When planning to build a new project, it is important to obtain a detailed estimate before you commit to any contracts.
More importantly after you have received your detailed cost estimate, now is the time important to obtain multiple quotations from your builders or subcontractors to finalise your Construction Estimates.
If you are a builder or planning to build as an owner builder you will need to send your construction plans to multiple subcontractors. We recommend a target of obtaining 2-3 quotations per trade for projects under $1,500,00.00 and target of at least 3-4 quotations for projects over $1,500,000.
For example if you receive demolition quotations that are coming back $5k over budget, don’t be alarmed you may find that concrete or carpentry are coming back $10k or 20k cheaper. That’s why it is essential to obtain these quotations before you sign a contract so you can add or subtract the ups and downs and have a guaranteed profit margin when signing on the dotted lin.
And likewise, if you are a home owner or developer looking for a builder you will send your construction plans to multiple builders, we recommend 2-3 quotations per trade for projects under $1,500,00.00 and at least 3-4 quotations for projects over $1,500,000.
Similarly, if you are a home owner or developer and you find the first builder is over budget, don’t be alarmed once you have 3 quotations now you can and negotiate with your potential builders and compare with your budget after your negotiations are complete.
That’s why it is essential to obtain these quotations before you sign a contract so you can add or subtract the nice to have scope items and have a guaranteed project completion cost when signing on the dotted line.
Keep in mind if you send your plans to 3 builders or subcontractors don’t expect to receive three quotations you may need to send to a few extra to guarantee you receive your quotation target.
By obtaining multiple quotations you are minimising your risk of losing money and
allows you to find the most competitive price and ensure that you are getting the best value for your money in comparison to you’re budget.
Furthermore, by comparing quotations, you can get a better sense of the scope of work or inclusions that each builder or subcontractor is proposing. This is particularly important if you have a specific vision for your project. By taking the time to compare quotations, you can be sure that you are making the best decision for your project.