10 Questions Every Custom Home Builder Should Answer Before Trusting An Estimate (If You’re Not Completely Confident In Your Estimating Process, Start Here.)

Can you explain where every number in your estimate came from?

 

• Can you tell whether a $30,000 subbie quote is fair without ringing around for three more prices?
• Do you know exactly what’s included in that quote? 
• And when the proposal finally lands in front of the client, do they understand the number well enough to feel comfortable saying yes?

If any of those questions make you hesitate, this is a good place to start.

Below are ten questions I think every custom home builder should be able to answer before trusting an estimate. You’ll get the short answer here, along with a link to the full breakdown if it’s an area you want to look at more closely.

 

Can You Trust What You’re Measuring?

 

Before you worry about margins, supplier prices or winning the job, you need to know that the number is built on the right quantities in the first place.

These first three questions are really about whether the information underneath your estimate can be trusted.

 

Question 1: Why Can’t I Just Estimate From The 2D Plans I’ve Already Got?

 

You can, and builders have been doing it for years.

The issue is that you’re often working across architectural plans, engineering, interior drawings and other documents, and you’re relying on all of those pages to agree with each other.

Sometimes they don’t.

We once modelled an upper-storey addition where the stairs fitted perfectly on the floor plan. Once everything was brought together in the model, we found a problem underneath the landing that wasn’t obvious on the flat drawings.

That’s the value of bringing the documents together before the problem reaches site.

See where 2D plans can hide the problem: The #1 Estimating Mistake Silently Draining Your Building Profits

 

Question 2: What’s The Difference Between A 3D Render And A 3D Construction Model?

 

A render is there to help somebody picture what the finished home will look like. A construction model needs to show how that home actually goes together.

That means the timber, brackets, connections and structural elements somebody eventually needs to measure, price, order and build.

The simplest way I explain it is that a render shows you the home, while a construction model helps you build it.

They can both look impressive on a screen, but only one of them is designed to help answer construction questions before somebody has to solve them on site.

See why that distinction matters: 5 Costly Surprises Builders Face When They Rely on 3D Renders

Question 3: How Do I Know I Can Trust The Numbers Without Giving Up Control Of My Pricing?

 

You shouldn’t have to give up control of your rates at all.

There are really two parts to the number. First, you need to know how much of everything the job requires. Then you decide what those quantities are worth to your business.

Our job is the measure and the count. Your rates, margins and final pricing stay yours.

The important part is being able to trace a quantity back to where it came from. If somebody gives you a number, you should be able to see why it’s there rather than simply taking it on faith.

See how to check where the quantities came from: The Most Expensive Mistake Builders Make Before a Job Even Starts

 

Can You Trust The Process Behind The Number?

 

Getting the quantities right is one part of estimating. The next question is what happens around them.

This is where a perfectly good builder can still lose a surprising amount of time and margin through weak allowances, scattered pricing information, unnecessary rework and manual processes.

 

Question 4: Where Do Budget Blowouts Usually Start Before Site?

 

Often, it’s with the things that looked too small to worry about individually.

A bracket isn’t expensive. Neither is a box of screws, a joist hanger or a tube of epoxy. But there can be a lot of them across one project.

That’s why an allowance can look perfectly reasonable until you start breaking down what actually needs to come out of it.

One builder we spoke to discovered that the brackets alone had already swallowed an allowance he’d expected to cover far more.

The individual items were small. The total wasn’t.

See where those small allowances start eating margin: The 3 Budget Blind Spots Most Builders Don’t See Coming

Question 5: Do I Really Need A Price Book, Or Can I Keep Estimating From Scratch?

 

You can keep estimating from scratch, but you’re probably rebuilding a lot of information your business already knows.

A renovation and a new home might be completely different projects, yet both are still likely to contain concrete, reinforcing, plasterboard, roofing, timber, carpentry and tiling.

I’d put roughly 60 to 65% of a project’s cost in that repeatable category.

If you’ve already priced those things before, the question becomes whether you want that knowledge sitting in one place ready for the next job, or whether you want to go looking for it again.

See how much of your next estimate you may have already priced: Why Estimating from Scratch Is Costing You Thousands

Question 6: How Do I Know Whether A Subbie Or Supplier Quote Is Actually Right?

 

You need something more useful than a gut feeling to check it against.

Say your concreter comes back at $30,000 and your instinct says it should be closer to $20,000. Your gut may be telling you something important, but now you’ve still got to work out why the numbers are so far apart.

If your own pricing information tells you the work should be somewhere around $28,000, that’s a very different conversation.

Now you have a benchmark. You can ask better questions and decide whether the quote makes sense without automatically starting another round of phone calls.

See how to build your own benchmark: Why Estimating from Scratch Is Costing You Thousands

Question 7: Can I Outsource Estimating Without Losing Control Of My Pricing?

 

Yes, because outsourcing the measuring doesn’t mean outsourcing the commercial decisions.

I look at estimating as two jobs: counting and costing.

Counting is working out how much of everything the project needs. Costing is deciding what those quantities are worth to your business and what you’re going to charge the client.

A builder can hand over the hours spent measuring and counting while still controlling their rates, margins and final proposal.

If you’re currently doing that measuring at the kitchen table after a full day on site, that’s an important distinction.

See what you can outsource without giving up control: Burned Out by Late-Night Estimates?

Question 8: Why Am I Still Retyping My Estimate Into My Project Management Software?

 

You shouldn’t have to rebuild information you’ve already paid someone to create.

Once a job has been measured and estimated, that information should be able to keep moving through the business. Our estimates can go into project management systems, including Wunderbuild™, without somebody sitting there typing the quantities in again.

Apart from the time involved, every manual transfer gives you another opportunity for a quantity to be mistyped, grouped incorrectly or lost along the way.

Ideally, the way you estimate the job should help the team that eventually has to build it.

See where manual handover starts costing hours: Still Manually Transferring Estimates?

Can Your Client Trust The Number Too?

 

You can have an accurate estimate and still make the client nervous.

These last two questions are about what happens when all of that estimating work reaches the person you’re asking to sign the contract.

Question 9: Should I Really Be Charging For Quotes And Proposals?

 

There’s no such thing as a free quote because somebody is still paying for the time that goes into producing it. Quite often, that’s the builder.

If a proper proposal takes a week of work, that’s around 40 hours you’ve invested before the job exists.

Charging for that stage gives you more room to investigate the project properly, answer the client’s questions and replace assumptions with actual information.

It also helps establish whether the client is serious enough about the project to invest in getting the answer right before construction starts.

See what a “free quote” is really costing you: What Smart Builders Know About “Free Quotes” That You Don’t (Yet)

Question 10: What Makes A Quote Easier For A Client To Say Yes To?

 

You can’t control the client’s budget, family situation or timing, but you can control how much uncertainty you’re putting in front of them.

One of the biggest sources of that uncertainty is a proposal full of allowances and provisional sums.

Sometimes they’re unavoidable, particularly on a complex project. But every provisional sum is still something neither side knows for certain yet.

The more of those unknowns you can resolve before the proposal goes out, the easier it is for the client to understand what they’re being asked to commit to.

We’ve seen quotes with 25 provisional sums and others with five. They create a very different feeling for the person sitting on the other side of the table.

See why provisional sums can make clients hesitate: Why Clients Go Quiet After Your Quote and the Two Words Usually Responsible

So, Where Does Your Own Estimating Process Stand?

 

If you got through those ten questions and found yourself thinking, “We don’t really have that sorted,” more than once, that’s worth looking at.

Those gaps have a habit of showing up elsewhere in the business. You spend more time chasing information, checking numbers again, re-measuring work, answering questions on site or absorbing costs that weren’t properly allowed for in the first place.

So the next useful question is what those gaps are actually costing you.

We’ve put together a short quiz to help you work that out:

The Small Mistakes, Big Money 3-Minute Quiz

A few quick questions will show you:

• How much time your current estimating process and the errors that slip through it are taking each year
• What those avoidable errors are costing you in dollars
• Where to start improving the process

You’ll finish with a free, no-obligation report showing the financial impact of your current process, along with practical steps to improve accuracy and profit.

Start the quiz now

It takes about three minutes, and you’ll come away with a much clearer idea of which part of your estimating process deserves your attention first.