Builder's Quote Too High? What to Do Before You Respond

When a builder's quote comes back well above your budget, the usual reactions are to assume the builder is overpricing, to cut scope at random, or to start shopping for a cheaper builder. None of these is the right first step. The first step is to understand what the number actually covers and where the gap is.

A high quote is not always a high price

A builder prices what is drawn and specified, plus the risk where it is not. If the documents are thin, the quote may carry provisional sums, allowances and contingency for things the drawings leave open. If the documents are complete, the number is usually close to what the building costs. Either way, the figure tells you about the documents as much as the builder.

Step 1: Check what the quote includes

• Is it fixed price, or does it contain provisional sums and prime cost items, and how large are they?
• What is excluded: landscaping, driveways, window furnishings, site costs, connections, and so on
• What allowances are stated for finishes and fixtures, and do they match your specification?
• What assumptions does the builder state about the site, soil and access?
• Which drawing set was it priced from, and is that the current set?

Two quotes with the same bottom line can cover very different scopes. See how to read a builder quote before comparing any numbers.

Step 2: Find where the gap is

Ask for the quote broken down by trade or element, not a single lump sum. Compare it against what you expected, element by element. The gap usually sits in a small number of places: structure and site works, a high specification in a few rooms, a complex roof, or glazing. Knowing which ones tells you whether you have a pricing problem, a scope problem or a design problem.

Step 3: Decide what kind of problem it is

• A scope-match problem: the quote does not cover what the drawings show, or covers more than you expected. An independent read of the quote against the drawings settles this
• A documentation problem: gaps in the drawings led to allowances and contingency. Resolving the documents often brings the price down
• A design problem: the building is more expensive than the budget allows. The decisions that drive cost are in the design, so the fix is in the design, not in negotiation
• A market or builder problem: the price is firm for that builder. A properly run second tender on the same documents will show whether it is

Your options

If the gap is a scope or understanding problem, a Quote Read checks the quote against your drawings line by line and flags what is included, excluded or left open. If the quote is a fair price for a building that costs more than your budget, Realignment is the structured way to bring design and cost back together while keeping the design intent. If the quote cannot be trusted or compared, Tender Support manages a like-for-like re-tender. See also when the tender comes back over budget.

What not to do

• Do not cut items at random. Savings in dry rooms are small. The real savings are in wet areas, structure and larger package decisions
• Do not negotiate without a position. "It feels high" gives the builder nothing to respond to. A costed counter-position does
• Do not show one builder another's price. It damages trust and rarely gets a better number
• Do not accept a lower number without checking what came out of the scope to get it
• Do not go to tender again on the same documents expecting a different result

The earlier a gap is found, the cheaper it is to close. See the true cost of redesign for how the cost of changing course grows through the project.