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Is a free quote unethical???

The Home Owner

The typical Kiwi-home owner plans a renovation and takes the next step by asking a few building companies for a free quote. After receiving the free quotes, a decision is made, and the winning builder is appointed to do the renovation.

So what is so unethical about this you might ask? After all, builders advertise free quotes, and it should be part of their service, and if they want the business, they should provide a free quote!!!

But what does a “free quote” really mean? Well, “free” is easy; it means “free” no cost. What does “quote” mean, better still what is the expectation of a quote? Should the homeowner accept this quote as gospel? Can the dream renovation be tied to the “free quote”, thinking that if the quote matches the budget, the dream lifestyle is within reach?

Unfortunately, this is where a lot of homeowners fall victim and become disgruntled, disappointed and stressed out. As the renovation progresses reality dawns! The “free quote” received lacks crucial details. This leads to budget overruns, variations, changes to the plans and delays to the completion date.

How did this happen?

The Builder and His "Free Quote"

A typical Kiwi builders day consist of three focus driven activities.

Priority 1 – Physical building, taking up 8- 10 hours of his day, 5 to 6 days of the week. Completing projects to receive payment.

Priority 2 – Keeping up with the routine paperwork of running any business. Making sure staff and sub-contractors are paid, keeping the taxman happy, dealing with councils, completing Work Safe NZ requirements, and so it carries on.

Priority 3 – Working on a free quote that will hopefully turn into a contract! The question to ask: How much quality time is a builder going to spend on a free quote where a slim chance exists for him to win some business? This “free quote” that a homeowner bases a renovation dream on? 

Kiwi builders are time-poor, and much-needed family or time with friends to relax and recharge has not even been taken into consideration. This brings us back to the builder’s Priority 3, which is definitely Priority 1 of the homeowner’s renovation dream.

The builder will make time to work on your “free quote” as this is important to generate income to cover future expenses. Most builders are well experienced and have a good feeling of what a project might cost. It is not uncommon for a builder to receive a minimum of three to five request per month for a quote. However, the majority of these request lead to nothing. Builders will tend to “give it a go”, “You never know it just might be the next project”. The reality is with current building laws, building standards, materials and products used in the building industry, the quoting proses is not as straightforward any more.

In 2001, building a double story 260 m2 house on a sloped site, required a set of plans consisting of five pages. Today, the plans of a single 35 m2 garage, on a flat site, can consist of nine pages and sometimes even more. A builder has to consider the detailed plans, determining the execution, materials and labour of every specified detail. The complexity of a project will determine the time required to do a professional quote. Typically 80 to 120 hours’ worth of time is required to prepare a professional, detailed quote. Understandably, to provide a “free professional quote” would be a big ask of any Kiwi builder.

“Free quotes” are mostly reliant on a quick plan evaluation, comparisons with a few similar projects done before, double-checking it against some square meter rates, add a gut feeling risk percentage, and come up with a number. These quotes can 5 consist of a one-liner, sometimes a few pages with generic information but without the crucial details, important to the homeowner’s specific renovation.

No renovation is 100% identical, and the cost of every project will vary. Making projects comparisons and the use of historical data, inaccurate. Site conditions, the homeowner’s lifestyle and routine, age and structure of the house and finishing details are all crucial factors playing a significant role in the renovation.

As with the rest of humanity, builders only have 168 hours per week to live work and play. Inevitably this begs the question of how much quality time is a builder going to spend on a “free quote” that there is a small chance of winning.

The Impact of a “Free Quote”

Unfortunately, the reality is that the first dollar figure a homeowner hears, even if it is provided as an indicative ballpark figure only, becomes gospel. The anchor number of the renovation and what homeowners expect to see, the ballpark figure, becomes the bottom line of their renovation quote.

The homeowner has received a “free quote” which is gladly accepted as it matches the budget expectations. The homeowner also has faith in the builder, as a family member or friend referred him or he is just simply “a local friendly builder”. Needless to say, relevant information was overlooked, the quote was not based on the detail specifications of the relevant renovation, and this will cost the homeowner, financially and emotionally.

The homeowner should be ready to pull the money canon, to fire at endless variations, re-designs, design errors, and time delays. The withdrawals from the “emotional bank account” will change the dream into a nightmare experience!

The question has to be asked, how unethical is it for a builder to provide a “free quote” that will lead the homeowner down figurative garden path? Is it not better for any homeowner to know what their renovation is going to cost in the beginning rather than finding out halfway, that the actual cost is going to be significantly higher? Or a builder starting the renovation project runs out of money halfway, leaving the project uncompleted.

Do You Want To Avoid the Risk?

Construction has a lot of moving parts and all these parts need to come together in a specific time frame and planned manner. Therefore it is super important that you carefully select a builder with a pre-construction phase process in place. This will assist and prepare you for the actual renovation, saving you from all the building horror stories. The aim of the pre-construction process is to provide the homeowner a stress free renovation experience. A professional builder will be able to demonstrate the effectiveness of his process and in turn, justify his fee.

As a member of the New Zealand Certified Builders and the Association of Professional Builders, NEDS Projects is uniquely situated and experienced to be able to offer you everything you deserve from a professional builder on the Auckland North Shore. Check out our website at www.nedsprojects.co.nz, or contact us on 0800 633 370 for a no-obligation discussion.

As a member of the New Zealand Certified Builders and the Association of Professional Builders, NEDS Projects is uniquely situated and experienced to be able to offer you everything you deserve from a professional builder on the Auckland North Shore. Check out our website at www.nedsprojects.co.nz, or contact us on 0800 633 370 for a no-obligation discussion.

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