What Is The Difference Between Building Estimates, Quotes & Proposals?
- February 23, 2022
Learning how the construction industry uses these terms will make a world of difference in understanding the potential costs involved in your new build or renovation.
As a South Coast boutqiue renovation specialist, we like to be honest and crystal clear when it comes to your project costs and always offer accurate and reliable estimates and quotes. So, we want to walk you through the differences between estimates, quotes and proposals to give you the knowledge you need to properly evaluate your building estimates and quotes.
First thing’s first: estimates, quotes and proposals are different terms. Knowing the differences between them can help save you time and money when searching for the right builder for your project.
An estimate is your builder’s educated guess of your project cost. It’s a non-binding general idea of price calculated using the information you provide (such as site plans and scope of works). This means that the estimate may vary from the finalised project costs, which take into account further information you provide and unexpected costs during construction.
While an estimate may not give an accurate picture of your project costs, it does allow you to consider the financial feasibility of your project and adjust your project details and selections to suit your budget. So, an estimate is valuable for determining the price range of your project and figuring out how to balance your design aspirations with your budget. This way, you can provide a more detailed and definite scope of works to your builder at the quote stage.
Builders will generally give you an estimate free of cost, and may want to arrange a site meeting to assess the site and discuss the scope of works before providing an estimate.
Before we dive into what a quote is, we should warn you to be weary of builders who provide free quotes. You should consider quotes as an initial expense of your building project. Free quotes, especially when provided in the early stages of your project, generally don’t consider your detailed specifications or the entire scope of your project. As a result, the free quote may seem appealing due to low estimates, but these figures leave you vulnerable to unforeseen variations – meaning you may pay more as your project progresses. That’s why it’s well worth your money investing in a transparent quote from a reputable builder.
A quote gives you an accurate price for your specific project. Once you accept it, it represents a binding, fixed price: meaning your builder can’t increase the price unless you adjust your project design, change your scope of works, choose selections outside your quote allowance or unforeseen circumstances arise. A quote will expire after a specified amount of time because materials and overheads change over time. For example, at Locspec Building Services our quotes are valid for 30 days
Quotes are useful for providing a transparent and specific overview of what your project entails and the costs associated with it. A good quote will detail your project’s scope of works, inclusions, exclusions and optional additions. Because they paint an accurate picture of your specific build, reputable quotes usually have a fee attached to them.
Your quote may include PC and PS items. PC items are prime cost items (for materials), and PS or provisional allowance items are provisional sum items (for labour/services). Both items are variable costs, because certain materials and trade services can’t be definitively predicted – especially if you haven’t confirmed aspects of your project. Professional builders will provide you a quote with an informed price prediction, and specify which costs are variable.
A proposal is similar to a quote, but with more pizzaz. On top of the features of a quote, a proposal includes information about the value you receive – including a more detailed scope of works, timeline and cost inclusions and exclusions. A proposal may even be itemised, so you can see exactly what’s included in your project, down to the small details.
A building proposal should also highlight the company’s client testimonials, guarantees and any additional information you may need to help make your decision. Like quotes, proposals generally have a fee attached to them, which may vary depending on the size of your build. You can expect the builder to prepare a 20-30 page document as your proposal.
Here at Locspec Building we offer free estimates and itemised quote proposals for a fee. Our estimates give you a guideline for financial consideration, based on a site meeting, your plans and previous work completed with a similar quality of finishes. Whereas, our fully itemised quote proposal offers a specific outline of the inclusions, exclusions and costs involved with your project. Our proposal also includes a proposed project timeline, testimonials, our values and guarantees, and any additional information you may need to help make your decision.
The all-important final step is to consider if the builder is right for you. Have a look at their website and social media profiles as well as their portfolio and references. Is the information they provide about themselves consistent with their client’s testimonials? Do their recent projects blow you away? There’s a lot to consider here. But, essentially, you want to find out if their communication style suits your needs as a client and if their building style matches the type of home you have in mind.
Our goal for this home renovation was to create an elegant yet relaxed coastal home to be shared with family and friends. The renovation boasts blackbutt timber features throughout an open plan kitchen, living and dining area.
Our goal was to give our clients a functional home that they love, featuring their personal touches. This full house renovation included removing various internal walls to create an open plan living, dining and kitchen area, leading onto a huge outdoor entertainment deck.
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