Let’s say a customer wanted to construct a home. After going through with the plan and the idea as to how a contractor can build his home, he asked about their new home construction service costs. One contractor might say, “Let me send you the estimate cost now and the quote later.” The customer nods his head, but he was little confused between quotes and estimates.
Has this situation ever happened to you? If you’re planning new home construction, it very well could. People often get confused about construction quotes and estimates. You could directly ask the contractor, or you could also search to get a clearer idea about the differences between the two. Getting all the necessary information about quotes and estimates is crucial to learn the true cost of your new home construction.
We’ve made it easy for you to understand with our step-by-step construction quote vs. construction estimate guide below.
First, what exactly are estimate and quote costs?
The estimated new home construction cost is just an idea based on the limited information from which the contractors decide the price. Contractors generally estimate raw cost based on materials, direct labor, sub-contractors, and equipment. It is usually done before you prepare all the details. Until then, the estimate can vary according to your demands. Afterward, contractors can also add additional overhead, profit, and taxes to develop an estimated selling price. For a customer, it’s really just a starting point in terms of costs, which can vary.
A quotation is an exact, often fixed price that can’t be changed once it’s accepted by the customer. The construction quote can only change if the customer has changed the scope of their work demands. Customers can rest assured once the contractor provides a quotation, since that’s the most accurate projected cost before the work begins.
What are the advantages of construction quotes and estimates?
- You can easily get a general idea of what the project will cost.
- Homeowners can make a decision easily when it comes to selecting the contractor. They’ll get an opportunity to search out and ask multiple contractors about this projected cost.
- It creates awareness among homeowners regarding how the contractors will build their home within the estimated budget.
- Construction quotes are based on the actual labor and material costs.
- You’ll get a clear understanding of your construction investment vs. your budget.
- Homeowners get a good chance to evaluate the contractor’s competence in project management.
- Homeowners are free to choose all the materials according to the quoted price.
- The contractor has to evaluate how much of the work process is designated in the contract.
As a result of these subtle differences, you should check out the work process cost of multiple contractors. Once you learn about their new home construction service costs, you can select your new home builders more easily. You can also check out our detailed new home construction estimate guide.