The idea of getting several prices for your project is designed to encourage building contractors to keep their margins down, so you can find the best price, but how do you make sure the quotes you get for your building project are realistic, and how do you select which quote to go with?
Comparing quotes from several builders is not straight forward, as price is far from the only variable but you should never base your judgement on price alone.
Everyone’s dream is to get their building project completed in the shortest possible time frame and on budget. This ambition is achievable, but usually at a price, and usually only if you hire a main contractor with a large well-organised workforce, good experienced project managers, and if you have a set of accurate drawings and specification documents with every detail finalised.
Whilst this level of organisation will allow your project to progress as near as possible like clockwork – and you will have the security of a watertight formal contract with penalty clauses for late completion – this is a very expensive way to build. At £2,000 – £3,000/m² for new build work, plus 7-12% in supervising architect’s fees, this route is well beyond what most self-builders would be willing, or are able, to pay.
At the other extreme of the builder market is the small contractor who may have at most two or three employees on his books, with the bulk of the building trades undertaken by a network of subcontractors that they can pull in, as and when they need to.
They, too, will be able to provide you with a quote for your new home, and will agree to work to some form of contract. With smaller overheads to maintain, and a less expensive workforce, the smaller contractor’s price is likely to be considerably lower than a large contractor’s — perhaps £1,200 – £1,800/m² for new build work.
The quote you receive, however, is unlikely to be anywhere near as detailed as the one provided by the main contractor. The larger firm will almost certainly have used a quantity surveyor to work out the price to the last minutiae. The smaller contractor is more likely to have relied on their experience to come up with estimates for each aspect of the project, making the two quotes difficult to compare.
Whichever route you choose, you should end up with the same house. Go with the cheaper price and you will usually save money, but the downside is that the job is likely to take longer, depending on how much other work the contractor has on at the same time, and how busy – and reliable – the subcontractors that they depend upon are.
These two examples illustrate some of the reasons why prices for the same work can vary so enormously, but there are many others that you should take into account when comparing quotes.
Getting a QuoteTo get an accurate price, you’ll need to supply builders with lots of information
The starting point is inviting builders to quote for your project — as opposed to giving you an estimate of the cost. A quote is a more binding price calculated using the information you, or your architect, provides. A builder will not be able to produce a quote until you have full plans and a detailed specification. The documents required by a builder in order to prepare a quote, known as the ‘tender documents’, need to include the following information:
Apples for apples? Even when you've ensured your builders are pricing the same thing, quotes often bear very little resemblance to each other — here’s some reasons why
Quotes vs EstimatesA quotation (quote) is a fixed price that can’t be changed once accepted by the customer. An estimate is an educated guess of what a job might cost, but it isn’t binding. You’re looking for quotes based on full specification documents and plans, as opposed to estimates.
Letchmore Construction Ltd