The Truth About Choosing The Lowest Price

by Ryan Stannard | October 3, 2020

The Truth About Choosing The Lowest Price

How can you avoid the pitfalls of choosing the lowest price when selecting a builder?

Each builder has a different standard and range of inclusions which can make it hard to figure out what good value looks like. This may result in you simply picking the builder with the lowest price, leaving you at risk of going over budget or having a new home that doesn’t meet your expectations.

But when you take into consideration their inclusions properly, you will be able to understand exactly what each builder is offering. In fact, when you begin to dive deeper beyond the price quoted and review what is and isn’t included, you will be able to choose a builder based on quality and value.

Making an informed decision right at the start will undoubtedly lead to your new home being built in line with your expectations and budget.

According to the National Association of Home Builders, a typical new home goes 10.6% over budget and it can be even more if the builder hasn’t accounted for every aspect of the build. 

Lowest Quote Doesn’t Equal Lowest Price

Some builders will purposely submit a cheap quote with low provisional sums and very basic standard inclusions, just to win the work. They do this knowing that as the build progresses, they will be able to sting you with variations and additional charges to complete the build. So what you thought was the lowest price, will never, in fact, end up being the lowest price. 

The Truth About Choosing The Lowest PriceProfessional builders will ensure the quote includes everything you need to build your dream home with confidence. With a detailed list of inclusions and exclusions, professional builders enable you to clearly understand what the quote means so you can make informed choices. No nasty surprises and no hidden costs.

However, what tends to happen, is that people spend time gathering three quotes from different builders, and make a decision on price, without realising that not all quotes are equal. We see this happen time and time again because people believe that they are getting the same product from every builder.

When they compare prices, they believe that the builder charging more is simply ripping them off. The danger of being trapped by this myth is that you will end up paying more in the long run, not to mention the additional stress.

Just like buying a car, there are so many variables so it’s important that you understand exactly what you will be paying for. To help you make an informed choice, we have put together some pointers when choosing a builder.

Understand What’s Actually Included

The first tip when reviewing a quote is to do your due diligence and understand what each builder has included within their provisional sums and standard inclusions.

Be careful of those builders who have set very low provisional sums for completing key elements of your build. If they haven’t allowed enough to cover the labour to wire your house or connect your home to the mains, then you will be hit with additional charges to get your home up and running.

The Truth About Choosing The Lowest PriceA professional builder will ensure the quote includes everything you need without having to ask for more money to make your home livable. A professional builder will even tell you what’s not included, such as stormwater or landscaping.

The next thing you need to consider is whether their specifications and inclusions meet your expectations.

More often than not, customers get blindsided by an extensive list, without realising that the list is made up of generic cheap imports that are not built to last. However, when your inclusions list contains product makes and models, you can see exactly what you are getting. This allows you to clearly identify the quality of fixtures and fittings being installed in your home.

Remember, ensure this is all detailed in writing in the contract, because if it is not, then it’s not included.

Share Other Quotes With Your Preferred Builder

Finally, don’t be afraid to share the cheapest quote with another builder, particularly if you’re keen to work with them or if you prefer, don’t include the price so they can explain the differences. This exercise will allow them an opportunity to work through the specifications and inclusions with you.

Armed with this information, you can make an informed choice that goes beyond a dollar value but exposes the quality and standard of each builder.

You can learn more about how to confidently get started on the design process in the downloadable quick guide, The 7 Things You Need to Know Before You Designing Your New Home. It’s completely free, and it will help you stay on budget and avoid those builders who hit you with hidden charges.

Just click on the link below to download our guide.

Download Our Free Guide For Building In Adelaide