05 Feb Why Your Builder Should Be Charging For Proposals, Not Quotes.
It benefits you in more ways than one and besides, Free quotes Are not actually free.
Proposal Vs Quote – What’s the difference?
Obviously this depends greatly on the renovation area of your home, and the fixtures, inclusions and finishes of the work. However some general prices can be estimated based on previous jobs of the same kind.
Firstly, let’s be clear, there is a crucial difference between a legitimate works proposal / cost analysis of a project and an estimate. Builders may, at times, provide a square meter rate as a “quote”, but this, in effect, is an estimate and the true costs associated with your particular project have not been taken into account. The builder will have to make assumptions which may not align with or even come close to your expectations.
Whether it’s construction style, design extent or your choice of finishes, all these thing can make a dramatic difference in total construction cost. Not having an accurate and concise collection of information for a detailed cost analysis can translate into having many unexpected variations and can easily exhaust a well planned budget.
Secondly, if the builder is conducting a full price proposal, this involves acquiring sub-contractor quotes and spending hours calculating costs of materials and labour for your project, checking land overlays for council approvals, engaging engineers and certifiers and the list can go on. Now, lets say, of these 10 quotes the builder only wins 3. The 7 unsuccessful quotes, will still have consumed time and resources for the builder and who pays for that?
If the builder pays for it, they’re not just losing time and money, these losses can eventually take a toll on a business and possibly see them become yet another statistic in the Australian building landscape of failed small business. The vast majority of builders you will meet are small businesses trying to provide for there family, not big companies. And the unfortunate truth is that it could happen during your project. This can cause so much unnecessary time waste and disappointment for you and your family. Not to mention the financial burden of acquiring a new builder to continue with your build.
Alternatively, the builder would need to push the costs of the unsuccessful quotes on to the contracts of successful quotes, increasing their overheads. This increases the contract price for you and now you are not just paying for your quote but for others as well. And this, I’m sure does not sound fair to you. Even if the builder’s usual costs of sales for a quote are low,
perhaps $300 for a small project, this would equate to an increase in your quote of $428, equalling $728 which would then need to be added to your contract to make ends meet. Now on a larger project it could be 10x those amounts. That’s some serious coin to be wasting without even knowing it, and this is how many builders have provided free quotes for years. Imagine just how much extra money has been paid from successful contract bids, to cover the thousands of bids that get passed on.
What’s The Alternative?
Besides the cost benefits associated with the quoting process, there are some other great positives to paying for quotes.
After doing your research on Builders who service your local area, and deciding to engage one of them, paying for a cost analysis or in most cases, signing a pre-construction agreement, gives you the opportunity to get to know the builder, subcontractors and their processes before engaging them for a full scale build.
Think of it as a test drive. When you buy a car, you wouldn’t buy one based solely on the sticker price. You would arrange a test drive, research the vehicle and inspect it to ensure you liked the feel, ride and handling of the vehicle, and be sure that it’s the right fit for you and your family.
Working with a Builder is very much the same. Although affordability is one of the most important factors in making a purchase, an expensive car can be overpriced and uncomfortable and a cheap robust car may be all you need. In the same way, a high quality builder may charge more and have great credentials, but ultimately it has to be the right fit for you. And choosing a builder solely on price, can turn into a big disaster.
Still unsure? Ask Questions.
Its understandable however that, despite these points, you still might be reluctant to hand over your hard earned dollars, for simply a price on your project. But keep in mind that a relatively small investment upfront could save you from thousands of dollars of pain further down the track. This makes it all the more important for you to get to know the person you will be dealing with, and how their processes work.
When talking with a Builder, ask them as many questions as you feel you need to know whether or not to proceed with them. Ask them about there process, there fees, inclusions, their experience in the industry. Ask them to provide testimonials or references from previous clients. Any Builder worth your time will be willing to answer any questions you may have. If something feels off, it might be best to walk away and try someone new. Not all builders are created equal and just because one doesn’t suit your needs, it does not mean you are stuck.
At the end of the day, keep in mind:
“The Bitterness of Poor Quality Remains Long After the Sweetness of Low Price is Forgotten” and free is pretty low.
At Sivart Constructions we provide a Pre-construction Service that ensures you receive the best possible proposal for a high quality construction project. If you would like to know more about how we can help you with your next project, Please contact us at 3393 3484, we’d love to help you out.