04 Nov The Complete Guide to Understanding and Comparing Renovation Quotes
Renovation quotes, even building quotes in general are a huge hurdle that stops homeowners from undertaking large building projects. Trying to get a builder to actually provide a quote is one thing. Trying to understand them is another. And, then there’s the fun task of trying to compare the quotes so you can make the important decision of who you will trust to renovate your home.
We hear you alright! And we understand your frustration. Renovating or extending your home is a process, and having your project quoted is part and parcel with the process and unfortunately unavoidable.
We can’t click our fingers and your home will magically transform from a tired, outdated, unworkable space into a refreshed, re-energised, functional home in an instant. But what we can do is help you navigate the process, starting at the renovation quotes.
In this guide, we’ll outline everything you need to know about renovation quotes including:
- Getting the right builder to quote
- Providing clear project requirements
- Understanding the different quote types
- Paying for renovation quotes
- How to compare renovation quotes
- Double-checking the fine print
- Choosing the best quote for your project
First Things First, Find the Right Builders to Get the Right Quote
It may go without saying but to get the right quotes, you need to find the right builders. In the building game, there are several areas that builders can specialise in. If you are specifically wanting a renovation or extension, then there is no point in asking a volume builder, commercial builder or even a custom home builder for a quote.
Builders who specialise solely in renovations is where you should be sourcing your quotes. They have a better understanding of the renovation and extension process. They also know what to include in a quote in relation to renovation work (costings for demolition or sourcing matching materials for example).
Hot Tip: While you’re researching the right builders for your quotes and project, make sure to check their licensing, experience and testimonials. Our free download will guide you through this step.
Requesting Renovation Quotes – Provide Clear Project Requirements
There is a big difference between getting renovation advice from a builder and getting renovation quotes (or proposals as they are also called). And confusing the two will put you directly on the fast track to stress and confusion.
To get relevant renovation quotes that you can compare, you need to give all the same brief to all the renovation builders you want to quote on your project.
If you don’t know exactly what you want to achieve with your renovation, then you’re not ready for a quote. You are still at the advice stage. And by all means, have as many consultations as you need to get your renovation plans locked in. But if you don’t have plans and a clear project scope of work, then you are not quite ready for the project to be quoted.
When you are ready for quotes, you need to provide each builder with the same project overview. Otherwise, you won’t just be getting apples back, you’ll be getting an entire fruit bowl of varying information.
You need to be clear with each builder about what you want them to quote on, any particular details that could impact the project and any particular deadlines you need to meet.
You should give the builders any of the following information if you have it:
- Construction or concept plans of your renovation or extension
- Engineering plans and reports
- Survey or site plans
- An outline of materials, finishes and products you want to use in your renovation (particularly if you want specific items or would like to reuse existing/heritage features)
- Any other reports and information that is relevant to your project
If you don’t have this information ready for the builder, that’s okay. They can work with you to gather this information. For example, Walkom Constructions have Consultation and Concept Design Packs that cover all these elements so you have everything you need to price up your project.
If you’re still not quite sure what information the builder needs, remember, It’s far better to give too much information than not enough.
Ask For The Right Type of Quote
Believe it or not, there are a couple of ways that a builder can quote and contract your project. What method you go with can have a significant impact on the costs.
Cost Plus Contract – Explained in the simplest terms, a Cost Plus contract is where you pay the builder’s costs to complete your renovation plus an agreed margin on top. It can be a risky way to go, especially with renovations. You may be given a ballpark figure of overall costs, but without having an itemised breakdown and a set price, the costs can escalate very quickly and you could find yourself paying a lot more than you anticipated.
Fixed-Price Contract – Fixed-price contracts in comparison, is an agreed-upon price between yourself and the builder to complete your project. With fixed-priced contracts, all elements are itemised with a price allocated to each. This means you know fairly accurately how much your renovation or extension will cost from the beginning.
Fixed-Price contracts are the most common type of contract used for residential construction and a safer way to go, particularly for the budget-conscious.
When asking for quotes, specify clearly what type of contract you want to go with. There is no point in trying to compare cost plus quotes to fixed price quotes. One is an apple and the other is an orange.
A Side Note About Paying For Renovation Quotes
We hear a lot of comments about having to pay for renovation quotes. There isn’t really a standard when it comes to charging to quote. Some builders provide them for free while others charge a fee. At Walkom Constructions, we charge a fee for the following reasons.
- Renovation quotes are extensive. 20 pages long extensive! They take a considerable amount of time to produce and they include a lot of specific and relevant information. Effectively, within our quotes, we are providing you with our expert knowledge, our industry IP (intellectual property) and for the time taken to source pricing from subcontractors and suppliers and compile all the information required to complete your project.As a company, we couldn’t afford to be doing quotes this detailed for free. And if we paired back the information so they were faster and easier to produce and we could provide them for free, then you wouldn’t be getting enough information to make an informed decision.
- A fee for quoting tells us you’re serious. As a professional renovation building company, we only take on a limited number of projects every year. We are also selective about the clients and projects we work with. We don’t want every Tom, Dick and Harry coming to us for a quote, and you shouldn’t want that either. Free quoting means we are not using our time effectively, and we are spending less time focusing on the serious ‘ready to go’ clients and too much on the ‘tyre-kickers’.
From a client perspective, you should be mindful and wary of quotes being provided for free. There is only a 20% chance that free quotes are accurate and won’t lead to issues throughout the project and budget blow-outs.
Getting the Quotes Back – Make sure everything is included
When you receive the renovation quotes back the first thing you need to check is that all the quotes include the relevant information, have covered all elements of the project and all-round have all the information you need to compare the quotes and make a decision about who to choose to work on your project.
If any of the quotes are different or missing information, then you’ll have a hard time trying to compare them. It’s best to go back to the builder and request more information if anything has been left out or is vague in the details (or maybe take it as a sign that quote might just need to be the first one ruled out).
Some of the common things that can often be overlooked, not included or varying in quotes:
- Consultant fees
- Design and/or draftsperson fees
- Approval and Certification fees
- Site preparation/Demolition costs
- Site temporary legal requirements
- Site security and amenities (also known as Temporary Fencing and Site Toilet)
- Builders’ cleans and rubbish removal
Once you are satisfied that all the details are included in each quote, you can get down to the job of comparing them.
Comparing Your Renovation Quotes – Make Sure To Take Your Time and Double Check the Fine Print
Now you’re at the pointy end. Crunch time. Time to get out the magnifying glass and scrutinise the fine print.
Okay, okay, maybe that’s a little melodramatic, but in all seriousness, once you have all your quotes back, you’re ready to compare and review them all, it’s important to take your time, go through all the details and double-check everything. Particularly the fine print.
We, as builders, know that when you first get your quotes back, you’re just going to just skip straight to the back to find the final figure. And by all means, do that. You’re only human after all. But after you’ve done that, set some time aside without distraction and the kids jumping all over you to really go through the information provided in all the quotes.
While the final figure is important, knowing what’s included and what is not to get to that final figure is equally important, if not more so.
Hot Tip: Make sure your significant other also goes through the details as well and together you assess each proposal. Remember, large scale renovations, no matter how smoothly they run, can come with increased worry and anxiety, so it’s important that you’re both on the same page about the builder from day one.
So what are you actually comparing?
Good question! It’s likely that your quotes won’t be set out or formatted exactly the same, but there should be itemised costings along with other details covering every element of your renovation in each quote. What you want to do is compare each item carefully.
Double-check all the quantities are the same or close to it, and the finishes and materials specified in the quotes are of a similar quality. You don’t want to be paying more for a cheaper or inferior product.
Pay Particular Attention to Industry Jargon Such As ‘Provisional Sums’ and ‘Prime Cost’
Don’t let industry terms or jargon put you off from understanding the quotes. If any term is unfamiliar to you, or you’re not quite sure what they mean, ask.
‘Provisional sums’ and ‘Prime Cost’ are a few common ‘industry terms’ that are used in quotes. Knowing what they mean and how they affect your project budget is important.
Basically, they mean the price could change.
A Provisional Sum is often provided for anything unable to be quoted specifically. For example, earth-works may be listed as a Provisional Sum item, if the work turns out to be more difficult or expensive than the price allocated, you may end up paying way more than the base rate.
Prime Costs generally covers elements of your design such as bathroom or plumbing fixtures that aren’t specified specifically. Builders may add bathroom fittings and fixtures, appliances, doors and the like under prime costs. It covers them if an item becomes too difficult to source during the building process, they can make substitutions without your consent. If a substitution costs more, you pay the extra.
If your builder has quoted each item specifically and has not included any provisional sums or prime costs, great. If they have included these two elements then it’s something you should pay close attention to.
Be Wary of Quotes that are Significantly Different in Price
Naturally, all quotes are not going to be exactly the same price. Some will be more, some will be less, some will be in the general ballpark of each other, while others may be significantly cheaper or more expensive. If the pricing is way off, you may need to dig a little deeper and find out why.
There can be several reasons why renovation quotes can vary significantly in price. Some of these reasons can include:
- Key elements may be missing in the quotes or the builder has misinterpreted the scope of work. For example, the builder may have included landscaping when you are doing that yourself.
- A builder may have quoted for different materials on the project that impacts the price.
- The provisional sums or prime costs allocated may vary significantly.
- The builder may charge according to his experience and reputation in the industry.
- A Builder may be using a very under-handed tactic of quoting low to win the project but then clawing back costs through variations along the way. (This is why we can’t emphasise enough how important it is to make sure everything is itemised and outlined in the quote. You don’t want to sign on the dotted line of the cheapest quote only to find out at the end of the project it worked out being the most expensive.)
If you find a quote is significantly more or less expensive than the others and you can’t work out why, it’s worth having a conversation directly with the builder to go through the details together.
What About Communication, Timeframes, Risk Management and Warranties?
Okay, up until this stage, the focus has been largely based around pricing, the scope of work and construction details. There are, however, other elements within a renovation quote that need to be considered carefully and factored into your final decision. These elements are communication, timeframes, risk management and warranties.
Timeframes – Are the builders able to fit your project in within your preferred time frames or do they have a long wait time before your project can even start? And when the project has started, how long do they anticipate the building process will go for?
Communication – How are the builder’s planning to communicate with you throughout the process? Do they have a system in place to manage communication from everyone involved? Or is it up to you to request updates on the project?
Risk Management – What is the builders procedure to manage any issues that may arise during the build?
All the answers to these questions should be outlined clearly and concisely in the renovation quotes. Information provided in these areas will either give you assurance and confidence in the builder or be a cause for concern.
Warranties – Warranties is also another biggie to check. Australian builders, manufacturers and product suppliers have a legal obligation to warrant their work and the products used. The work completed on your property will be covered under statutory warranties. The products and materials used are covered under a manufacturer’s warranty. And you’re covered for the project under Builders Warranty Insurance, should anything happen to the builder during your build or during the warranty period.
It’s good that you’re covered regardless of the builder you choose, however, to reduce confusion, it’s important to have all warranty information clearly outlined in your contract.
Again, if there is not enough information in any of these areas for you to make a confident decision on the builder you’d like to work with, it’s a good idea to go back to the builder and ask any questions you may have.
Renovation Quotes Should be an Extension of the Builder
Of course, price is important, especially if you are on a tight budget, but so is your gut feel for the builder. A quality builder will provide great service from the get-go, and their renovation quotes should be a reflection of the work they produce. If the quotes you’ve received are detailed, extensive, compiled in a logical order and professionally presented, then this is a reflection on the builder.
If, on the other hand, the quote is messy, vague, hard to understand, hard to work out what is included and what is not, then this is also a reflection on the builder.
Remember, you’re in the driver’s seat. This is your project after all. Keep all this information in mind while going through your renovation quotes, and once you have all the information, you’ll find the best one for you is the one you feel most confident signing with.
Want more information about renovation quotes or looking for guidance on your renovation project? Give us a call today and book in for a renovation consultation.