If you are considering building a new home or remodeling your current one, you may decide to have multiple builders come and walk the job site with you. During this short visit you will give these potential builders a description of what you are planning, they may take pictures or some notes of what you want, they may take measurements and sketch a quick plan, they will likely take photos to refer to later, and if you are REALLY on the ball you may have a list of what tasks you want to accomplish and possibly even a floor plan to send with them after this site visit. Some builders will give you an estimate, some will give you a quote. These words are oftentimes used interchangeably, but what do they actually mean? Which one should you prefer? Why?
Let's start with an estimate. Typically, you will get an estimate back much sooner than a quote. This is because an estimate is exactly what its name suggests - an educated guess! An estimate is a very broad assessment of the expected costs to complete the entire project, but these numbers are typically coming from one source - the builder. Now, if this builder has tracked historic pricing on his projects then he may be able to get you pretty close to a realistic budget as long as that data is fairly current and the build-outs are very similar, but in my experience most builders do not have that information in an easily accessible format if at all! Not to mention that the odds of building any custom homes that are nearly identical in fit and finish and square foot cost is about as likely as finding two identical snowflakes! To create this estimate the builder will approximate the material costs, labor costs, cost of subcontractors, taxes, overhead, profit, equipment, etc. These estimates are typically provided for free to the potential client with a statement that says something like, "This estimate is our best approximation of the cost needed to complete your project. This is not the contracted price for the project, but is an educated guess based off of our experience to be used only for general budgetary planning." One important thing for you, the possible client, to keep in mind is that it is very rare for the estimate to match the actual final cost because the initial ballpark guess likely will not capture every little detail needed to complete the project!
Now let's look at what a quote is. A quote, also called a bid here in Texas, is a specific dollar figure from the builder to the client that has been thoroughly thought through and planned out, with input from lumber suppliers, subcontractors, client selections, permitting agencies, engineers, etc. Typically, all of these trade partners and suppliers will provide their own quote to the builder who then compiles the budget and presents it to you with their own markup that includes their cost to manage the job for you. Quotes take a lot of time if they are done well! Additionally, one important little detail, quotes are not based off of one single site visit! They are based off of multiple site visits, hours on the phone working through details with their trade partners, and they must be based off of very thorough floor plans or construction documents! These construction documents are essential in getting the design goals of the project expressed to every team member that is turning the project from a "plan" to a HOME! Quotes are typically valid for a limited period of time - usually 30 days - because they are largely based on commodity prices which tend to fluctuate. When I hand a potential client a bid, I am handing them a document that essentially says, "I will build your project for X amount of dollars. Please sign and date here to accept."
Now, this is where the rubber meets the road. If you are about to invest in what is likely the largest single expenditure of your life, do you want to do that based off of a guess, or would you be more confident knowing the actual cost up front? Let's say that you have a max budget of $400,000.00 and your builder gives you an estimate for $395,000. How confident are you in his guessing ability? Do you think that extra $5,000.00 is enough of a buffer to protect your interests in this financial decision? I bet most of you are shaking your head no!
Here is how we handle this estimate vs bid situation at Fusion Master Builders:
We have created a spreadsheet using recent historical cost data that will give us a ballpark figure. Simply enter in the square footage of your design build, and this spreadsheet will give you that approximate cost in seconds! We do use this method as kind of a gut-check for any tire kickers that are looking for costs with little to no investment on their part - no plans drawn, unrealistic budget, haven't really thought through what their goals are, etc. This is only used as a step 1, and is part of how we qualify you as a legitimate client. If the ballpark meets your budgetary goals, we then proceed to step two.
Step two - we encourage people to hire and pay us to create a bid based off of plans that either they provide from an architect, or that we draw for them. These plans need to be very thorough and include dimensions, sections, details, cabinetry elevations, exterior elevations, electrical, HVAC, plumbing, etc. The more information on the plans, the easier it will be to get an accurate price to the client! If we are engaged to draw the plans obviously that would be an additional cost to the client. Paying for a bid shows the builder that this is a serious client, and they expect and deserve a serious bid! Also, it shows the builder that this client values their time and the builder in return wants to provide value to the client with an accurate quote. It is a win-win scenario!
In answer to the questions at the top of this post, it is the position of Fusion Master Builders that paying for a quote is much more preferable than building your entire project on someone else's guesswork! To find out more about Fusion Master Builders, or to ask questions about our bidding process please contact us through the website!
