Contractor Writing Estimate

March 21, 2019

A wise friend of mine once told me a saying that resonated with me ever since. I use it regularly in relation to many aspects of life as it is true in so many situations. "If you pay peanuts, you get monkeys". This is a brilliant analogy and rings true when thinking about constructing one's dream home or large-scale multi-unit developments. So, what happens when you do not even pay peanuts? You attract below par building quotes from sub-standard builders, this often lends to hazardous building contracts and avoidable cost blow outs.

It has been, at times, a real gripe to my potential customers. A lot of people looking to build seem to have significant cognitive dissonance at the thought of paying potential builders for what they seem to think should be an "obligation free quote". When I explain that by charging for our building quotes we are protecting them from potential cost blowouts during construction, they mostly become both curious and eager to hear my explanation.

In truth many quality builders are now charging for quotes to build their potential home of their dreams or development and this is fast becoming the rule rather than the exception. There are many reasons for this which include the following:

  • It provides the builder the opportunity to seek trade coverage for you. Trade coverage means going out to their sub-contractors. Many sub-contractors now also charge for their time to price their work and this allows the builder the ability to seek these quotes providing certainty around each aspect of the project. If builders don't charge for quotes they are going to be reluctant to approach their trade base as there is nothing in it for these sub-contractors.
  • As we detail in our FAQ document to you (contact us today and we can send this to you), for a quote to be meaningful, it has to be accurate, and contain clear and detailed information for both parties. An accurate quote takes a significant amount of time and money to prepare as each project is different in scope and site conditions. It is easy to get a free quote, but those builders will not want to spend the time or effort. They will apply a "square meterage rate" or low ball the quote and make up their margin by lowering standards, safety, customer service or adding extras during the build. Too often the owner engages the lowest quoted cost builder because it is hard to understand the quote. What sounds like a good deal in the beginning can end up costlier for you and your project, failing to meet your hopes and expectations for your project.
  • A paid service allows the builder to spend more time to investigate deeper. With a paid for quote, the builder should approach an experienced estimator. It is the role of the full-time estimator to get their work to be as accurate as possible. This tends to be a result of many years of experience and expertise. At Milara Building and Development we have one of the best estimators in the country whose sole focus is to estimate our projects. This removes the risk for us as the builder, but more importantly this reduces the risk from you having to witness significant cost blow outs and unexpected building variations that you haven't budgeted for.
  • Still don't believe us? The biggest building industry leader and influencer in the country weighed in on this debate and stated a scary statistic in a realestate.com article. "A 'free quote' from a builder only has a 20% chance of being accurate" Wouldn't it be a shame if you were one of the 80% that were to be blindsided and end up with a build cost far in excess of the contract value and your budget?
  • Any doubts left? The average builder only lasts 3.6years. Only 3.6 years. Every builder has a legal requirement to provide a 10-year structural guarantee. So the question is, who guarantees your home long after the builder you selected with the cheapest quote goes bankrupt because he underquoted and doesn't have any money to complete your project, or completes it to a poor standard? Insurance may help but this is a process that you do not want to go down and rarely covers the actual cost to fix many structural aspects. Not to mention the emotional toll. Don't make the mistake of putting your money in the hands of an amateur.

So the question you are probably asking yourself at this point is how much are some of these builders now charging potential clients for a detailed quote? You can expect that depending on the works being completed builders are now charging anywhere from $300 to $1500 for a quote. This is the range we have quoted to date and really does depend on this size of your project and the level of detail required. At Milara, we also fully refund you your nominal fee should you decide to build with us.

In summary, builders charging for quotes is not a new practice with more and more responsible builders now beginning to charge nominal fees. Whilst many builders still provide a "free" quotation", consumers need to be mindful that this often is formed loosely and without effort and mostly likely with a vague and dangerous square metre rate. It is little wonder that within our industry builders don't last long. This often lends both the builder and the client in a scary and unwanted predicament. However, when a builder charges a nominal fee you can more assured that he is committed to your project and will commit all his resources into forming an accurate fixed price. Your home or investment project is most likely the biggest investment one will make it pays itself to be diligent from the beginning to save yourself from nasty expensive pitfalls down the track during construction. Don't risk your future and always choose a quality, professional and transparent builder over the lowest priced quote.

Looking for a fixed price quotation for your custom home or townhouse project? Contact Milara Building and development today.