Quote vs Estimate – What’s the difference?


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

For most people, their home is their biggest asset, therefore 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 the normal thing to do if you are 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, is very Clear

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

Step one is always to start with an 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 exactly how you want it.

Loaded 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.

Click here to find out The 7 Things you must ask before signing your building contract

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 down the track.

Creating a detailed 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, contracting subcontractors for quotes and creating a lengthy and detailed job schedule. This easily runs up a cost of the builder by 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.

Find Out More

The Problem With a 1 Page Quote, It is Not Accurate

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 had a guess at it.

Click Here For More Helpful Information

Builders Working for Free are not in Demand


This is a handyman, not a professional builder.

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.

Click here to find out The 7 Things you must ask before signing your building contract

Avatar photo

Norm Wales

Norm’s discipline continued as he excelled in his trade, gaining valuable experience that enabled him to begin his own building company. With a philosophy of constant improvement, Norm developed processes for every aspect of his business.
Scroll to Top
Call Now Button