Building Costs and Contracts: How to Compare Quotes and Avoid Disputes

Key points

• The cheapest quote is not always the best value. A low price often means something has been left out or the scope is unclear, and the gap shows up later as an unexpected bill.
• Quotes are only comparable if they cover the same work. Put the same drawings and specification in front of every builder.
• Provisional sums are placeholders, not prices. The more of them a quote contains, the less fixed the price really is.
• The groundwork before work begins, meaning scope, contract and payment terms, matters more than almost anything you can do once the build is under way.
• Understand what a change will cost before you agree to it, not after the invoice arrives.

Why the lowest price can cost the most

A building quote is a description of work with a price attached. When two quotes differ by a large amount, the difference is rarely that one builder is simply more efficient. More often one of them has priced less work, priced the same work vaguely, or pushed the uncertain parts into allowances that will be settled later. Episode 9 of The Healthy House Podcast, with quantity surveyor Fiona Hall of Construction Q, makes this point directly: when costs are unclear or work has been left out, the cheapest quote can turn out to be the most expensive one.

That doesn’t mean paying more is safer either. It means the number on the front page is the least useful thing to compare.

How to compare quotes like for like

Start from a single set of documents: the same drawings, the same specification and the same list of what you expect to be included. Ask each builder to price against those, and to say clearly what they have excluded. Then lay the quotes side by side and look for:

• work one quote includes that another doesn’t mention at all
• items described in general terms (“allow for electrics”) rather than specifically
• provisional sums, and how large they are relative to the total
• who is responsible for things that often fall between trades, such as making good, waste removal and scaffolding

If the project is large or complicated, this is exactly the job a quantity surveyor does.

Provisional sums: what they really mean

A provisional sum is an allowance for work whose cost isn’t known yet, usually because a decision hasn’t been made or the work can’t be measured until something is opened up. It is a legitimate and sometimes unavoidable part of a quote. The risk is treating it as a firm price. The final figure can go up or down, so ask what decision or discovery will settle each one, and who carries the risk if it comes in higher.

Scope, contract and payment terms

The most consistent message from the episode is that the groundwork before work begins protects you better than anything you do once the build is under way. In practice that means three things written down before anyone picks up a tool:

1. Scope: what is being built, to what standard, and what is not included.
2. Contract: who is responsible for what, and what happens if the work changes or runs late.
3. Payment terms: how much is paid, when, and against what.

Most disputes trace back to something that was assumed rather than agreed. Settling these in advance is the cheapest protection available.

Changes during a build

Changes are normal. The problem is agreeing to them casually. A small alteration can affect other trades, the programme and the budget, and the cost is much harder to challenge once the work is done. Ask for the price, and the effect on timing, before you say yes. A clear original scope and contract make this far simpler, because everyone can see what the change is a change from.

Where damp, ventilation and building health fit in

Cost advice and building health meet more often than people expect. Work that looks cheap at quote stage, such as insulation, airtight upgrades or new windows, can create moisture problems if ventilation isn’t considered alongside it. Our guide to condensation and ventilation explains why, and the host of this podcast, Weather Wise Solutions, is a damp, mould and condensation specialist whose surveyors see the results of poorly scoped work first-hand. If you are pricing a project on an older or problem property, getting the damp diagnosis right before you agree the scope is one of the most valuable things you can do.

Listen to the episode

Episode 9, “Before You Build: The Advice That Could Save You Thousands”, is about an hour and twenty minutes. It is for anyone comparing quotes before a renovation or extension, for small contractors who want to understand the cost and contract side of a project, and for anyone curious about a career in construction.