Easily Compare Building Quotes
Do you know the best strategy for comparing building quotes from different builders?
Unfortunately, many consumers get confused at this stage of the building process.
Deciding to design and build your dream home is exciting for most people, however it can be daunting if you don’t know the best way to choose the best quote. The process of choosing a builder can be challenging and overwhelming because there are many builders out there, and not all of them are professional.
Some builders will provide you with what they claim is a quote but really, it’s simply an estimate. This is because putting together a fixed price quote takes a lot of work and it’s far easier to simply insert allowances which allow the builder to charge more once construction commences.
Consumers often feel intimidated at this stage of the process because they don’t understand the terminology being used or the implications of agreeing to a price that includes provisional sums and prime cost items.
This leads to a process of getting multiple quotes from different builders and making a decision based on who has the lowest price. What tends to happen to consumers throughout this process is that the build takes longer and costs a lot more than even the highest quote in the tender, if the job gets finished at all!
Estimates Are Not Fixed Price Quotes
The truth is, many consumers (and even builders!) are still confused about the difference between a quote and an estimate. The terminology might sound similar, but when it comes to determining the price of a job, an “estimate” is very different to a fixed price quote.
Builders provide free estimates in order to provide a potential client with an indication of where the project is likely to be in terms of price. Because estimates are provided free of charge, the amount of time invested in producing them is very limited, which is why they are filled with allowances and often don't include all of the details on the plans.
The problem comes when estimates are treated as fixed price quotes.
Builders that provide ‘free quotes’ are only really providing free estimates and often they will intentionally use very basic inclusions and specifications in order to artificially lower the initial price. So, what may appear as the lowest ‘quote’, is really just a lower starting point which will increase throughout the construction as allowances are converted into hard costs.
Avoid Hidden Costs And Nasty Surprises
The truth is, when a builder offers you a free quote you need to proceed with caution. The reason is simple, providing a fixed price quote for a custom design is labour intensive and can take weeks of work to prepare, therefore it is not commercially viable for a company to provide them for free.
By the same token, it makes no sense to pay 3 different builders for a quote on your design, in order to see who comes in “cheapest”. Because the chances are that if you have not involved a builder in the design process then its more than likely that your project is over budget and will require a redesign in order to take out some of the cost.
The best solution is to do your research, talk to builders pre design, find one you like and then work with them from the beginning. They will then ensure that the design meets the budget rather than trying to get the budget to meet the design.
And when it’s time to quote that design, a professional builder will provide a fixed price quote that is all inclusive, with no hidden costs or nasty surprises.
There Are No Shortcuts In This Industry
Consulting a professional builder early in the piece and providing as much detail as possible about the plans for your design will enable your builder to advise you of a realistic price to build your dream home so you don’t waste your time designing a home that you cannot afford to build.
One easy way to identify an estimate that is being disguised as a quote is to look for the words “allowance” or “PC” which is a prime cost item or even “provisional sum” which is an allowance for labour and materials. If any of these words or phrases are listed in the price, you can be sure that you have been provided with a non binding estimate rather than a fixed price quote.
In most cases when you follow this strategy of getting multiple quotes from different builders, they know that the lowest price will win the contract because consumers are aware of what they are looking at which is why they do what they do.
However, there are no shortcuts in this industry, the price is the price and you’ll end up paying more in the end when you choose a builder with an artificially low starting price.
I can’t tell you how many people have come to me over the years after choosing what initially appears to be a cheaper quote from another builder saying “I wish we’d gone with you Ryan, it’s been a nightmare. We’ve ended up paying more than you quoted and we’re still not finished...
To avoid this happening to you, engage a professional builder from the very start and involve them in the design process.
It doesn’t matter if you are building your first home or if you have built many times before…
Designing a new home can be very overwhelming and when you hear new things for the first time, it's not easy to remember everything. So that’s why we’ve put together a quick guide for The 7 Things You Must Know Before Designing A New Home.
It’s completely free, and it will help you to keep your design on budget and avoid any nasty surprises that can sneak up on you when building a custom home.