increase come in?

Kristopherus

Certified wrote: »

When did the VAT increase come in?

1st January.

DOCARCH

Kristopherus wrote: »

1st January.

I suspect that was sort of a trick question!

Only the higher VAT rate was increased from 21% to 23%. The VAT rate which applies to building work (amongst other things) remains at 13.5%.

While a VAT rate of 23% now applies to building materials - a builder (who is VAT registered) buys materials and (usually) claims back the VAT back and then charges VAT on his work (i.e. on labour and materials) at 13.5%.

Certified

Probably not the case, but the builder may not be vat registered or putting the job through the books. The vat increase on materials in that case would be fairly significant I would imagine, especially if he priced keen to get the job before the vat increase?
I wonder is he still the lowest quote after his 5% increase?