What is a building quote?
A building quote is a builder's or tradesperson's estimate of what a job will cost, based on the scope of work described at the time. Unlike a fixed-price contract, a quote can usually still move — up or down — once work uncovers something the original scope didn't account for.
The number at the bottom of the page is only as reliable as everything written above it. Two quotes for the "same" job can differ by tens of thousands of dollars because of what each one includes, excludes, or leaves as an allowance rather than a fixed cost.
When you'll come across one
You'll receive a building quote for renovations, extensions, new builds, and most substantial trade work — plumbing, electrical, roofing, landscaping. Larger jobs are often followed by a formal building contract that incorporates the quote by reference, so it's worth getting the quote right before that happens.
It's normal, and sensible, to compare multiple quotes for the same job. Comparing them properly means looking past the total and into what each one actually includes.
Key terms to know
- Provisional sum
- An estimated allowance for work that can't be priced exactly yet — for example, unknown electrical work behind a wall. The final cost may be higher or lower once the work is done, and you're usually responsible for the difference.
- Prime cost (PC) item
- An allowance for a specific product you haven't chosen yet — tiles, tapware, fixtures. If you choose something above the PC allowance, you pay the difference.
- Variation
- A change to the agreed scope of work after the quote is accepted — whether requested by you or required because of something discovered on site. Variations usually need to be agreed and priced in writing before the extra work starts.
- Allowance
- A budgeted amount for an item or task rather than a fixed, guaranteed price. Allowances are one of the most common places a final bill ends up higher than the original quote.
- Practical completion
- The point at which the work is finished enough for its intended use, aside from minor defects. It usually triggers a final payment stage and starts the defects liability period.
- Retention
- A percentage of the payment withheld until defects are fixed or a set period has passed, giving you leverage to have issues corrected after the main work is done.
- Defects liability period
- A set window after completion (commonly three to twelve months) during which the builder is responsible for fixing defects that appear, at no extra cost.
- Scope of works
- The detailed written description of exactly what is, and isn't, included in the job. If it isn't in the scope, it isn't included in the price — regardless of what was discussed verbally.
What to check before you agree to anything
Vague or unusually large allowances
An allowance that's noticeably lower than realistic market pricing for that item is a common way a quote looks cheaper than the job will actually cost.
Exclusions buried in the fine print
Site access, waste removal, permits, and making good after trades are common exclusions. If they're not explicitly included, assume they're not — and ask.
A front-loaded payment schedule
Payment stages that require a large percentage before work has actually progressed that far are a red flag. Payments should broadly track the value of work completed.
Missing scope items you assumed were included
Compare the written scope against everything you discussed in person. Verbal inclusions that never made it into the document aren't part of the deal.
Broad, one-sided variation wording
Look for language that lets the builder charge for variations without your written agreement first. Variations should be quoted and approved before the extra work starts, not invoiced after the fact.
No stated defects liability period
If the quote or contract doesn't mention what happens if something goes wrong after completion, ask directly — don't assume a standard period applies.
Questions worth asking first
- Which specific items in this quote are allowances or provisional sums rather than fixed prices?
- What's explicitly excluded from this price?
- How and when will variations be priced and approved before extra work begins?
- What does the payment schedule look like, and does it match the stages of work?
- What's the defects liability period, and how are issues raised during it?
Frequently asked questions
What's the difference between a quote and a fixed-price contract?
A quote is an estimate based on the scope known at the time and can still move if that scope changes. A genuine fixed-price contract commits to a set total for defined work, with variations handled separately and explicitly.
Can a builder just increase the price after I accept the quote?
Not for the agreed scope of work — but allowances, provisional sums, and legitimate variations (extra work, unforeseen conditions) can legitimately move the final price. This is exactly why reading those sections carefully matters.
What is a provisional sum and why does it matter?
It's a placeholder estimate for work that can't be priced precisely yet. It matters because the difference between the provisional sum and the actual cost is usually your responsibility, not the builder's.
Should I pay a deposit before work starts?
A modest deposit is normal in most jurisdictions, but a very large upfront payment relative to the total job value, before any work has begun, is worth questioning.
What happens if the final cost is higher than the quote?
It depends on why. Costs tied to allowances, provisional sums or approved variations are typically payable. Costs outside the agreed scope, without your written approval, generally are not — which is why keeping variation approvals in writing matters.
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Related guides
This guide provides general information and is not professional legal, financial or other advice specific to your situation.