You've sent your specification to three builders and the quotes have come back. One is £52,000. One is £68,000. One is £81,000. The temptation is to pick the middle one and feel like you've done due diligence. That's not how it works. The numbers mean nothing until you understand what each quote actually includes, and right now, you almost certainly don't.
The Like-for-Like Problem
Comparing builder quotes is genuinely difficult, because every builder prices differently. One may include all materials. Another may include labour only. One may have assumed timber joists where another has priced steel. One may have included a contingency for unforeseen works. Another may have made optimistic assumptions about ground conditions that will unravel the moment they start digging.
The only way to compare quotes meaningfully is to get all three against exactly the same specification document, and then to scrutinise what each quote includes and excludes against that specification. This takes time. It's worth it.
What to Check in Every Quote
Is VAT included? A quote that doesn't mention VAT is almost certainly exclusive of it. At 20%, that's £10,000 on a £50,000 quote. Ask explicitly if VAT is included and get the answer in writing.
What materials specification has been assumed? If your brief specifies premium materials and the quote says "supply and fit kitchen" without specifying what's being supplied, the cheapest option is probably assuming the cheapest kitchen. If you later want to upgrade, that's a variation order at extra cost.
What is explicitly excluded? A good quote lists what it does not include as well as what it does. Exclusions to watch for: groundworks, scaffolding, skip hire, decoration, floor finishes, sanitary ware, kitchen appliances, electrical fixtures, building regulation fees, structural engineer's fees.
Are provisional sums included? A provisional sum is an allowance for work whose exact cost isn't yet known: for example, "provisional sum of £3,000 for groundworks, subject to site investigation." This is legitimate and sensible. But provisional sums can be used to lower the headline figure for quoting purposes, with the expectation that they'll be exceeded. Ask what assumptions underpin any provisional sums.
What's the payment schedule? If a quote demands 50% upfront, that's a red flag regardless of the headline price. A reasonable payment schedule follows actual progress on site.
Why Low Quotes Happen
There are several reasons a quote might be significantly lower than others, and most of them are problems:
- The builder has misunderstood the scope and priced less work than you want done
- The builder is under-pricing deliberately to win the job, intending to recoup through variations during the build
- The builder has made optimistic assumptions about site conditions, programme or material costs
- The builder is cutting costs on quality: using cheaper subcontractors, thinner material specs, or faster construction methods
- The builder is new to this type of work and genuinely doesn't know what it costs
None of these lead to a better project. The low price is not a saving. It's a risk.
The right question isn't "why is this one cheaper?" but "what does this contractor understand about my project that's different from the others?" Ask them directly. A good contractor will be able to explain exactly why their price is what it is.
Clarification Meetings
Before making a decision, hold a brief meeting (in person or by video call) with each shortlisted contractor to go through their quote line by line. Ask about every assumption. Confirm what's included. Get exclusions documented. This process will often change the price, as contractors identify items they've missed or you clarify a spec they'd misunderstood.
After clarification meetings, the spread between quotes often narrows considerably, because you're now comparing like with like. The contractor who quotes you £81,000 might come down to £72,000 once you've removed an item they included that others excluded. The one who quoted £52,000 might revise to £65,000 once you've pointed out the items they missed.
Estimates vs Quotes vs Tenders
These words are used loosely but they mean different things:
An estimate is an informal, approximate figure. It's not a commitment. Estimates are appropriate for initial ballpark discussions but should not be the basis for a contract.
A quote (or quotation) is a fixed price for a defined scope of work. If you accept it, the contractor is committed to that price for that scope. Changes require variation orders.
A tender is a formal submission against a detailed specification, usually as part of a competitive process managed by a professional (architect or quantity surveyor). Tenders are more structured and comparable, which is exactly why larger projects use them.
If a contractor gives you a "quote" that says "approximately" or "subject to survey" throughout, it's really an estimate. Treat it as such.
After You've Chosen
Once you've selected your contractor, the quote forms the basis of your contract. Make sure it's incorporated into or annexed to the contract document, and that the contract specifies the exact documents (drawings, specification notes, the quote) that define the scope. Ambiguity at this stage is expensive ambiguity later.