How to Get Accurate Quotes for Building a House

Quick answer

• Clearly define your project scope, including desired materials, finishes, and any unique features.
• Get detailed bids from at least three reputable general contractors.
• Understand what is included and excluded in each quote to compare apples to apples.
• Factor in potential overages by adding a contingency fund of 10-20% to your budget.
• Ask for itemized breakdowns of costs for labor, materials, and subcontractor fees.
• Be prepared to negotiate and clarify any ambiguities with potential builders.

Who this is for

• Individuals planning to build a new home from the ground up.
• Homeowners looking to undertake a significant custom home construction project.
• Anyone seeking to understand the financial implications and budgeting process for building a house.

What to check first (before you act)

Goal and timeline

Before you even think about getting quotes, you need to have a clear vision of what you want to build and when you need it done. This includes the size of the home, the number of bedrooms and bathrooms, the architectural style, and any specific features like a finished basement or a large outdoor living space. Your timeline is also crucial; are you aiming to break ground in a few months, or is this a longer-term project?

Current cash flow

Understanding your current financial situation is paramount. This involves analyzing your income, expenses, and savings. How much can you realistically afford to spend on this project without jeopardizing your financial stability? This analysis will help determine your overall budget and how much you can allocate to different phases of the build.

Emergency fund or safety buffer

Building a house is a complex project with many moving parts, and unexpected issues can arise. It’s essential to have a robust emergency fund or a dedicated contingency budget to cover unforeseen costs. This buffer protects you from derailing your project or incurring significant debt if problems occur.

Debt and interest rates

If you plan to finance your home build with a construction loan or mortgage, understanding your current debt load and the prevailing interest rates is vital. High-interest debt can significantly impact your ability to secure financing and the overall cost of your project. Reviewing your existing debts and their associated interest rates will help you budget more effectively.

Credit impact

Taking out construction loans or mortgages will affect your credit. Ensure your credit score is in good standing before applying for financing. A strong credit history can lead to better loan terms and lower interest rates, saving you money over the life of the loan.

Step-by-step (how to quote a house build)

1. Define your project scope in detail.

• What to do: Create a comprehensive list of everything you want in your home. This includes square footage, number of rooms, style, specific architectural elements, and desired finishes (e.g., flooring, countertops, fixtures).
• What “good” looks like: A detailed document or set of plans that leaves little room for interpretation for contractors.
• Common mistake and how to avoid it: Being vague about finishes or features. Avoid this by creating a detailed specification sheet or working with an architect/designer to develop preliminary plans.

2. Develop preliminary architectural plans or sketches.

• What to do: Even if it’s just hand-drawn sketches or using online design tools, having visual representations of your desired home is critical.
• What “good” looks like: Clear drawings that convey the layout, size, and general aesthetic of the house.
• Common mistake and how to avoid it: Relying solely on verbal descriptions. Avoid this by having visual aids, no matter how basic, to show potential builders.

3. Research and vet potential general contractors.

• What to do: Look for licensed and insured general contractors with experience in building homes similar to what you envision. Check online reviews, ask for references, and look at their past projects.
• What “good” looks like: A shortlist of 3-5 qualified and reputable contractors.
• Common mistake and how to avoid it: Hiring the cheapest option without proper vetting. Avoid this by prioritizing experience, reputation, and quality of work over just price.

4. Request detailed, itemized bids.

• What to do: Provide your detailed scope of work and preliminary plans to each contractor and ask for a comprehensive quote that breaks down costs by category (e.g., foundation, framing, roofing, electrical, plumbing, finishes).
• What “good” looks like: Bids that are thorough, itemized, and clearly outline what is included and excluded.
• Common mistake and how to avoid it: Accepting lump-sum quotes. Avoid this by insisting on itemized breakdowns to understand where your money is going.

5. Schedule site visits with contractors.

• What to do: Have each contractor visit your property to assess the site conditions, discuss your project in person, and ask clarifying questions.
• What “good” looks like: Contractors who are engaged, ask pertinent questions about the site, and demonstrate an understanding of the project.
• Common mistake and how to avoid it: Not allowing contractors to see the site. Avoid this by scheduling these visits to ensure accurate quoting based on actual conditions.

6. Clarify inclusions and exclusions.

• What to do: Carefully review each bid and ask specific questions about what is and isn’t covered. This includes permits, site preparation, landscaping, appliance allowances, and specific material choices.
• What “good” looks like: A clear understanding of all costs and responsibilities for both you and the contractor.
• Common mistake and how to avoid it: Assuming certain items are included. Avoid this by getting everything in writing and explicitly asking about potential grey areas.

7. Compare bids apples-to-apples.

• What to do: Use a spreadsheet or checklist to compare the detailed costs and specifications of each bid side-by-side. Note any significant differences in materials, labor estimates, or included services.
• What “good” looks like: A clear comparison that highlights the strengths and weaknesses of each offer.
• Common mistake and how to avoid it: Focusing only on the bottom-line number. Avoid this by comparing the value and scope of work offered by each contractor.

8. Discuss potential cost savings or upgrades.

• What to do: If a bid is over budget, discuss with the contractor if there are areas where costs can be reduced (e.g., alternative materials) or if certain upgrades are worth the investment.
• What “good” looks like: A collaborative discussion that leads to adjustments that meet your budget and priorities.
• Common mistake and how to avoid it: Not being open to discussion. Avoid this by engaging in open dialogue with contractors about budget flexibility.

9. Inquire about the contractor’s payment schedule.

• What to do: Understand how payments will be structured throughout the build. Typically, payments are tied to completed stages of construction.
• What “good” looks like: A clear, fair payment schedule that aligns with project milestones.
• Common mistake and how to avoid it: Paying too much upfront. Avoid this by ensuring payments are released only after work is completed and inspected.

10. Add a contingency fund to your budget.

• What to do: Allocate an additional 10-20% of your total estimated construction cost for unexpected expenses.
• What “good” looks like: Having a financial cushion available to handle unforeseen issues without stress.
• Common mistake and how to avoid it: Underestimating or ignoring potential overages. Avoid this by proactively budgeting for the unexpected.

11. Review and sign the contract.

• What to do: Once you’ve selected a contractor, carefully review the final contract, ensuring all agreed-upon terms, specifications, and pricing are included.
• What “good” looks like: A legally sound contract that protects both parties and clearly outlines the project.
• Common mistake and how to avoid it: Signing without reading or understanding. Avoid this by reading every clause and seeking legal counsel if necessary.

Common mistakes (and what happens if you ignore them)

Mistake	What it causes	Fix
Vague project scope	Inaccurate quotes, scope creep, disputes with the builder, budget overruns.	Create detailed specifications and plans.
Not getting multiple bids	Paying more than necessary, settling for a contractor who isn’t the best fit, lack of negotiation power.	Obtain at least three detailed quotes from reputable builders.
Accepting lump-sum quotes	Inability to track costs, difficulty identifying overages, potential for hidden fees.	Insist on itemized breakdowns of all costs.
Failing to vet contractors thoroughly	Hiring unreliable or unqualified builders, poor workmanship, project delays, financial scams.	Check licenses, insurance, references, and past projects.
Ignoring site conditions	Unexpected costs for excavation, foundation work, or utility connections; delays due to unforeseen challenges.	Ensure contractors visit the site and factor in all site-specific requirements.
Not clarifying inclusions/exclusions	Disputes over what was included, unexpected out-of-pocket expenses for items you thought were covered.	Get a detailed list of everything included and excluded, especially regarding finishes, permits, and site work.
Underestimating or skipping contingency	Inability to pay for unexpected issues, project stalling, taking on high-interest debt to cover overages.	Budget an additional 10-20% of the total construction cost for unforeseen circumstances.
Not reading the contract carefully	Agreeing to unfavorable terms, missing crucial details about timelines, payments, or warranties.	Read every clause, ask questions, and consider legal review before signing.
Focusing solely on the lowest price	Compromised quality, poor workmanship, using cheaper materials that won’t last, potential for future repairs.	Compare bids based on value, scope, quality of materials, and contractor reputation, not just the final dollar amount.
Not understanding the payment schedule	Paying too much upfront, potential for the builder to disappear or perform poorly if paid too much too soon.	Ensure payments are tied to completed stages of work and are reasonable.

Decision rules (simple if/then)

• If your project scope is not clearly defined, then postpone getting quotes because vague plans lead to inaccurate pricing and disputes.
• If you only get one quote, then you are likely overpaying or missing out on a better contractor because competition drives better pricing and service.
• If a contractor’s quote is significantly lower than others, then scrutinize it closely because it might indicate missing items or lower quality materials.
• If a quote does not include an itemized breakdown, then request one because understanding individual costs is crucial for budgeting and comparison.
• If the contractor’s references have consistent complaints about communication, then consider another builder because poor communication can derail a project.
• If the contract includes vague language about “allowances” for finishes, then ask for specific dollar amounts for each allowance because this prevents surprises.
• If you are unsure about a contract clause, then seek legal advice because contracts are legally binding documents.
• If your site has unusual geological conditions, then ensure your quotes account for specialized foundation or excavation work because this can be a major cost driver.
• If you are considering high-end finishes, then ensure your quotes reflect the actual cost of those materials and the labor to install them because standard quotes may not cover custom work.
• If a contractor pressures you to sign immediately, then walk away because reputable builders allow time for review and consideration.
• If your budget is tight, then prioritize essential structural elements and finishes over non-essential aesthetic upgrades because these can be added later.
• If you have a strict deadline, then ensure this is clearly communicated and built into the contract with potential penalties for delays because timelines are critical.

FAQ

What is the average cost to build a house?

The cost to build a house varies significantly based on location, size, materials, and finishes. It’s best to get specific quotes for your project rather than relying on general averages, which can be misleading.

How much of a contingency should I add to my building budget?

A contingency fund of 10-20% of the total estimated construction cost is generally recommended. This buffer is for unexpected issues that inevitably arise during a custom build.

What is the difference between a construction loan and a mortgage?

A construction loan is a short-term loan used to finance the building of a home. Once construction is complete, it’s typically converted into a long-term mortgage.

How long does it take to get building quotes?

Getting detailed quotes can take anywhere from a few days to a couple of weeks per contractor, depending on their workload and the complexity of your project.

Can I negotiate the price of building my house?

Yes, negotiation is often possible, especially if you have multiple bids. You can discuss specific line items, material choices, or potential scope adjustments to align with your budget.

What is “scope creep” and how does it affect my quote?

Scope creep refers to changes or additions to the original project plan after construction has begun. This can significantly increase costs and delay timelines, often requiring a revised quote or change order.

Should I hire an architect or designer before getting quotes?

While not always mandatory, hiring an architect or designer can help you develop detailed plans and specifications, leading to more accurate quotes and a clearer vision for your builder.

What are common “allowances” in a building quote?

Allowances are dollar amounts set aside in a quote for items that haven’t been finalized, such as flooring, lighting fixtures, or countertops. It’s crucial to understand these allowances and what they cover.

What this page does NOT cover (and where to go next)

• Detailed architectural and design services. (Consider consulting with architects or interior designers.)
• Financing options and mortgage pre-approval processes. (Explore options with lenders and financial advisors.)
• Legal aspects of construction contracts. (Consult with a real estate attorney for contract review.)
• Specific building codes and permit requirements in your locality. (Check with your local building department.)
• Project management during the construction phase. (This is typically handled by the general contractor, but understand their process.)
• Interior design and furnishing choices beyond basic allowances. (Work with an interior designer for these details.)