What’s the difference between a quote and an estimate?
If you’ve had any experience dealing with the world of construction, you’ve probably heard the terms “estimate” and “quote” being used. However, most people don’t really know the difference between these two expressions, including many builders! In this post, I will give a thorough overview of what these two commonly used terns mean, so you can be sure you’re getting the right information at the most appropriate times during your renovation or extension project.
In short, an estimate is a rough costing of your renovation or extension work, given in the earliest stages of the project. It can be incredibly useful to have before your plans are drawn up because it will help identify what can be achieved within your available budget.
Conversely, a quote is an accurate, fixed price. It can only be calculated closer to the commencement of the build, once a lot more decisions have been made relating to the specifics of the construction.
The reason for these two different approaches to costing is because it’s difficult to gauge how much a renovation or extension will ultimately cost without knowing specific details about what is involved. For instance, potential costs can vary greatly depending on factors including style, size, complexity, timeframe and quality.
What is an estimate?
Getting an estimate tends to be one of the very first steps in the construction process. It’s a ballpark figure of what your project is likely to cost. Your builder will work this out based on the answers to various questions about what you have planned. It does not necessarily reflect what you will ultimately pay on completion. Despite this, it is an incredibly useful tool to have, for reasons I will explain later.
How do I get an estimate?
The best way to kick-start the process of getting an estimate is to book a consultation with your builder. By discussing your distinct vision, requirements and goals, they should be able to give you a rough indication of the amount you should expect to spend for the results you want. Armed with this information, you’ll be ready to start determining whether your plans are realistic within the available budget, or whether to look at modifying your plans to bring the total cost down.
I would strongly advise anybody planning any construction project not to skip this crucial step. It provides a great wealth of valuable information that will help you make lots of crucial decisions about your project in the early stages.
For a start, by knowing whether you can afford what you are planning BEFORE you spend thousands of dollars on the necessary drawings, plans and permits, you could end up saving a lot of money in the long run! It will help you make educated decisions about whether you can afford to install that swimming pool, add that extra bedroom, opt for full height tiles in the bathroom, or splash out on more expensive fixtures and fittings throughout the property.
Through personal experience, I’ve learned most people tend to overestimate how much can be achieved within their construction budget, particularly once extra costs like GST and builder’s margins are factored in. The worst-case scenario is that you end up paying for drawings and plans you can’t afford to use and have to go back to the drawing board.
Fixed price quote
Once you’ve received your rough estimate and have used it to help make some vital decisions about your project, you’ll be in a position to work towards obtaining your fixed price quote. Not to be mistaken for a free quote, a fixed price quote is a calculation of the exact cost of your project, including a detailed breakdown of all expenses. Essentially, it will tell you exactly how much you’ll have to pay at the end of the project.
Meanwhile, a free quote is a different thing altogether and has several associated pitfalls. This type of quote often contains what are known as Provisional Sums (PS’s) and Prime Cost Items (PC’s), which tend to be calculated through guesswork. For instance, if the actual cost on delivery of your plumbing ends up exceeding the amount allowed for in the free quote, YOU will be the one forced to pay the extra amount. What’s more, some builders are sneaky and will include the lowest possible PC’s and PS’s in their fees to make sure they win the job. This means additional costs to their clients later in the process are inevitable.
Fixed price or free quote?
A fixed price quote is a better option because it means you’ll know exactly what you’ll be required to pay, with zero surprises later on. However, this is typically not a free service. Despite this, most people find that it’s well worth the additional expenditure due to the level of detail and accuracy of the information provided. This intelligence enables you to make informed decisions about where you might save money as the project evolves, while also allowing you to see where you might be able to spend a bit extra on “splurge items” that will ultimately add value to your property.
How do you go about sourcing a fixed price quote?
As the project progresses beyond the rough estimate stage, your builder will work with your chosen architect or draftsperson to make sure all plans align with the available funds. Some additional factors to consider at this stage will be the choice of materials, fixtures and fittings, labour, equipment and timeframe. Once these extensive preliminary discussions have taken place, your builder will be in a position to start determining your detailed fixed price quote.
While all builders will differ slightly in their processes, at JTDODD we’ll send you our specially developed and comprehensive Preliminary Agreement FAQs Guide, which contains all the information you’ll likely need to know at this stage. Once you’re comfortable with everything, you’ll sign the Preliminary Agreement and we’ll start gathering all the information needed to inform your detailed fixed price quote.
But first thing’s first.
Begin the process by contacting us and introducing yourself.
Simply click here to get started!