Two quotes for the same house can be tens of thousands apart and both be honest. The difference is almost never the bricks. It is what has been allowed for, what has been assumed, and what has been quietly left out. An estimator reads a quote back to front: exclusions first, allowances second, the big number last.
The pro turns straight to the exclusions and the provisional sums. A short exclusions list and few provisional sums means the builder has done the homework on your block. A long list means the price is a starting point and the real number arrives as variations.
These words are used loosely in sales offices and precisely in contracts. An estimate is a guess with a disclaimer. A tender is a priced offer based on drawings and a specification, usually valid for a set number of days. A quote sits somewhere in between depending on who wrote it. A contract price is the one that binds, and even that is only fixed for the things that are fixed. Everything else lives in allowances.
The first thing to check is what the price is based on. If the drawings are a brochure floor plan and the specification is a glossy inclusions list, the price is soft. If it is based on your contour survey, your soil report and a full working drawing set, it is firm. The good builders will tell you which one you are holding.
Is this price based on my soil report and survey, or on standard assumptions?
A prime cost item, PC for short, is an allowance for something you have not picked yet: tapware, tiles, appliances, a front door handle. The quote might allow a set amount per square metre for floor tiles or a fixed sum for the oven. If you choose something dearer, you pay the difference plus the builder's margin on it. If you choose something cheaper, you get a credit, minus that margin in some contracts.
The trick estimators look for is the size of the allowance. A tile allowance that only buys the cheapest range in the showroom is not a saving, it is a deferred cost. Ask what the allowance actually buys. Then ask what the margin on overs is, because it is normally written somewhere as a percentage and it is often higher than you would guess.
For each PC item, what product does the allowance actually buy at your supplier, and what margin applies when I go over?
A provisional sum, PS, is an allowance for work whose extent is unknown at signing. Site costs, rock excavation, retaining walls, connection to services, tree removal, upgraded footings. The builder puts in a number, does the work, and then charges you the actual cost plus margin. Provisional sums are where a fixed price stops being fixed.
There is nothing wrong with a provisional sum for genuinely unknown work. There is a lot wrong with a provisional sum for something that could have been priced. If the soil report and survey are done, site costs should be a fixed figure, not a PS. If a builder will not fix site costs after seeing the report, ask why.
Which of these provisional sums can be converted to fixed prices now that the survey and soil report are in?
Site costs cover getting the block ready: cut and fill, the slab upgrade for your soil class, drop edge beams, piers, extra excavation, temporary fencing, connecting sewer and water and power. Advertised base prices include site costs for a flat block with class M soil and services at the front boundary. That block exists, but it is not most blocks.
Look for the assumptions written into the site cost line. Fall across the block, soil class, distance to services, rock. If any of them do not match your block, the number is going to move. A quote that says "site costs: fixed, based on soil report dated X and survey dated Y" is what you want to see.
What fall, soil class and service distances is the site cost line based on?
Every quote has an exclusions list and it is usually near the back. Read it first. Common exclusions: driveway and crossover, landscaping, fencing, letterbox, clothesline, window coverings, flyscreens, floor coverings to bedrooms, the alfresco slab, the ceiling fans, the TV points, the bushfire attack level upgrades, the covenant requirements for the estate, connection fees, council fees, and sometimes the front path.
None of these are dishonest. Together they can be a lot of money and they turn up after you have signed. Write the full list out and put a rough figure against each one yourself before you compare two builders, because one builder including flyscreens and a driveway against another excluding them is not a price difference, it is a scope difference.
Can you walk me through every item on the exclusions page and tell me who normally does it?
The specification or inclusions list describes what you get. Read for brand names followed by "or equivalent" or "or similar". That gives the builder the right to substitute, and the substitute is rarely better. It is normal for supply chain reasons, but you can ask for the specific products that matter to you to be named without the escape clause.
Also look at the words used for quantities. "Downlights to living areas" could be four or fourteen. "Tiling to wet areas" could mean to the ceiling or to 1200 above the floor in the shower and a skirting tile elsewhere. Good specifications give numbers and heights. Vague ones give the builder room.
Which products in this specification can be substituted, and can we name the ones I care about without "or equivalent"?
Progress payments are tied to stages: deposit, base or slab, frame, lock-up, fixing, practical completion. Each state caps the deposit and sets what percentage can be claimed at each stage. A schedule that is front loaded, with a large claim at slab and a small one at completion, means you are funding the builder rather than the other way around, and leaves you less leverage when the defects list is long.
Check that the stage definitions in the quote match the ones in the contract. "Lock-up" should mean external doors and windows in, roof on, so the house can be locked. If a builder's lock-up claim arrives with the garage door not fitted and the front door a sheet of ply, that is a conversation.
What exactly has to be complete before each progress claim is issued?
Put them side by side and normalise the scope. Add the exclusions you will have to pay for anyway to each price. Add a realistic figure for each PC item at the quality you actually want. Add the provisional sums at the top of their likely range, not the bottom. Then compare. Most of the time the gap narrows a lot, and sometimes the dearer quote turns out cheaper.
Then look at what you cannot price: how many variations this builder averages per job, whether the site supervisor has more than twenty houses at once, and how they handled the last person who asked hard questions. That is what the display home does not show you.
The pages on BuildPilot this guide leans on.
A prime cost item is an allowance for a product you have not chosen yet, like tiles or tapware. A provisional sum is an allowance for work whose extent is unknown, like rock excavation or retaining walls. Both can go up or down, and both attract the builder's margin on any increase.
Once the contour survey and soil report are done, yes. Ask for site costs to be converted from a provisional sum to a fixed figure. A builder who will not do that after seeing the reports is keeping the risk on you.
It gives the builder the right to substitute a different product of similar quality. It is normal for supply reasons, but you can ask for the items you care about most to be named without the escape clause.
Driveway and crossover, landscaping, fencing, letterbox, clothesline, window coverings, flyscreens, some floor coverings, ceiling fans, TV points, council and connection fees and estate covenant requirements are the common ones. Add them up before comparing two builders.
Normalise the scope. Add the excluded items you will need, price the PC items at the quality you want, and take provisional sums at the high end. Compare the totals, not the headline numbers.
Sizes quoted are typical for Australian residential work and are given to help you read drawings and ask better questions. They are not a specification. Your engineer, designer, builder and the National Construction Code decide what applies to your house.
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