What is the difference between a feasibility study and the free estimate?
Free Estimate Example:
You want to renovate a bathroom & kitchen in a standard 1970’s/1980’s Auckland home. You find 3 renovation companies: ABC Renovations, 123 Remodeling, and XYZ Renovations. All three renovators come out, look around the home, talk to you about what you want, give a few renovating ideas and follow up with a price. ABC Renovations, 123 Remodeling, and XYZ Renovations all think this is a nice renovation project and would like to take it on. All three renovators feel that price is going to be the most important factor in winning your project – so they all estimate it as low as possible to remain competitive. All three renovators give you their estimates free of charge. You choose to work with XYZ Renovations because their price was in the middle and you feel comfortable with them.
Moving forward to the home renovation in progress phase.
The contractors are in your house and you and our family are very unhappy. Your kitchen walls are open – nothing works, and work has begun in a bedroom next to the bathroom because they found a previous leak had rot the floors extending into the bedroom. The kitchen appliances you like are $2000 over the budget in the estimate. You can’t find any bathroom tiles that you like within the renovators allowance. It looks like tile you want is going to be $3000 over budget.
The renovator informs you that he can’t run the new plumbing in the bathroom where he thought they could as there were no plans available at the time of pricing and he needs to break up some concrete floor to reroute the plumbing to the location you wanted.
Being a modern kiwi family you figured that whilst you are doing the kitchen you should add some extra power outlets and upgrade the lighting in both the bathroom and kitchen, however the electrician advises that your old switchboard needs to be upgraded to cope with the new power demands. They didn’t price for that in the estimate as they never got to see the switchboard when estimating – they only quoted what was asked for from a vague plan assuming the switchboard was ok.
Your kitchen is torn up, the bathroom is a mess, you are working in areas you never anticipated and now you are $10,000 over budget with no end in sight. Everything you want to do seems to generate a variation that the renovator charges for because it was either not shown to them at the time of estimating, the budget you agreed to was lower than what you want installed, or there is difference between where you thought things should be, but are different on the plans you have just ordered from the council because nothing seems to be where it should. You will wish you had never started.
Estimating a project without plans, without specific guidelines/scope of works and materials specification can often lead to renovation headaches and budget blow outs.
Feasibility Study Example:
In this example, you still contact ABC Renovations, 123 Remodeling, and XYZ Renovations. After the initial chat to all 3 renovators, ABC Renovations suggests that based of the vague information and extent of works, you may be better to do a Feasibility Study/ Renovation Appraisal to make sure the project costs as right for your budgets. It will cost money to have an expert renovator come to your house come out and discuss your ideas. This would include looking for possible problems and less expensive ways to do the work – yet still do what you want done – or maybe provide different options . (At Trade Guys, we call this Adding Value to your Home).
During the meeting, the expert points out some concerns that could cost extra money – such as the plumbing locations and suggests obtaining your plans from council to see where the plumbing is before starting, looking at the switchboard to see if will handle the new electrical load, inspecting the rooms adjacent to the ones being renovated to check if there are any hints of potential issues. You share pictures of the types of tiles you want installed and also give details of the appliance you would like to have.
When ABC Renovations comes back to you a few weeks later with a Feasibility Study/Renovation Appraisal, you can see the project is coming in $10000 more than you thought. You can decide to not do the project, or you can adjust renovation budgets to get what you want.
By doing this you don’t have to be trapped into making decisions because the project has not started yet, and you don’t have to make decisions on the fly whist you don’t have a kitchen or bathroom to use because it’s all torn out. You’ re in complete control of what you will or will not spend. You can make informed decisions.
So why wouldn’t other Auckland Renovation Companies try to add value to your home? The answer really is simple – they offer you a cheap renovation as incentive to sign up, and once they have your home opened up and things are not working, you have very little choice but to spend more money. Why wouldn’t other renovators really try to find out what you really wanted? Perhaps they are afraid the price would scare you away? Why was there no incentive to minimize variations before the job started? Could it be that the variations were a way to make a lot more money on a renovation than what was estimated?
It has been our experience that a good Feasibility Study/Renovation Appraisal often leads homeowners to realize the true cost of renovating before they start.
If you would like to invest in a Renovation Appraisal please contact us or visit ‘Renovation Appraisal’ for more information