Thread: What is Builder's Target/Fair Margin?

When I got all the quotes for my house, there were some quite big differences

I asked around and was advised to reject the cheapest guy; he was totally unable to cope with building a house, it would be a first for him. That would mean hours of extra supervision and stress levels would be high

The next two were fairly close; both were experienced and their customers fairly happy. What made me choose one guy over the other was that I could relate to him and feel comfortable more than the other guy.

That decision seems to have been correct as he goes the extra mile to be helpful and make life easy. The quality of work is just as important to him as to us

interesting

You are wrong. That is a normal range in Thailand for PROFIT only. Has nothing to do with quality of construction. The plans and specifications provide the paramaters for quality and construction supervision monitors the implementation of the design. I work in the design profession here in Thailand and we employ people who forecasts construction costs every day. I don't know where you gained your wealth of experience but it sure aint Thailand.[/quote]

Thanks Splitlid

Some of what he says is fair comment but he is mixing up the way profit is made up on a BOQ. I think he are missing something or maybe we are talking at cross ends. If you read a bill of quantity correctly : 15% is the net not the Gross. Actual profit is 15% normally but that is not the whole profit. NOT just the money they get. One must not forget the other 15-20% for the other part that makes up the profit. The miscealaneous costs that are added before the net profit and after all construction labour and material costs on the bill of quantity. What is referred to as the management and running of the job., expenses etc. This is normally 10-20%. Total profit is nearer 30-40%. And so they should get it too.

The builder takes on the largest part of the responsibility and has the biggest task to deal with.

This is a good opportunity to offer people good advice that can help them.

My advice to anyone building in Thailand: If it helps you I am very happy. It is only meant to be helpful to people so they avoid some of the many pitfalls that can occur in building a home anywhere in the world. These are simple guidelines that will and can help you. It is mainly for people who are building near city centres or main tourist areas such as Bangkok, Chiang Mai, Phuket, Pattaya, Hua Hin, Cha am, Ko Samui etc where you can chose to use a professional registered company. This could hopefully save you alot of money and problems

NOTE: If you are building up country then naturally this may not be applicable as there are many local builders who work as partnerships or from home. That is a different situation and some of them do great work and are good people.

1. Make sure it is a registered company with an office to visit and been in business for atleast 5 years.

2. Make sure they can show you several homes they have built or/and you can speak or write to at least one of the customers. If it means you travelling to see those homes, travel for sure.

3. Ask for testimonials.

4. Only go with a company that has a person who has atleast 10-20 years experience in construction; who will be available every day for e-mails, chats and communication. If you don't speak fluent Thai that person must speak fluent English or your native language.

5. Do they provide any form of insurance on the project during construction ?

6. Do they provide a 10-15 page comprehensive legal contract in English and/or Thai based on the rule of law and with attachments that include a full materials list and a guarantee.

7. Make sure you have a completed set of architectural drawings signed by a licened Thai architect and engineer ?

8. Do they have a nice web site and good PR. This is the basics of a professional business and shows they care about their business and want to do well. It means they are serious which is what anyone wants if they are paying for a home to be built. No office stay well clear. Unless you are on a very limited budget and are building up country and have no choice.

9. Are they available every day to answer e-mails, phone calls and have meetings when you require. The sure sign of a lazy and don't care attitude is not answering e-mails and not showing regular responsive interest in you and your project. How can you build a house that normally takes anywhere from 6-14 months if you can't regularly communicate and they don't respond efficiently to e-mails. The builder must show enthusaism and interest to build your home and in the actually building of it, not just getting the job. If they are willing to work with you and the architect in the beginning (without a construction contract in place yet) it shows they are serious and with a positive desire to help you and build your home. Stick with them.

Stay well away from builders you can not get on the phone and do not answer e-mails in reasonable time. It will be reflected in their building work and simply shows they are not serious about looking after you.

10. Don't listen to would be experts who can show you no homes they have built without atleast 5 years in the industry in some capacity. Track record is very important. I repeat : Make sure at least one person who you deal with and is overseeing your build, has 10-20 years construction experience. They are out there so why not use the better companies and people.

As I say if you are on a limited budget and building up country then naturally you can't expect offices, companies and the such. Check with the locals as there is always a good builder there.

Good luck and if you do the correct due diligence and preparatory work before, you will avoid so much hassle, problems, lost money and actually enjoy having a home built. The results speak for themselves. All the very best with your home builds. Hope this helps you From a A retired old builder who is just trying to offer some helpful tips