Understanding Your Builder Tender: How to Read a Building Quote

A builder's tender (or quote) is a detailed document that specifies what you're getting for your money. Reading and understanding the tender is essential — it's the basis for your contract and your final price. A cheap tender may have low inclusions or underestimated costs; an expensive tender may include more. This guide helps you read a tender critically and compare tenders from different builders.

What a Tender Should Include

• House plan — the specific plan being quoted, with room sizes and layout
• Inclusions list — every item included in the price, with brands and specifications where applicable
• Specifications — construction details (ceiling height, frame type, slab type, insulation, etc.)
• Provisional sums — estimates for work where the scope isn't fully known (site costs, earthworks)
• Prime cost items — allowances for items not yet selected (tiles, tapware, appliances)
• Site costs — estimated costs for preparing the block (excavation, rock removal, retaining)
• Exclusions — what's NOT included (driveway, landscaping, fencing, GST, council fees)
• Total price — the full contract price, including or excluding GST (check which)
• Payment schedule — deposit and progress payment amounts and timing
• Construction timeframe — estimated start and completion dates
• Tender validity — how long the tender price is valid for (typically 30–90 days)

How to Compare Tenders

When comparing tenders from different builders, compare line by line — not just the total price. The cheapest tender may have lower inclusions, underestimated site costs or more provisional sums. Create a comparison spreadsheet:

• List every inclusion item across all tenders
• Note what each builder includes vs excludes for each item
• Compare provisional sums — which builder has higher/lower estimates?
• Compare prime cost allowances — which builder gives more for tiles, tapware, etc.?
• Compare site cost estimates — which is most realistic for your block?
• Compare the total price — but only after accounting for differences in inclusions
• Check for hidden costs — some builders add administration fees, council fees, etc.

Provisional Sums vs Prime Costs

Two types of allowances can increase your final price:

• Provisional sum — an estimate for work where the full scope isn't known at contract signing (e.g. site costs, earthworks, rock removal). If the actual cost is higher, you pay more; if lower, you pay less. See our Provisional Sums Explained guide.
• Prime cost item — an allowance for materials or items where the exact choice isn't finalised (e.g. tiles, tapware, appliances). If you choose items above the allowance, you pay the difference. See our Prime Cost Items Explained guide.

Red Flags in a Tender

• Site costs that seem too low — may be underestimated to make the tender look cheaper
• Very low prime cost allowances — $20/sqm for tiles when decent tiles cost $50+/sqm
• Vague inclusions — 'standard tiles' or 'standard tapware' without specifying brand/model
• Missing items — no driveway, no landscaping, no fencing listed (may not be included)
• Short construction timeframe — unrealistically short builds may be rushed
• High deposit — more than the legal maximum (5–10% in most states)
• No exclusions listed — every tender should clearly state what's not included
• Price valid for a very short time — less than 30 days may pressure you to sign quickly

Frequently Asked Questions