Why You Should Be Wary Of Builders Offering ‘Free’ Quotes

Sharing building quote with clients

Did you know the average Home Builder is only in business for 3.6 years? That’s a scary fact if you are planning on building your dream home soon.

 

Just thinking about building can bring about many different emotions. It can make you excited and energised… Meanwhile creating a surge of anxiety about what is involved with building your new home.

For most people, their home is their biggest asset, so when you are at the quoting and pricing stage of your project, make sure you don’t move too quickly. Gathering several quotes and then going with the lowest price is a solid strategy if you’re building a deck, but when it involves building a new home, you could get taken for a ride…

In this article, you’ll learn exactly why you should be wary of builders offering ‘free’ quotes.

The Difference Between a Quote and an Estimate

 

Building colours plans design quote

The first thing to understand is the difference between a quote and an estimate. Even among builders themselves, this term gets used pretty loosely.

Step one is always to start with the estimate. You have probably been thinking and planning out your dream home for some time. You know you want 4 bedrooms, 3 bathrooms, a 2 car garage and a swimming pool for the kids would be nice too. Maybe you even have a budget in mind which is extremely helpful for a builder to know, so they can plan the home you want.

Armed with all of that, getting the estimate is really just confirming that what you want is roughly within your budget. It’s the starting point in your building process. Estimates are ballpark figures based on your criteria. They don’t require the builder to go away and calculate every material and fitting. Estimates don’t usually cost you anything and are generally worthless as no detailed work or planning has begun.

It’s when a free quote is being thrown around out there and offered to you that you need to be cautious. In most cases, free almost always ends up costing you more.

Creating a detailed (and correct!) quote is a time-consuming process for a builder, often taking more than 50 hours to put together. A quote for your new home involves professional estimators, contacting subcontractors for quotes and creating a lengthy and detailed job schedule. This easily runs up a cost to the builder of several thousand dollars.

It’s for this reason that a full quote from a professional builder should never be free. A nominal fee is charged for their time to provide you with a detailed quote for your project. Builders offering free quotes often rush their process and miss out incredibly important details for your home. Remember that step 1 is to work with a builder and ask for an initial estimate to see if your project can be built within your budget.

 

The Problem With a 1 Page Quote

1 page building quote

 

One way you can tell if you are getting an estimate instead of a quote, is by how long the actual document you receive is. A one-page estimate is fairly standard, and can easily include all of the necessary information to let you know if your new home is within reach.

A detailed quote however, should be between 25-40 pages and specify every inclusion and can even reference working drawings of your project. A quote details for you and the builder, the amount of materials and labour for the duration of your project.

Some builders will cut corners and leave out specifics and instead include Provisional Sums (PS’s) and Prime Cost Items (PC’s). If you see either of these on your document it should raise a flag. These are just estimated allowances and so down the road, they can end up costing you significantly more once the real values are known. This is a dead giveaway the builder saved time and gave you an estimate rather than a detailed quote.

If you are working with a preferred builder on a quote for your new home, make sure you ask for a copy of the job schedule. This will show you if the builder has quoted the job or guesstimated it.

 

Builders Working for Free

 

Men at work building house

Building custom homes and completing large-scale renovations on your family home is a tricky job. It’s tough and a low margin for the builders. Any builder that has free time to offer you a free quote on your project is obviously not in demand, so be wary. These guys are desperate for the cash so they offer you everything free in the beginning to get your business, but will charge you interest on everything later on during your contract.

Professional builders are aware of their admin costs and charge appropriately for all of their services, not just the building contract but for drawings, preliminary building agreements, detailed quotes, soil test and more. A builder that charges appropriately for their services from the outset has already covered their costs and so are unlikely to inflate your contract price.

Builders working for free, on the other hand, are hoping to win 1 in every 10 that come around so they recoup their losses on those other 9 by inflating your contract price.

Always be wary of custom home builders offering you a ‘free’ quote. Make sure you do your homework and choose the most professional builder you can find.

Remember, better information leads to better decisions. Make sure you’re informed with the right information before you start your search for a builder and download the 7 Things You Must Know Before Designing A New Home by clicking on the link below.

 

Download 7 Things You Must Know Before Designing A New Home

 

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