Quoting Tips and Tricks
Updated: Oct 29, 2021
I inwardly cringe when I hear of a home owner who is comparing building quotes and all they are looking at is the number at the bottom…..
Generally if they have given a set of plans to several builders to quote, there will have been at least a slightly different conversation with each of them putting them on the back foot when it comes to comparing them later.
Here are some of my tips on how you can compete without cost being the only thing at play.
One of the biggest differences I come across believe it or not…… is the contract type offered. I’ll be chatting with a homeowner and they will say hey! This guy is $150k and this guy is $200k, we should definitely take the lower figure! Except…. The $150k is an estimate, and the $200k is a fixed price contract offer……. If you have read my blogs before the difference between the two is immense!! But how is a homeowner supposed to know that if they aren’t familiar with our terminology? The risk in taking a lower estimate versus a higher fixed price increases dramatically, the estimate can be no better than a good guess, particularly if it has been put together by someone who hasn’t had a lot of time to price or isn’t overly familiar with making sure all costs are covered.
Another thing that seems to always be missing from compared quotes, is a timeline or methodology statement. If one guy is 20k cheaper than the other, but actually wouldn’t be able to start the work for at least a year, and the other is 20k dearer but could start in a fortnight, it is pretty likely that a client needs to know so that they can decide which works best for their circumstances. Generally, people want their project done sooner rather than later…. So include this sort of info in your quote!
On the back of this, what about offering liquidated damages? You will need to explain what they are, but if time is important to your client and you know you can complete within it then why not? You will be more expensive as the cost of the risk will (should!!!) be built in, but for the peace of mind of a client to know you are willing to put your money where you mouth is? Gold!
Another goodie is clarifying spec….. where it is not clear on the plans, maybe you have simply allowed for better quality finishing and fixtures than whoever else is pricing which has pushed your price up. Get a bit glam… include some pics of what you are thinking and show what has been included. Your client can’t possibly know if you don’t make it clear.
The common denominator with all the notes above is the non-communication or celebration of these differences… if you want to stand out you shouldn’t need to slash your margin if you go to the effort of making these other things clear to the person you are hoping to work with on a building project!