When managing a commercial property, maintenance and refurbishment work often requires hiring builders. But before choosing the right partner, a crucial step is reviewing their quote. Builder quotes can be tricky, with hidden clauses or vague details that can lead to unexpected costs and delays. As a property or project manager, understanding how to read between the lines is key to protecting your budget and ensuring project success.

In this guide, we’ll walk through the essential elements of a builder’s quote, highlight potential red flags, and give you tips on how to compare quotes that come in at similar prices.

 

1. Break Down the Quote – Know What’s Included

When reviewing a builder’s quote, the first thing to check is the level of detail. A well-prepared quote should clearly outline the scope of work, materials, and timelines. Here’s what to look for:

Scope of Work

The quote should include a detailed breakdown of what the builder is responsible for. Look for phrases like “complete” or “all-inclusive” for tasks like demolition, electrical, plumbing, etc. If the scope is too vague, ask for clarification. A good quote will specify tasks line-by-line to avoid any confusion about what’s included and what isn’t.

Materials

Ensure the quote provides specific details about the materials to be used, including quality and brand. If it just says, “standard materials,” it’s worth asking what that means. Vague descriptions can lead to disputes over material quality down the line.

Labour Costs

Look for an itemized breakdown of labour, which should cover each type of trade required for the project (e.g., carpenters, electricians). Vague or lump-sum labour costs could mean unexpected charges later.

 

2. Spotting Clauses That Benefit the Builder

Builders will often include clauses to protect themselves in case of unforeseen circumstances. While these clauses aren’t necessarily bad, you should understand how they might affect your project. Keep an eye on the following:

Provisional Sums

This refers to estimated costs for work that hasn’t been fully defined yet. While provisional sums can be necessary for some projects, too many of them in a quote can mean the builder hasn’t done their due diligence. They could inflate costs later if the actual expenses turn out to be higher than estimated.

Contingency Fees

Some builders include a contingency amount to cover unexpected costs. While it’s good to have a buffer, a contingency fee that’s too high could indicate poor planning.

Excluded Works

Always check the exclusions section. These are tasks the builder will not perform or areas they are not responsible for. If too many key elements are excluded, you may end up with a significant amount of extra work to coordinate on your end or face higher costs if another contractor needs to be brought in.

 

3. Understanding Potential Extra Costs

Many builders’ quotes are structured to look attractive upfront but can result in hefty extra costs. Be on the lookout for these items:

Variations

Builders often include a clause allowing for “variations,” meaning any changes to the agreed work scope could result in extra charges. It’s important to clarify in advance how variations will be handled and what the approval process looks like. A well-prepared builder will allow for flexibility but should make it clear how changes will affect cost and timelines.

Hourly Rates for Extra Work

If there’s a section that includes hourly rates for additional work outside the agreed scope, make sure the rates are competitive. Having this in writing is crucial, but you should ask for estimates on potential extras to get a full picture.

Payment Terms

Check the payment schedule carefully. Builders may ask for a percentage of the total cost upfront, followed by staged payments. Ensure that payments align with the completion of key milestones rather than specific dates, so you’re not paying for work that hasn’t been done yet.

 

4. How to Compare Two Similar Quotes

Let’s say you have two quotes that are close in price. How do you decide which one is the better option? Here’s what to consider:

Level of Detail

The more detailed quote is often the safer bet. A builder who outlines their costs and tasks thoroughly is likely to be more transparent and reliable. Vague quotes are often a red flag and can lead to hidden costs later.

Reputation and Experience

Price alone shouldn’t determine your choice. Consider each builder’s track record with similar projects. Ask for references from previous clients in commercial property management. You want a builder who has demonstrated reliability, not just a lower cost.

In-House vs Sucontracted Work

Does the builder employ their own tradespeople, or do they subcontract everything out? Builders who employ their own team (like we do at Core4) have more control over timelines and costs. Subcontracted work can lead to delays and unexpected price hikes since the builder may have less direct oversight.

Timelines

How do the proposed timelines compare? A lower quote might come with longer timelines, which could cost you more in the long run due to property downtime. Ensure the builder’s schedule aligns with your expectations.

 

5. Red Flags to Watch Out For

Some warning signs should raise immediate concerns when reviewing a builder’s quote:

To Good to be True

If one quote is significantly lower than others, proceed with caution. It could indicate the builder is cutting corners on materials or labour, or they may plan to hit you with extra costs once work begins.

No Mention of Permits or Insurance

Builders must obtain necessary permits and have the appropriate insurance. If these aren’t mentioned, confirm that they are covered in the quote, or you could be held liable if something goes wrong.

Short Warranty Periods

A reputable builder should offer a reasonable warranty on their work. If the warranty period is too short, it might indicate a lack of confidence in the quality of their work.

 

Conclusion

When reviewing a builder’s quote, the goal is to protect your project’s budget and timeline without sacrificing quality. By understanding what to look for and knowing how to compare quotes, you can make an informed decision that leads to a successful, long-term partnership. At Core4, we believe in transparency, and our in-house team ensures that your project is completed on time and within budget, with no unpleasant surprises.