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Building Estimates and Quotes – What you need to Know

At Kit Markin Homes we pride ourselves on openness and transparency and giving our customers the very best service possible. 
As part of this commitment to our customers we provide a 10 Point Building Guarantee for every job we undertake. Points 5,6, 9 and 10 all deal with factors relating to building quotes and agreements. So for this blog we wanted to take a little extra time to explain what is involved in building estimates and quotes and what you can expect from our 10 point guarantee of quality. 
Many homeowners will want to know if they can afford a new build or renovation project before proceeding with full plans, consents and the more detailed parts of the planning stage.  Most people start by asking for an estimate. 
While a builder is not bound by an estimate, it is commonly expected that the estimated cost will be within 10–15% of the final cost, provided there is sufficient information given to the builder. If you have only rough conceptual drawings, you need to be aware that an accurate estimate will be difficult to make. 
It is important to know that an estimate is not a firm offer to do the job at that price, but it should be a realistic guess. An estimate can be useful if you want a rough idea of cost. Once you get an estimate and decide to use that particular builder or building company, you should then get a proper quote in writing. 
A quote is a legally binding offer to do your building project for a certain price. Quotes are generally sought once you have the detailed designs of your build – there has to be sufficient detail to build a quote on. 
Once you have accepted a building quote, a legally binding contract has been formed, and the builder cannot charge more than allowed for in the quote.
A quote should be in writing and should include:
  • the scope of the job to be done
  • the time it will take to complete the job
  • the materials to be used
  • the hourly labour rate (including the rates of sub-contractors)
  • the type of contract, for example, full contract or labour only
  • whether the quoted sum includes GST – If the quote does not include GST this must be stated, otherwise you would be entitled to assume GST is included in the amount quoted.
  • a contingent sum for the unexpected.
It is wise that there are some protections built into the quote, for example, by allowing for fluctuations if there are increases in the cost of materials, labour or other matters outside the builder’s reasonable control. 
If unexpected additional work is required, the quote may say that this will be charged for at a given hourly rate or that a new quote for the additional work will be provided. 
Make sure you are clear about what work needs to be done (sometimes a note book containing all your questions will make sure you leave nothing out) and when you need it to be done by. You would expect your builder to make a careful site inspection and also to meet with you to make sure they understand exactly what you want and have a good background knowledge for the quote. 
If you get multiple quotes from different builders for your job, make sure you are comparing ‘apples with apples’. 
If the quoted prices vary a lot it’s worth asking the builders about this so you know why – one builder might quote more than another because they will be using higher-quality materials, or are more realistic about how long it will take to do the work. If you accept the lowest quote without understanding why, you may be up for some surprises during the build. 
While architects do their best to give you a ball-park figure for their designs, sending the plans through to the builder to price up may provide you with a more accurate price. Working with up-to-date pricing for materials the builder is often more aware of current prices of materials.
Make sure that you get the quote in writing. You should not need to pay a huge deposit or the price for the completed job up front, it is wiser to pay as you go through the build to make sure the work you are receiving is in-line with the payments you are making.
Kit Markin Homes provides free, no obligation quotes, that are comprehensive and contain no hidden costs. We would love to bring your dreams to life and look froward to making the process as enjoyable and stress free as possible.