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What is a Builders Margin-Nuts & Bolts with Builder Adam

What is a Builders Margin-Nuts & Bolts with Builder Adam

There is a lot of discussion at the moment about the value of a project builder over a customer builder in our Facebook Group Ask The Builder. One of the questions asked this week, was about the value of organising your own fixtures and fittings where you are able and does that really save money. I’ve asked Adam aka The Builder, to give us his opinion on this question.

Will you really save money organising your own fixtures and fittings when building or renovating with a builder.

First and foremost I should say that I am only speaking from the point of view of a customer builder. Project builders will rarely allow you to provide your own fixtures and fittings, except of course for items that can be installed after the house is complete, then your contract has ended and you are free to do as you wish.

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Most customer builders will welcome the pro-active client who will willingly organise and pay for their own fixtures and fittings. There is a large potential to save money as the home owner, by doing these things yourself. Builders run their businesses on a line of credit with suppliers and banks. Most items that go into the building and fitting out of your home, are put on accounts. In most cases this will mean the builder is only able to deal with the stores/people he has accounts with. In some cases this will mean the fixtures or fittings can be obtained elsewhere at a less expensive price.

Keep in mind, the builder whether custom or project, will have a higher stock turn and therefore their prices from those suppliers they regularly deal with, will be less expensive than you the home owner is able to obtain them for. However if you wish to purchase from other suppliers, then the potential to save money is there.

Another reason this will save you money, is the Builders Margin. What is a builders margin…….it is a percentage that is added on top of specialty fixtures or fittings purchased on the clients behalf. This excludes anything within the contract. Say for example, you are given a PC allowance for your oven of $1000, but the one you really, really want is $2000, the builder is allowed and within his or her right, to charge you the extra $1000 with the builders margin on top.

The question in our Facebook group was based around carpet and blinds, and these too would be usually subject to the builders margin. The builders margin is allowable to cover the administration costs involved with handling that item, though not a large percentage, it is payable by you, where a little hard work may save you that fee.

Adam.

Thanks Adam for that look into the builders margin, but most of all thank you for helping our readers save their precious money.

Have you heard of a builder margin? Do you think sourcing your own fixtures and fittings is something you’d like to do?

Nicole xxx

 

 

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3 Comments

  1. Clients often complain about the builders margin but it is necessary. A lot of clients also misunderstand about a pc sum too. Great insight Adam.

  2. Our builder is applying a builders margin on the TOTAL cost of the house – after reading your article, and a DOmain article on Builders Margins – this is not correct – is it ? He has provided us with both provisional and prime cost list and we are mostly within or under these estimates. We do have a few items that have gone over but not by much…

    1. Hi Jacquie, did you get my email?

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