For most builders, during the time it takes to sell, contract and construct a new home or dwelling, various components of the costs will increase at various times during that period. Some price changes are at an agreed rate and time period which is decided during a negotiated contract. Other price changes can occur at times without any warning such as a carpenter advising his prices are going to increase on 1 Jan next year or a tiler advising his prices are going to increase on 1 March next year.
Most quotes supplied by suppliers are only valid for 30 days and will need to be confirmed at the time of ordering. In most cases the prices will have changed by the time the materials are ordered. When prices increase during the construction period, the increase in the costs is an erosion of the profit margin made by any builder. The ‘smart’ builders will build in an allowance for this cost movement. But how do you calculate what allowance to make?
The CMA Calculator takes the guess work out of the process and enables you as the builder to keep on top of the price movement and take steps to negotiate lower increases if you know what the effects are on your selling prices.