Five mistakes clients make when they pursue free estimate

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May 12, 2024

When planning your dream home, it’s tempting to accept a free estimate to determine construction costs. Often, however, free estimates do not provide a comprehensive assessment of project costs. Remember, a dream home is about getting exactly what you want and need, and trying to reduce upfront costs can sometimes cut out critical planning steps that create compounded problems once the project is underway. Don’t compromise your vision by solely focusing on upfront costs. While a comprehensive estimate may not come free, it’s a worthwhile investment in turning your custom home dreams into reality without unexpected expenses. 

Five Common Mistakes

1. Ignoring the True Cost of Inaccurate Estimates

Opting for a free estimate may seem like a cost-saving measure initially, but it often leads to inaccurate budget projections due to the lack of time and care put into the estimate. If businesses are giving away estimates for free, then they are incentivized to reduce their overhead costs in doing so. This creates a prime opportunity for careless mistakes, quick and inaccurate work, and superficial considerations of project logistics. The risk of underestimating the true cost of the project can result in budget overruns and financial strain as unforeseen costs arise during your home construction.

2. Overlooking Potential Risks and Challenges

Free estimates typically lack the detailed analysis, site preparation, and assessments necessary to identify potential risks and challenges early on. Clients who take shortcuts through the initial comprehensive planning may encounter costly surprises later, like structural issues or zoning complications.

3. Sacrificing Build Quality for Short-Term Savings

Choosing a free estimate over paid pre-construction planning may save money upfront, but it often comes at the expense of project quality. Without proper planning, the risk of cost overruns increases, which is often met with suggestions to reduce costs elsewhere in the project. This can include using lesser-quality materials or construction methods, leading to inferior results.

4. Neglecting Regulatory Compliance

Free estimates typically do not include the thorough review of building codes, permits, and regulations necessary for compliance. Clients who forego this step expose themselves to legal liabilities, fines, and project delays due to regulatory violations.

5. Underestimating the Importance of Collaboration and Communication

Pre-construction planning involves extensive collaboration between the clients, designers, engineers, and contractors to ensure alignment and clarity on project goals and requirements. Clients who opt for a free estimate often miss out on this crucial communication, increasing the likelihood of misinterpretations, conflicts, and costly change orders during construction.

Prioritizing thorough pre-construction planning and establishing a solid foundation are key to a successful construction project. Investing in an estimate from experienced builders saves time, money, and ensures a smoother process. It’s important to remember that decisions made on paper are much more affordable to make than decisions on site!

What makes a comprehensive estimate?

A comprehensive estimate goes beyond the basic figures to provide a detailed cost analysis of your construction project. This costing exerciseencompasses everything from an in-depth analysis of the square footage, material and labour costs, and construction scheduling and logistics. 

Unlike a quick, free estimate, a comprehensive estimate is crafted to consider all aspects of the project, including regulatory compliance, site coordination, consultant and sub-trade costs, and design preferences. It serves as a tool for ensuring that all project stakeholders clearly understand the scope, timeline, and budget, facilitating effective communication and collaboration from the outset.

Investing in a comprehensive estimate is an important step needed to approach your project practically and with care. It is one of the best planning tools available to reduce costs on site and to anticipate and avoid costly mistakes. 

Understanding the Various Estimates

At Blue Water Concepts, we offer two types of estimates throughout our pre-construction process. Each serves a purpose and is integral to our projects. Let’s review the four types of estimates you can receive as a client, and discover why we focus on Class B and Class D estimates.

Class “D” (Indicative) Estimate*

The purpose of this estimate is to provide a feasibility study: whether a project is even possible for a client to pursue further. It uses broad data sets to get a ballpark idea of what a project costs. It’s helpful to undertake this relatively high-level cost exercise to understand the general cost implications of a project before committing more time and money to developing a design. A Class D estimate aims to work within a margin of 20% of the final project cost. 

Class “C” Estimate

This estimate is more detailed than a Class D estimate, in that it considers a preliminary design to get a better understanding of the materials involved in construction. It is detailed enough to make certain investment decisions, but relies on allowances from data sets for items such as finishes or subtrade quotes. A Class C estimate is designed to land within a margin of 15% of the final project cost.

Class “B” (Substantive) Estimate

This estimate establishes realistic cost goals for project approval based on design drawings, specifications, and site investigations. It includes measured quantities of work items, but still relies on data sets for subtrade costs. A Class B estimate is built to land within a 10% margin of final project cost.

Class “A” (Pre-tender) Estimate

This estimate is based on finalized construction drawings and specifications. It takes into account solidifed quotes from all subtrades involved in the project, and includes fully measured quantities of all materials.. A Class A estimate works within a margin of 5% of final project cost.

Having refined our client process over the past seven years, we believe that using two estimates is the most efficient and cost-effective way to project the budget of a custom build or renovation. The first, a Class D estimate, helps provide a rough idea of the project costs prior to us getting too far into the design stages. Depending on the complexity of the project, some design work may be required prior to completing a Class D estimate. At that stage, we aim to be within ±20% of the cost of the project.

Once the drawings have progressed to being ready for permit submission and you are happy with the design, we will complete a Class B estimate. This is a very detailed line-item cost breakdown, taking into account all aspects of the project. We aim to be within ±10% of the actual cost at completion.

We believe that open and honest communication is key to any successful project, and this includes being transparent about costs. We aim to give our clients a realistic understanding of what it takes to bring their dream home to life. With our thorough estimating process, we can confidently move forward with the steps needed to begin construction on your dream home.

Want to discover more about our client process? Click here.

Want to inquire about your new construction? Send us an email at info@bluewaterconcepts.ca

*Source: Appendix A: Description of the Classes of Estimates Used by PSPC for Construction Costing of Building Projects From Royal Architectural Institute of Canada.