Why You Shouldn’t Go for a “Per Square Feet” Rate for Your Construction

“What is your per square feet rate?”

It’s the usual question anyone who wants to build a home first asks a builder/contractor. I will now explain it to you why it is a bad idea to ask square feet rate for your project.

In addition, price per square foot will be lower for larger houses if you consider the same specification for both houses. Why is that?

Consider a 2,000 sq.ft home that has two bedrooms and one bathroom and another 2,000 sq.ft home with three bedrooms and two baths. The cost for both these buildings will be different as the latter has more walls, electrical fittings, sanitary fittings etc than the former one. Therefore, it’s not practical using the square foot formula and it won’t give you the correct rate.

Then what else should you do?

Ask for a detailed BOQ (Bill of Quantity) with brand, model and quantity of each and every item used for the construction of your building. Every specification and every brand has so many types and models in which price vary from budget/standard/premium/luxury. If contractor doesn’t provide BOQ then you won’t be able to know what you are going to get for the amount which you are going to pay. It totally depends on one’s perspective of space and amenities needed.

If the BOQ is not there…

Then the contractor/vendor will need to quote it on the basis of guesswork. It’s common nowadays that the guesswork goes wrong and contractor comes to know about that by the final stage of the project. Then either they ask you, the house owner to provide more money or you will have to adjust with the quality of work to save money or finish the construction within your budget.

Price ceiling in square foot rate agreements

Putting price ceiling for bathroom fittings, tiles, electrical fittings etc is another major problem for you in these type of agreements. For example, if the contractor intimates you that the western closet in your per square feet agreement is worth INR 8,000 and you are unaware of normal market rate and agreed to that. After starting work when you went to select the original material and came to know that the closet which you like is more than INR 15,000 the whole budget will change for each bathroom. This happens widely and most cases you will overshoot your budget one way or another.

Structural drawings and square feet rate

We have discussed about 2000 sq.ft homes with two and three bedrooms. And how the cost varies due to the number of walls and pillars. This is because many of the current square feet agreements doesn’t consider the structural engineering aspect of your building. The house you see in render will be having lesser number of pillars than the actual one you have built. This is a usual mistake when choosing a square foot agreement rather than going with BoQ based on structural drawings.

Eliminations and additions you have to pay

Normally contractors who advocate per square foot charge omit water proofing, anti-termite treatment kind of activities in their construction cost. Also, there is high chance compound wall, fabrication works, gate etc is also excluded. These are activities that you have to do on your home eventually, but gives a miss while comparing for square foot rates in the market. It does cost your pocket anyhow, why not do it in the right way.

BoQ doesn’t allow guesswork

It provides you with detailed information which are necessary in smooth running of a project. It contains preliminary description of all task with comprehensive list of the materials used. Thus, it gives clear idea to the contractor to accomplish task thus saves money for both contractor and client. 

What do I mean by a detailed BoQ?

BoQ is a schedule which categorize, details and quantifies the materials and other cost items to be used in construction project. It defines the extent of the work. 

With a detailed BoQ and checklist there is less chance for construction activities missing. It is important to know that; direct costs & indirect costs are to be considered for complete cost of the project which are covered in different parts of the BoQ. The BoQ would specify the quantity of the material required, the specific quality of the material along with all other details relating to the material. This would give a complete picture of the material needed for the work and this also helps the contractor to quote better.

• It also helps you to compare the rate quoted by different contractors.
• Helps to make a cost analysis by adding up overheads and other unforeseen expenses.
• Helps you to anticipate the cash flows for the project based on the budget.
• It will act as an essential tool in management of your project schedule. If material is available on time, work will speed up. Time is money, the faster you finish the project the more profit you get.

The traditional way of asking per square feet agreements is still prevalent in the market. It is one reason why we cannot standardize and organize construction like a manufacturing process. Asking for BoQ is the initial step to standardizing your project. And making sure you experience a hassle free construction experience. Since BoQ makes your construction activity transparent. Thus chances of corrupt practices are very less.

Do you agree? Share your thoughts below.