When you’re embarking on a home building journey, you’ll likely come across two terms early in the piece – estimate and quote. The two terms can be confusing as they refer to similar things, however it’s important to understand the clear differences between each. Education is key to a successful building journey after all.
Keep reading to learn more about building estimates and building quotes and how they will be used in your building project.
A Building Estimate
At the start of your build, you’ll still be finalising many details and honing your design into something that fulfills your requirements and desires. There are also a number of technical and bureaucratic elements to work out – such as council and development approval and organising soil and other land surveys. This is where an estimate comes in.
An estimate is a ballpark figure based on your rough plans and the kind of project you’re undertaking. This is used when the specifics are not yet known, and is based on the size, scale, style and proposed timeline of the build. While this rate may not be the exact amount you pay at the end of your build, it’s a helpful tool to understand how much your home may cost and whether it will remain in budget.
An estimate is generated by a builder, who will sit down with you and listen to your vision, requirements and any challenges. After this consultation, the builder will be able to provide a rough estimate of how much this type of home may cost. Armed with this estimate, you’ll be able to go away and decide if your budget is realistic and if there are any changes that need to be made in order to have your build delivered within budget and on time.
We recommend sourcing an estimate at the start of your project so you can have a robust understanding of costs and don’t waste money on plans for a home that isn’t feasible within your budget.
A BUILDING QUOTE
A quote on the other hand, is a detailed breakdown of every cost involved in your project and will usually require the services of the builder and estimator. While some builders will offer free quotes, you should be wary of these. A free quote is generally based on a square metre rate, which doesn’t factor in unique features or bespoke finishes. These quotes are rarely accurate and can cause your budget to blow out later down the track.
A fixed-price quote is what you should be seeking from your builder. This type of quote is extremely detailed and thorough, with the margin for any error and miscalculations far slimmer.
When you receive your quote, you should look out for prime cost items and provisional sum allowances, which are budget allocations made for services or materials when the price cannot be determined at that time. While builders sometimes need to make these provisions (particularly if you haven’t finalised all selections yet), too many should be cause for concern. For any PS and PC allocations that are included, you should ensure these are realistic and reasonable.