How to compare three builders' quotes properly

Get three quotes, everyone says. So you do, and the numbers come back far enough apart that they cannot possibly describe the same house. One is tempting, one seems fair, one made you wince. Now what?

Here is the thing most people are never told: the spread is usually not about margin. It is about scope. The three builders have made different assumptions, included different work, allowed different amounts for the unknowns, and excluded different things. Until you line all that up, you are not comparing prices. You are comparing documents that happen to end in a number.

This is a method for doing the lining up. It takes an evening. Given what is at stake, that is the best hourly rate you will ever earn.

The method, in order

1. 01Confirm all three quotes priced the same documents. Write down exactly which drawings, revisions and specifications each builder was given. If one priced an earlier revision, or priced from a walkthrough and a chat while the others had drawings, that quote is not wrong, but it is not comparable either. Fix this first because nothing else matters until it is fixed.
2. 02Pull every provisional sum and prime cost item out of each quote and list them side by side. These are the allowances for unknowns and undecided selections, and they are where a sharp-looking number usually hides its softness. A low quote carrying lean allowances and a high quote carrying generous ones may be the same price in the end. You cannot know until you see them in one table.
3. 03List the exclusions from each quote, then merge the lists. Now check every excluded item against all three quotes. If builder A excludes scaffolding and builder B never mentions it, ring builder B and ask. Silence is not inclusion. The merged exclusions list is the single most revealing document this exercise produces, because it shows you what each builder hoped you would not ask about.
4. 04Check who carries the project costs around the building itself. Consent fees, engineering, geotechnical investigation, surveying, demolition and disposal, temporary fencing, portaloo, power and water during the build, connection fees, landscaping and driveways. These are real money and they land somewhere. Find out where, in each quote.
5. 05Compare what each quote says about the ground. In this part of the country the foundation follows the ground, and the ground varies street by street. A quote that assumes a standard foundation on a site that will need engineering is not cheaper. It is deferring a cost you will definitely meet. Ask each builder what their foundation price assumes and what happens if the geotech report says otherwise.
6. 06Compare the contract form and payment terms, not just the price. Ask each builder for the actual contract they intend to use, read the variations clause, and look at how payments are staged. Payments tied to visible progress protect you. Large deposits and date-based payments protect them. Residential work of $30,000 or more including GST requires a written contract by law, so there is no reason any builder cannot show you one now.
7. 07Ring each builder with your gaps list and let them respond. This is the step people skip, and it is the one that actually sorts the field. A good builder will close the gaps quickly and cheerfully, and their revised quote will be worth more than the original. A builder who gets defensive about being asked to price what they left out has told you exactly how the variations conversation will go in month three.
8. 08Only now compare the numbers. With scopes aligned, allowances visible, exclusions closed and contracts read, the remaining spread is real. It reflects margin, overhead, demand and how much each builder wants the job. At this point choosing the cheapest is a legitimate decision. Before this point it was a guess.

The table that does the work

All of this collapses into one document worth building: a simple table with a row for every scope item, allowance, exclusion and project cost, and a column for each builder. It does not need software. A pad of paper works. What matters is that every line item from every quote appears on it, so a blank cell becomes a question rather than a hope. The act of building the table is the comparison, and by the time it is full, you usually know the answer.

Certain items go missing from quotes so reliably that they are worth checking by name:

• Scaffolding and edge protection, which on anything two-storey or steep-roofed is a real number.
• Demolition, and separately the disposal of what was demolished, including any asbestos testing and removal on older houses.
• Council costs: consent fees, inspection charges and any contributions councils levy, plus who fronts them and when.
• Engineering and geotechnical work, both the reports and the producer statements, and any extra inspections the engineer must attend.
• Temporary services and facilities: site power and water, a portaloo, fencing, and protection of paths, driveways and planting.
• The finishing trades people forget they need: painting inside and out, floor coverings, a final builders' clean, and the rubbish gone from site.
• External works: decks, steps, paths, the driveway reinstated where the digger wrecked it, and any landscaping at all.

What the spread is telling you

After the exercise, the quotes usually rearrange themselves. The cheap quote often stops being cheap once its gaps are priced. Sometimes the middle quote turns out to be the sharpest because it was the most complete all along. And occasionally the expensive quote stays expensive and earns it, because it was the only one that priced the whole job including the parts nobody wanted to talk about.

Pay attention to how each builder behaved while you did this. The quote is a preview of the relationship. A builder whose paperwork was clear, whose allowances were defensible and who answered your gaps list without flinching will run your job the same way. That is worth real money over a six-month build, even when it does not show up in the bottom line.

Check the small print about time as well. Quotes are typically valid for a stated period, and a quote that has been sitting for months may not survive contact with today's material prices. Ask each builder how long their number holds and when they could genuinely start, because a sharp price from a builder who cannot begin for a long time is a different offer from a slightly higher one that starts next month, and only you know what your own timeline is worth.

And resist the urge to shop one builder's quote to another. It feels like a strong move and it mostly is not: the second builder simply prices to just under the number you showed them, and you have converted a real comparison into an auction with one honest bidder. Keep the quotes to yourself, run the method, and let each builder's own paperwork speak for them.

Three quotes compared properly will land you with one builder you trust, a scope you understand, and a price that means something. Three bottom lines compared in your head will land you with the builder who was best at leaving things out. The evening of work is the difference, and it pays twice: once in the choice you make, and again months later, when the job runs to a scope everyone actually read.