IT HAPPENED AGAIN: DISINFORMATION ABOUT BUILDING COSTS AND LETDOWN

Hello everybody.

I would like to share a kind of testimony about a situation is becomming unfortunately more and more usual nowadays. I published it first in the ARCR forums and I think it is important to share it once again.

The topic is about building costs and the expectations that an owner of a property in Costa Rica has about his/her project.

I will talk about a real case. I won´t share the name of the customer, in order to respect her privacy.

This lady, from North America, contacted me in order to give her a quotation about my professional fee for inspecting and maybe building her new house in the south of Costa Rica. The design and blueprints were done by another professional. Indeed, it is an architectural company.

When I gave her my first quotation, she thought it was not adequate according to her expectations, because she understood the price should be lower. After explaining her the reasons, because of the size of the house, its costs, the time for getting the house done, and the time for inspecting it, she realized we were talking about different budgets for the project.

She asked other builders to know about optional quotations and found out that two of them were offering a price three times the estimation given by her architect. The price I calculated was two and a half her first budget.

In conclusion, she realized her architect gave her a very very low estimation. Indeed, at the beggining, she asked to her architect for a 200 M2 (around 2153 sf) area house, but after discussing the project, the design was for a 340 M2 (3660 sf). She was, in her own words, inconsolable. The architect told her that kind of project would need an investment of 100 thousand USD. I commented it would be necessary from 230 to 250 thousand USD to get it done. So, her architect´s first price was not realistic.

In the case I am commenting, she understood that if she and her husband try to go ahead with this project the size it was designed, they would be at the 50% of the house building process and then they would have a huge problem, because they wouldn´t be able to finish the house and the only solution would be getting a loan they wouldn´t afford. Doing it at a retiring age, 60, would obligue them to work to the age of 80.

I understand, even she is upset and disappointed, she is reconsidering to do her project in a different way in a close future.

I think she was lucky to find out how problematic the situation would have been and she stopped the process in an appropriate time. But this is not the situation about other people.

I would like to know how a similar experience has been for other investors.

I think that certain builders, even some professionals like architects and engineers, are using a not ethical method to close a deal. These kinds of people are creating false expectations in the investors just for getting the job, without consideration to the problems their customers could face.

It is different when a professional gives numbers for real. Even it is discouraging sometimes, it is much better to have the feet on ground in order to go after a realistic project. Then, if the client decides to increase the size of his/her house, or if he/she asks for more expensive materials and finishes, or if the materials prices rise, it is reasonable to adjust the budget according to these factors, and the situation would be under control if the customer knows it just on time to make appropriate decisions.

One of the problems here is that, naturally, people is trusting in other people. It is good, but some irresponsible people are taking advantage of the well will of the investors.

What to do about this situation ?

In my opinion, first of all, ask for many different opinions about your project, about the size, prices, even you can ask for pre-quotations, in order to understand which costs are for real. Then, you can check it with a professional, discussing all the terms and factors involved, before makig a deal about a design. Once you have the design, ask again for quotations. Be careful about cheap quotations; usually, if you accept those kinds of offers, you should be prepare to invest the money to meet the average quotation. This piece of advice applies for buying properties, too.

In other words, be careful. Keep your dreams alive, but don´t take the apparently easy way without asking yourself how reliable that solution could be.

Good luck about this topic.