Why the 'get 3 quotes' method might be hurting your home build
If you’re starting the journey towards building your dream home, you’ve probably heard this advice more than once: ‘make sure you get 3 quotes from builders to ensure you get the best price!’
I know that many reputable ‘home building gurus’ are still strongly advising homeowners to follow this approach. In fact, many architects will only work in this manner. And when an architect is involved, the process is known as sending a builder an invitation to ‘tender’ on a project.
But today I want to unpack why this approach could in fact be hurting your dream home build. And this advice is coming from actual builders who have been approached to take part in this process on multiple occasions (that would be us 😉).
Why your ideal builder might be saying ‘no thanks’ to your quote request:
Here’s something that isn’t so commonly spoken about: the best builders are often the ones who steer clear of participating in competitive quoting. I can tell you that over at AMC (our design and build biz), we would not even look at a project that we were invited to tender on.
This might seem a little shocking, but I’ll step out why we took this stance:
Thorough accurate quoting takes time. Like up to 10 to 12 hours of time. So if we’re going to allocate this chunk of time to unpaid work (and away from our valued paying clients) - we need to know that we are in a great position to win the job. But the odds are not in our favour.
We know that we’re up against at least 2 other builders, so that gives us a 33% chance of winning the project at best
We know that the clients haven’t met us before, so the only thing they will be basing their decision on is price
And if the client hasn’t had any kind of cost estimate carried out before this point, it’s likely that they’re going to get a huge shock at the price and not go on to build anyway (further reducing the likelihood of this turning into a paying project for us).
So you can see that at its core, this doesn’t make great business sense for us (*hot tip* - you always want to engage a builder with great business sense when you’re about to make a huge financial investment with them).
Accurate quotes often lose (and why that’s a problem):
In addition to this, thorough and fully transparent quotes (which we were all about at AMC) generally lead to what *appears* to be a higher overall price. But what you’re actually seeing is an accurate price.
As a homeowner, this can be hard to decipher (and accept!). And when quotes are coming in higher than you hoped, there can be an emotional pull to go with the cheaper quote so that your dream home vision isn’t shattered before you even get started.
But there are a number of dangers with a lower quote:
The builder could be lowballing just to win the work (which is very concerning! If they have to lowball to win work - they are also a builder who is likely to go bust).
They may not have taken the time to quote accurately meaning key elements have been missed. This means you’ll either be charged down the track to add these things back in, or they’ll never make it into the final build.
They haven’t asked the right questions to make sure everything has been accounted for, meaning the vision you have in your head of the final finish, may be very different to what you’ve been given a price for.
Lower quality materials and finishes may have been quoted for, meaning your dream home may not meet your high quality and long lasting expectations.
Relationships matter! and why pricing alone is a terrible foundation
When you select your builder purely based on price, you’re missing out on something crucial: a strong, trusting relationship. You’ll be working with your builder for months or even years, making endless decisions together and experiencing a rollercoaster of emotions along the way. You want to have a trustworthy partner to walk this journey alongside you.
Great builds rely heavily on respect, open communication and mutual understanding - not just a number at the bottom of a page. At AMC it was just as important to us that our clients had chosen us for our quality and style of work, open communication, need for transparency and desire for mutual respect. If this wasn’t the case, we knew that we were both in for a world of pain.
The risk of quoting too late
It has been common practice in the past for homeowners to approach builders for a quote after their plans are complete. However, this runs the risk of finding out too late that the dream home you’ve fallen in love with, is way out of your budget. It has been reported that up to 40% of architecturally designed homes never go on to be built because the final design is way over budget.
That number is kind of shocking! So much disappointment and despair at lost time, lost money and shattered dreams. Interesting to note that up until this point in time at AMC we have not gone on to build any homes where we haven’t been involved in the design process from the outset. I’m sure our commitment to highly transparent pricing and cost estimates is what has led to this outcome.
So how can you make sure you’re not one of the 40%?
Well it’s fairly straightforward: choose first and design second.
What this means is you need to lock in your builder before you start designing. This will ensure that those top tier builders aren’t triaging you out. The best builders will always have enough work in their pipeline and enough high quality leads, that they don’t need to be spending unpaid time quoting on projects that have a low probability of leading to great work.
And the benefits for you of getting a builder involved early are:
Your choice of builder
Realistic and transparent budgeting from day one
Practical design advice to streamline the construction
Strong relationships built on trust
Time to understand each others communication styles
Better overall project outcomes
Still have questions? You can read more about this approach here where we step out how to assemble your design-build dream team.
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Feeling slightly overwhelmed about tackling this entire process alone? Then check out our House Plan Toolkits - the ultimate shortcut to making your dream home a reality.
Thanks for stopping by!
Until next time,
Susie x