So, you’ve met with a few builders, you have discussed what you want to achieve in your building work, and you have listed all the items that you want included in your quote. You are now anxiously waiting for all the quotes to arrive, so you can decide which builder to hire. This article tackles the issues and pitfalls about getting a quote from a builder (or a few builders if you are aiming to compare quotes). You may also like to read my related article ‘How to choose the right builder for your custom home’.
I have prepared a checklist below to help you protect yourself, and make sure you make a well informed decision.
Beware of dodgy builders!
If you think that by providing a few builders with a set of plans and a list of inclusions, that you will end up with fairly similar quotes, you are in for a big surprise! There is no standard method for builders to prepare quotes (and unfortunately for the homeowner, there are no rules and regulations regarding the presentation of the information.) So what that means for you is potential confusion and the real possibility of getting less than what you have paid for. In essence a builder can list all the inclusions you have requested, and submit an entirely unfeasible price, without any legal ramifications at all. This is unfortunately all too common in our industry. So be prepared to get quotes from the builders that vary (often considerably) in dollar amounts. Also be prepared for quotes that vary in length from a few lines to many pages. You probably already know that choosing the cheapest builder will drastically increase your risk of things going wrong. You perhaps have already decided that your peace of mind and ensuring the safety of your family, by using a reputable, honest builder, far outweighs any minor cost-savings. However, how do you ensure you aren’t getting ripped off?
It’s the little details that are vital.
Be wary of any quotes that are unclear about what is included or that are lacking in detail. When getting a quote from a builder, insist on the inclusions being detailed. After all, you won’t be able to compare builders’ quotes and select the right builder, if you aren’t provided with all the information (that doesn’t mean an itemised price for each component; a fully itemised quote is rarely necessary so expect to pay for this if you require it). Ensure that you read the specifics of the quotation carefully, and that you are comparing ‘apples with apples’, in the key areas such as quality of fixtures and fittings, materials and extent of work. If other quotes specify different items, e.g. type of skirting or cornices, ask for clarification about what has been included, and educate yourself as to which is the better option.
Educate yourself regarding the materials used, and make sure you understand what each builder is going to include. If a building quote includes for example, 100mm foam render board, compared to 75mm, there are obviously benefits to using the more expensive or better quality material. Explore what those benefits are, as they may save you time and money in the long run, or they may have lower maintenance advantages.
Also, be wary of ‘bulk concrete’ costs in the quote, as any builder who quotes this way, is protecting themselves at your expense. This is a sneaky way of adding an exclusion without you even realising it!
Determine which of the builders’ quotes most closely matches your brief. This builder is the one who has listened most attentively to you, during the initial meetings, and is highly likely to do the same during construction.
What you need to know about Prime Cost (PC) allowances.
These are allowances within the quote, which enable the homeowner flexibility in selecting certain items, usually fixtures, tiles or cabinetwork. They are commonly used if the homeowner has not made selections for these items in the brief. Or they can be used if the extent of work cannot be ascertained until work has commenced. Allowances should never be used for basic items like frames, trusses, roofing etc. Ensure that if allowances are included in a quote that each builder has allowed for the same amount. Any variance in allowances can make the ‘cheapest’ quote, much more expensive in the long run.
This example is how a competitor of ours recently quoted and appeared to be the cheapest, but when properly analysed was actually more expensive:
Builder A quotes $220k which includes PC allowances for kitchen cabinetry of $25k (quote for the rest of the job is $195k)
Builder B quotes $210k which includes PC allowances for kitchen cabinetry of $10k (quote for the rest of the job is $200k)
So at first glance Builder B ‘appears’ to be charging less, however Builder A is including actually including more.
When cheaper is actually more expensive!
Be aware that a cheaper price may indicate poor workmanship, inferior materials or lack of experience in the industry. At best it may be an early warning sign that corners will be cut; regarding site safety, which is a concern not only for the tradespeople, but also for you and your family. The worst case scenario would be a builder who has slashed his price so viciously that he is unable to complete the work for the quoted price. We have been contacted many times by homeowners who selected the cheapest builder, only to find the builder went bankrupt and left them with a partially completed home. Be assured that most builders have a similar ‘buying power’ for materials, and variations in pricing are most commonly due to the calibre of the professionals used and the inclusions/exclusions. A cheaper price is usually not a ‘bargain’, but an indication that you will be getting less of something in your job. For your peace of mind you must find what you are getting less of, and decide if this is acceptable to you.
If you find a significant difference in the quotes presented to you, there is always a good reason why. For this reason we offer our clients free advice on what to look for when getting a quote from a builder. Feel free to call me on 03 9776 7101 if you would like to chat about builders quotes.