Why should you be wary of free quotes when you are looking for a Gold Coast or Sunshine Coast Builder?
Did you know the average building company only lasts 3.6 years? This should concern you if you are planning on building your dream home soon.
If you are thinking of building your new home, you’re probably feeling excited, energised and a little nervous about everything that lies ahead.
For most families, their home is their biggest asset, which means, when you get to the quoting and pricing stage of your project, you want to make sure to take your time and not to rush your decisions.
Simply getting a few quotes and choosing the cheapest price is fine if you are building a deck. But when it comes to building a new home, there is a lot more to it, and you run the risk of being taken for a ride.
In this video, you’ll discover why you need to be wary of any builders offering ‘free’ quotes.
The first thing you need to understand is the difference between a quote and an estimate. This can often catch people out, and it doesn’t help when builders themselves use these terms pretty loosely.
Step 1 Is To Always Start With An Estimate
An estimate is exactly that, a rough, ballpark figure to build your home based off your simple criteria.
You haven’t made the decision to build a new home overnight, so chances are you already know roughly what you want – 4 bedrooms, open plan, single story, 2 bathrooms, a 2 car garage and a swimming pool for the kids would be nice too.
You might even have your budget in mind as well, this is extremely helpful for a builder to know. It helps them plan the home you want within a budget you can afford.
Armed with all of that, getting the estimate is pretty straight forward, you give a builder your pre-requisites and he gives you a rough price. From there you can tell if what you want is roughly within your budget.
Estimates are normally free because they don’t require exact costs for every material and fitting. Because of this, estimates are pretty worthless down the track due to no detailed work or actual planning being done.
Getting a quote on the other hand is a completely different process, and when free quotes are being thrown around you need to be much more cautious. ‘Free’ quotes nearly always end up costing you more.
Creating a detailed and accurate quote should take a builder more than 50 hours to complete. A comprehensive quote is very labour intensive and involves professional estimators, getting quotes from suppliers and subcontractors and putting together a complete job schedule for the entire build.
50 or so hours of work for a builder can run up a cost of thousands of dollars!
So when hiring a professional builder for your new home, the quote should NEVER be free. A nominal fee should always be charged for their time to provide you with a complete quote.
Builders offering free quotes often rush their process and miss out on important details, which ends up costing you more later on.
So remember, step 1 is to always ask for an initial estimate before you get a quote to see if your home is within your budget.
The easiest way for you to tell the difference between an estimate and a quote is the length of the document.
How Many Pages Should Your Quote Be?
An estimate is generally only a single page, it has only minimal information because it really only needs to show you if your new home is within reach.
On the other hand a detailed quote should be between 25 – 40 pages long and should include specific details for every aspect of the build, it can even include working drawings of your new home. A quote should list for both you and the builder the amount of materials, labor and even the time needed to finish 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 red flag. These are just estimated allowances and so down the road, they can endup 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.
Finally, building custom homes and completing large scale renovations is a complex job. It’s tough and low margin for builders. If a builder has enough spare time to offer you a free quote, their time and services are obviously not in demand, so be cautious.
Usually these are the builders who are so desperate for cash they will offer you anything free in the beginning just to get your business. Once they have your signature though, they will make up the shortfall by charging you more on everything else later on.
Professional builders should already know what their admin costs are and charge appropriately for all of their services. Not just the building contract, but drawings, preliminary building agreements, detailed quotes, soil tests and more.
A builder that charges for their services from the outset has already covered their costs, so they are unlikely to inflate your contract price.
What You Should Know
Those builders that are working for free 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 or renovations specialists offering you a ‘free’ detailed quote.
It really all comes down to simply doing your research and choose the most professional builder you can find.
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