With a number of builders prices put forward for your new home or renovation it might be tempting to go with the one that is the lesser dollar value.  But how do you know if this is truly the best value for money?  It is worth taking some time to better understand the proposals put forward, after all this isn't the sort of investment you make everyday.

Here are some tips on translating a builders proposal and things to look out for so you can make an informed choice. 

Provisional or prime cost items

Some proposals you receive may include provisional or prime cost items.  These are items where an estimated dollar value is assigned as the cost is not yet known.  For example, a bathroom vanity basin may still to be selected, so a prime cost amount of $220 may have been itemised in the proposal.  If this is outlined in the building contract, when you make the selection of the basin, and the actual cost is $200, the builder will credit you $20.  If your selection is $240, then an additional $20 will be invoiced by the builder.

It is important that any provisional or prime cost items are clearly shown in the proposal and contract documents, and that the estimates provided are realistic.  The risk if they aren't is an overrun in project costs.

TIP: In order to compare proposals accurately it is best to either make selections for items like bathroom fittings, or ask all builders to allow the same dollar value.  This way you can more easily compare proposals.

Items missing from the proposal

The general rule of thumb is if the item isn't listed as included, then it probably isn't.  If there are items missing from the proposal that you think should be included, seek clarification.  This applies to all stages of construction and could be items that are not visible but are important to assist the thermal performance of your home; for example thermal break insulation to a double brick house.

TIP: clearly understand materials and specifications required for your project and ensure they are listed in the builders proposal.


Some proposals may include a list of exclusions, or things that have not been allowed for in the price.  It is important to carefully assess this list, as sometimes the list can include items that will be needed and therefore you will still need to budget for them.  

TIP: When comparing proposals, assign dollar values to the items excluded and reconcile with the prices put forward so you can more easily compare proposals.

Substitution of products

Each builder has preferred suppliers and products and they may substitute items.  Often products are like for like, but sometimes substitution can impact the performance or look of your home.  This is particularly relevant for insulation, and ensuring you are getting the same R-value benefits.

TIP: If there are specific products you want to use, clearly document them so all builders allow the same product.