Building a new home is exciting, comparing building quotes though, not very much. With your home design finished and your plans and specifications prepared, quotes from different builders can tempt you to immediately look at the bottom line and choose the cheapest option, but when it comes to home building, that number is never the whole story.
As a Brisbane builder, we know that two quotes for what appears to be the same home can vary significantly, and there can be perfectly reasonable explanations for the difference. Different builders may make different assumptions about site conditions, materials, finishes, labour costs, site preparation and the overall scope of work. One builder’s quote may also include items that another has left out as an exclusion or covered with an allowance.
That is why learning how to compare building quotes properly is so important. Whether you’re building a custom home, working from a standard home design or planning on building or renovating, the right builder should be able to explain their pricing clearly and honestly.
What is a Building Quote?
Simply put, a building quote is a builder’s detailed estimate of what it will cost to complete the building work outlined for your project. It should give you a clear picture of the proposed cost and, importantly, what that cost covers.
Depending on the builder and the stage of your build, a building quote may include the home’s construction, materials, labour, site preparation, approvals, finishes, fixtures and other work required to complete the agreed scope. It may also identify items that aren’t included or that can’t yet be confirmed, such as certain site costs or provisional sums.
What Should a Building Quote Include?
A well-prepared builder quote typically includes:
- The work included in the scope of work
- Materials, finishes and fixtures included
- Allowances made
- Items that are provisional or subject to further investigation
- Specific exclusions
- Site-related work included
- Whether the quoted amount is intended to be a fixed price or may change
- Any assumptions the builder has made when preparing the quote
The level of detail can vary depending on the project and the stage you’re at. An early estimate won’t necessarily have the same certainty as a quote prepared after engineering, soil testing and other investigations. Which is why, when preparing or reviewing pricing for a new build, we don’t just look at the figure, we look at what is being provided with that number.
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Start With the Base Price But Don’t Stop There
When you first receive a builder quote, the base price is usually the first number you notice. And that’s perfectly fine, you need to know what your new build is likely to cost. But when you’re trying to compare builder quotes, the base price should be your starting point, not your deciding factor.
Base pricing can give you a quick sense of where different builders sit in the market and can help you spot quotes that are clearly outside your expected budget. However, you ought to remember that the number on the front page doesn’t tell you exactly what is behind it.
Check the Inclusions When Comparing Building Quotes
Once you’ve created a shortlist, it’s time to look closely at the list of inclusions. A good building quote should give you a reasonable understanding of what you’re actually paying for.
Look at the structural components, including the footing system, framing, insulation, external finishes, doors and windows. Then work through the internal elements such as flooring, kitchen cabinetry, benchtops, bathroom finishes, laundry, electrical work, plumbing, painting and fixtures.
Don’t be afraid to get specific. Quality finishes sound reassuring, but they don’t tell you very much. Do you know what product is being used? What level of finish, the size of the tile, and anything about the electrical points? The more clearly the specification is documented, the easier it is to compare quotes accurately.
As a builder, let me in you on a secret: this is exactly where some of the biggest disparities between quotes become obvious. A cheaper quote isn’t necessarily cheaper because the builder has found a more efficient way to construct your home. Sometimes it simply contains less.
Understand the Exclusions When Comparing Building Quotes
Unlike popular belief, an exclusion isn’t automatically a red flag. In residential building, there are costs that genuinely can’t be confirmed until the builder has more information about the site. Excavation, certain foundation requirements, retaining walls, service connections and some engineering requirements can depend heavily on your land.
However, knowing what has been excluded and whether that exclusion could apply to your project is still important. For example, if earthworks aren’t included and your block has difficult access or significant slope, that’s something you might want to understand before you commit. The same applies to drainage, retaining, power and water connections, stormwater, garages, decking, stairs, landscaping and other site-specific work.
Ask your builder to identify any exclusions that could create additional costs and, where possible, provide a realistic allowance. That gives you a much clearer picture of the potential cost of the build rather than leaving you to discover the gap later.
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Project Specific Quotes
The land you build on can have a major impact on the cost of your build. Once you’ve compared the basic inclusions and exclusions, the next question to ask is whether each builder has prepared a project-specific quote based on your actual site.
This is particularly important when building in Brisbane, and throughout QLD, where blocks can vary considerably in slope, access, soil conditions, drainage, services and other site requirements.
The Importance of Site Assessment
A good builder should understand the site before giving you confidence in the price. Depending on the project, this may involve considering a soil test, drainage, vegetation, engineering requirements and any relevant planning or construction requirements. These factors can influence everything from excavation and foundations to site preparation and the construction methods required.
For example, a relatively straightforward block may require minimal excavation, while building on a sloping site could require additional engineering, retaining, excavation or specialised construction work. Restricted access can also affect how materials are delivered and how builders work is carried out. While these aren’t necessarily problems, they are factors that need to be identified and priced appropriately.
Look for Allowances
At the quoting stage, there will sometimes be information that isn’t available yet. That’s pretty normal since your final engineering details, soil conditions, energy requirements or other technical information may still need to be confirmed. A responsible builder can make reasonable assumptions and include an appropriate allowance while clearly explaining what that allowance covers.
What you want to avoid is a quote that looks impressively low simply because uncertain items haven’t been accounted for at all. If something can’t be priced accurately yet, ask the builder why and how it has been treated in the quote. A realistic allowance gives you something to budget for, while a blank space simply leaves a question.
The Quote Should Reflect Your Project
This is one of the biggest differences between simply comparing quotes and properly assessing them. Your home design is only one part of the equation, the land, type of home, site requirements and scope of work all contribute to the cost of the build.
So when you compare builder quotes, don’t just ask, which builder is cheapest? Ask, which builder has made the most realistic assessment of what it will take to build this home on your block? That question can lead to a much more useful comparison, and help you avoid choosing a quote that looks attractive today but becomes considerably more expensive once construction begins.
How Many Builder Quotes Should You Get?
You might be thinking, well, this one’s obvious: the more the merrier, right? More quotes must mean a better chance of finding the best deal, no?
Not necessarily. For most homeowners, two quotes can provide a useful starting point, while three or four quotes will generally give you a broader understanding of the market without making the comparison unnecessarily complicated. However, you cross the limit, and the information can quickly become difficult to compare. Each builder may use different pricing structures and specifications, leaving you with more numbers but not necessarily more certainty.
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Focus on Quality, Not Quantity
Rather than sending your plans to every builder you can find, consider creating a list based on experience, reputation, communication, relevant projects and your initial conversations. Once you’ve created a proper sheet, give those builders the same plans and specifications wherever possible. With this, you have a much fairer basis for comparison.
If several builders are arriving at similar prices, that can give you a useful indication of the likely market cost for your project, but if one builder is significantly cheaper than the others, don’t automatically celebrate, instead get your hat Holmes, that’s when you investigate.
Be Cautious of the Unusually Cheap Quote
Throughout the guide, we have constantly flagged the idea of a cheap quote, but a cheaper quote can be completely legitimate as well. The materials required or used can vary significantly between builders, thus causing changes in prices. Where one quote is high and another low, it is completely justifiable, but if one quote is substantially lower than the others, it’s worth asking why.
We advise that you check whether the work and specifications are comparable and whether there are differences in allowances, provisional sums or exclusions. Often the lowest number is simply the result of a lower starting point that may increase as the project develops. Once again, the goal is not to find the cheapest builder but to find the best value for the scope, quality and level of certainty you need.
Don’t Turn Quoting Into a Competition
Always remember that preparing a detailed quote takes a considerable amount of time. A builder needs to review your plans, understand the project, assess the available information and work through the pricing.
If you’re approaching a long list of builders purely to see who can produce the lowest number, you may end up with a stack of quotes that aren’t genuinely comparable. Instead, choose a manageable number of builders you would actually feel comfortable working with.
A smaller number of well-prepared, project-specific quotes will usually tell you far more than a dozen headline prices. Choose a home builder that is impressive not just in the price they offer but also in services.
Comparing Building Quotes Practically
By now, you can probably see why comparing quotes isn’t as simple as finding the lowest number. The best way to compare builder quotes is to put each one through the same set of questions. Ultimately, you’re looking for differences in scope, specifications, allowances, exclusions and potential risk, not just differences in the total price.
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Compare the scope
Are all the builders pricing the same home and the same project scope? Check the plans, specifications and scope of work against each quote. If one builder has interpreted something differently, get it clarified before you make your decision.
Compare the inclusions
Look beyond the headline figure and check what is actually included. Compare the major structural elements, finishes, flooring, kitchen, bathrooms, electrical work, plumbing, painting and fixtures. If the quality or specification differs, factor that into the real cost.
Check the exclusions
Identify anything that has been left out of the quote. Ask whether those exclusions are relevant to your block and whether they could become additional costs later. Don’t assume an exclusion is a problem, but make sure you understand it.
Review allowances and provisional sums
Look at every allowance and provisional sum carefully. Ask why the amount has been used, how realistic it is and what happens if the actual cost is higher. The more uncertainty contained in a quote, the more carefully you should assess the potential final cost.
Consider your site costs
Make sure the builder has considered your actual site and any relevant site conditions. Depending on your land, this could include excavation, drainage, retaining, access, foundations, services or other site preparation. A quote based on your actual block is much more useful than a generic starting price.
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Look at the builder, not just the price
Ask yourself whether you trust the builder to deliver the project, since you will be working with them for a significant period, the relationship matters. Consider their experience, previous work, communication, reputation and knowledge of local residential building requirements.
Understand the contract price
Before signing, make sure you understand what the contract price covers and what circumstances could cause it to change. Review the terms and conditions, variation process, deposit requirements, timeframe and responsibilities of both parties.
Consider the overall value
Finally, step back and look at the complete picture. One quote may be slightly higher but include more, provide greater certainty and involve fewer allowances. Another may appear cheaper but leave more items unresolved. The right comparison should leave you able to answer one simple question: do I understand what this builder is going to build, what it will cost and what could cause that cost to change? If the answer is yes, you’re in a much stronger position to make an informed decision.
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The Cheapest Quote Isn’t Always the Cheapest Build
From our experience as home builders, we believe that a well-prepared quote should give you more than a competitive price. You should have a clear understanding of what your builder is proposing to build, what the contract price covers and where there may still be some uncertainty.
Ultimately, the best value is not about finding the smallest number. It’s about finding a builder whose price reflects the actual scope of your project and who is prepared to be clear about the costs, inclusions and responsibilities from the beginning.
If you’re looking to build your dream home, sign up for a free consultation now. Get in touch with us at Nice Builds, your Brisbane based home builder, for a transparent and healthy working relationship.
