Knowing the difference between an estimate and a quote can save you time and money in the long run and can help mitigate any legal risks or business pitfalls. Many people misunderstand and believe that estimates and quotes are simply two different names for the same thing. What we will uncover is that both estimates and quotes are quite different with distinct pros and cons.
Standardised pricing can be challenging for some businesses, such as tradespeople, due to the constant change in what's required from job-to-job. Many businesses have to offer tailored prices for their specific services in accordance with their clients' needs.
Offering an estimate or quote provides prospective clients with a customised figure that can be implemented into their budget and gives a projection of the required costs for a specific project. While handwritten quotes or estimates are acceptable, ensure that they are readable and professionally presented to safeguard from any misinterpretation.
Always ensure you are aware of whether or not you are receiving an estimate or quote:
A quote is a fixed contract and is legally binding, which means that once the quote has been accepted by the client the terms and costs cannot be changed. The service provider must adhere to the fixed price, even if the project is extended and it is required to do more work than expected. If it is likely that the builder is going to carry out more work than originally planned, or if any of the project ingredients are likely to change, it is safer to go with a price estimate.
If a quote is necessary, the builder can always specify exactly what it covers, and also note any situations that could lead to additional charges during the construction period. For budget-conscious clients, which should be all of you, quotes give you peace of mind in that you know exactly how much the project will cost from beginning to end.
Note: It is common for quotes to have an expiry date to safeguard any substantial changes in the market.
Unlike a quote, an estimate is not a fixed contract and is therefore not a legally binding document. An estimate, or a guesstimate, is not a guarantee that the total is what the final scope of the project will cost. On-site estimates are often supplied before the granular details of the project are known, and can be given as a rough ballpark to give prospective clients a simple idea of what the project could amount to - in time and money.
It is common for builders to provide multiple estimates, this is to account for unforeseen circumstances that can arise throughout the construction period, including the worst-case scenario. This is a simple buffer to give a full scope of what the project could cost.
Note: Estimates should only be used as an initial guide price only as they are an approximate price that may change.
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