Welcome to Home Building Like a Boss, the podcast dedicated to helping first home buyers in Perth  build their dream home with ease and excitement.  I'm Jaimi, your host and go to building broker.  Are you ready to feel empowered, in control and excited about your building journey? I'll help guide you with expert advice, insider tips and tricks and real life stories to help you navigate the confusing world of home building.

Tune in as I take you on the journey to building your home, like a boss. 

Hello, and welcome back to the podcast this week. I am going to help you understand how to break down and read your builder's quote. Now, this can be very, very confusing and very, very overwhelming.  Especially when you don't have a full understanding on how to read the paperwork, builder's lingo. There's a lot of things to think about.

I would say one of the first mistakes that a lot of people do, they get the quote, they go right down to the bottom, they read the final price and then they're like, Oh, it's more expensive or it's cheaper. But you actually have to dive in and break down your builder's quote to compare apples with apples, not apples and oranges.

A lot of people compare apples and oranges looking at builder's quotes, especially different builder's quotes, because they're looking at different specs, different floor plans, different sizes. Now, when you break down comparing apples and apples, you need to understand what's included in the spec, which is the specification. 

In those inclusions with two builders, you know, do both have blinds? Do both have painting? Do they both have high ceilings? Do they both have 600 by 600 floor tiles? Or does one have 450 and one have 600? One has painting, one doesn't have painting. Does the garage 25 course, but then in one it's 28 course, you know, there's, it's very, very easy because no builder is the same, no quote is the same, no floor plan is the same to compare apples and oranges.

You need to break it down to compare apples and apples. Now, with understanding and reading builders quotes as well, that is also super confusing. And this also comes in with builders marketing and etc, etc. When you have a quote, it can be listed out and worded in a hundred different ways, right?

You can have the base price of the house. So option a, the base price of the house is. 300, 000, right? And 300, 000 is base inclusions, doesn't really include much, you know, it doesn't have flooring, air comp, lines, stone, nothing. So your base price of that is 300, 000 for option A and it's written at the top of the quote base price 300, 000 then it'll list out and Variations slash inclusions or additions that can kind of be worded in quite a lot of ways.

It's not a variation in a sense You're paying because you've made a variation or a change. It's a variation to the base price of the house, which is written at the top. So then that lists out 31 course high ceilings in your living, air con stone, painting. Blinds, flooring, all that kind of stuff. It then lists out your specifications in the variations and the additions.

Now let's say for math purposes, keeping it really simple. All those additions were 20, 000. So option eight is 300, 000, 20, 000 for your variations. And then it will have listed your site works breakdown. So it'll show your site works and it'll have everything there. And then the total cost for your site works, obviously that depends on your area and your block for rough numbers.

We're going to use 30, 000 for your site works. So your total build cost is 350, 000. Now it's written with your base price of 320, 000  worth of variation slash inclusions. And finishes, and then your site works Breakdown. That is one example on how a builder can list out your quote. Now, I'm gonna give you an example for option B, which is actually the exact same price, but they've written the quote in a different way.

Now, the base price of the house is 320, 000 and it includes all the same inclusions as option A. Air-con, high ceiling, stone, flooring, painting. Everything included, but the base price is 320, 000 and in your variations and additions it lists everything out, but all it says next to it is included. Included, included, included.

That means those prices are included in the base price of the house. Now, can you see the difference here? It's obviously a little bit hard because you're listening to me and you can't see it, but option A, the base price was 300, 000 with 20, 000 of variations. Now, Option B is 320, 000 base price and everything is included, but the cost of the house with the same inclusions is still 320, 000 and then your site works, so your total cost is 350, 000.

The builder has just written the quote in two different ways. Now this trips up quite a lot of people because they're like, Oh, well, my  inclusions aren't included. And it's like, they are included. The quote is just written differently. And the person that has quote B with 320, 000, it's all included option.

I you're paying the same price as option B. They are just written differently. Builders are not giving away anything for free. And this ties in with builders, marketing and sales tactics, which you can listen to is one of my very couple of first episodes. It's free air con. Let's say for example, it's hidden in the base price of the contract an extra 10 grand for air con and they're telling you it's for free because those Inclusions are in the base price of the house and they've written the quote that way so it's hidden You can't see that price option A has written three hundred thousand for the base price of the house then listed the cost for all your additions air con stone High ceiling seven grand here ten grand here five grand here This is how much painting is versus having it 320, 000 all in the base price of the house, but it works out to be the exact same cost.

I have so many clients and people that come to me and they get tripped up the difference in how quotes are written out and why things are in quotation marks included and not included. It's literally just how the builders have written the quote. You are still paying for it somewhere. Either way, either paying for it in the base price of the house.

Or you're paying for it in the additions, inclusions, variation section. So either way, you will always pay for things. If you go for the top spec, it's going to be more expensive than the bottom spec. If you choose the bottom spec, the inclusions are less, therefore it costs less. So that's why the price is less.

If you pick the top spec, it costs more than the bottom spec. So you're going to be paying more. It's just written differently. Understanding how to read that and know your base price, your variations and your site works to get your total price is so important when you're having a look at your builder's quote and understanding apples and apples do not compare apples and oranges and you know a really good way to do this is obviously making sure, okay, flooring, blinds have got the same inclusions, okay, cool, one has painting, one doesn't have painting, 10 grand approximately for painting, let's add it on here so you can work it out.

And you know, this is the part of also having a building broker that's working for you is I help you understand that part of the process. I'm there breaking down the quotes. So yep, painting roughly cost this much here. This one doesn't have painting here. How does that work? How does that look? Getting it apples for apples.

And then what you want to do is understand the average per square meter rate in the quote. So if your house is 320, 000. You don't want to include site works when you're working out this breakdown. So it's 320, 000. Then let's say your floor plan is a hundred and I don't know, 80 square meters. Let's say random number.

You want to go 320, 000 apples and apples, same price. Divide  180 square meters equals 1, 777 per square meter. And then you want to look at the other quote and be like, cool, the other quote is It's 330, 000 but doesn't have painting so I need to add another 10 grand to factor that in. So that's now 340, 000 with painting which is rough apples for apples.

So 340, 000 for painting and that square meterage is 187  square meters. That square metre rate is 1, 818  per square metre. So now you have an average of, okay, cool, this plan here roughly costs this much per square metre, and this one costs this much per square metre. Because you might be looking at two different floor plans, but one is  180 square metres and one is 193 square metres.

And you're wondering, why do they cost more? Well, the one that's 193 square meters costs more, but it might have a lower per square meter rate. So the value for money is better than the one that's 180 per square meters. As long as you're comparing apples for apples, it doesn't work. If you're looking at one.

Speck that has heaps of things included and one that doesn't, you need to understand breaking it down to apples and apples, taking things out or adding things in to make sure they're the same to then break down the average per square meter, right? So you can say, okay, cool. This full plan is bigger and it costs more obviously because it's bigger, but the average per square meter rate is less than the smaller house, which is cheaper.

But if I make that house the same size, This one is going to be better because it's better value for money on an average per square meter, right? It is super confusing understanding building lingo, building prices, building quotes, building specifications. And that's, you know, that's one of the benefits of having a building broker is I'm there to help you understand that part of the process and make sure.

You get looked after, you know, when you're looking for a builder, there's three things you want to consider time frames, quality, and price. And if you tip the scales too far one way, you will lose out on something else. If you go for the cheapest quote, it is never the best deal. You will lose out on your quality or your time frames because the builder might not be paying trades, correct rates.

Trades are working for other builders for more money. Therefore they don't have trades on site. Therefore your job will take longer to build. Or it's bringing in lower quality trades. Therefore your quality for the house is less than what they would for other builders who are paying trades a little bit higher.

The cheapest deal is never the best deal. And it's hard. You know, if the quote is too good to be true, it probably is too good to be true. You want to consider time frames, quality and price and understand apples and apples and work out how to break down your builder's quote and understand that, you know, builders don't give away anything for free.

You can have the same price. You can write out that same quote for the same price, five different ways. And it's going to tell you all different things, but at the end, the figure is always going to be the same. It's just the way the builders priced it. in the base price or not in the base price of the house.

If you need some help with this understanding a builder's quote, or you have some questions around pricing, inclusions, specifications, booking a discovery call and the show notes below, and we'll be able to help you.  Thank you so much for tuning in to the home building like a boss podcast.  I hope you enjoyed today's episode and learn something new.

Remember you've got this and I've got your back until next time stay inspired. Stay informed and stay confident on your building journey. I can't wait to chat with you on the next episode.  Don't forget to check out the show notes for more information and free resources. If you haven't already hit that subscribe button.

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