Getting paid before you quote.
What a preliminary agreement is, what builders actually charge for one, and what to say when a client expects a free quote.
What a free quote costs you
Before anything else, work out what you're already giving away. Do it on your own business, with your own numbers.
Count the quotes you put out last year. All of them, including the ones that went nowhere.
Be honest about the hours each one takes. Site visits, measuring, chasing trades for prices, revisions, and the phone calls in between.
Take off the ones you won. What's left is the hours you worked and were never paid for.
Multiply those hours by your real charge-out rate, the one with super, leave, on-costs and overheads already in it.
Whatever that number comes to, it came out of the margin on the jobs you did win. Those clients paid for the quotes you gave everyone else.
You need your real rate for that sum
The Charge-Out Rate Calculator works out what an hour of your time actually costs once super, leave, on-costs and overheads are in. It's the figure step 4 needs.
What a preliminary agreement actually is
A preliminary agreement is a paid stage of work that sits before the fixed price.
In it you define the scope properly, get real prices back from your trades, set the allowances, and build a budget the client can rely on. At the end they have a price they can sign, and you've been paid for the work that produced it.
Builders ask whether that makes it a deposit or a fee for quoting. It's neither. A deposit sits against the build, and a quote fee buys a number. This buys the work that makes a real number possible.
You'll hear it called a few things: a development fee, a pre-construction agreement, or a preliminary services agreement. Same idea underneath.
What builders told me they charge
I asked builders what they charge for this, and these came back. They're what individual builders said they do, not a survey and not a market rate, so read them as a range rather than a benchmark.
$500
From a builder 32 years in. In his words, about 90% of the people who pay it go on to sign.
$2,200
$6,000
$8,000
On additions, with drawings, engineering and soil tests included in the fee.
The spread tells you something useful on its own. What you charge follows what you include, how much of the design work sits with you, and how far you take the trade pricing.
What the client gets for it
Set this out plainly and the question of whether you're charging for a quote tends to answer itself.
A scope written down properly, so both of you are pricing the same house
Real prices back from your trades, instead of allowances you've guessed at
A budget they can make decisions against, before they're committed to building
Every allowance listed, with what sits inside it and what doesn't
Drawings, engineering and soil tests where you've included them
A fixed price they can actually sign, built from real numbers rather than an estimate
The words to use
These are the sentences, near enough. Put them in your own voice and use them early, before a client has decided a quote is free.
Raising it the first time
“Before we get to a fixed price, I run a paid preliminary stage. That's where I lock down the scope, get real prices back from my trades, and turn what you want into a number you can build to. It's $X and it takes about Y weeks.”
When they were expecting a free quote
“I'm happy to give you a ballpark now, and that costs you nothing. What sits behind a fixed price is weeks of scoping and trade pricing, and that's the part I charge for. It's what turns a ballpark into a number you can sign.”
When they push back on paying for it
“Fair question. The alternative is that I guess, and a guessed price either costs me money or gets padded so it doesn't. Neither of those is good for you. Paying for the preliminary is how you get a real number.”
When another builder has quoted free
“They might well, and that's fair to weigh up. I'd just make sure you're comparing the same thing. A free quote is usually an estimate with allowances sitting inside it, and allowances move once the job starts. The preliminary is what takes them out.”
When they already have drawings
“Bring them along. If the drawings are solid the preliminary is quicker, and I'll price it accordingly.”
Credit it back, or don't
Both models work. Pick one before a client asks, so you're not deciding under pressure.
Credit it against the build
The fee comes off the contract price if they go ahead. It lowers the resistance at the moment you ask for it and it reads as good faith. The trade-off is that you've discounted the build by that amount, so build it into your price rather than absorbing it.
Keep it
The fee stands on its own. The work was real, it was delivered, and they own a set of documents that has value whether they build with you or not. The trade-off is a slightly firmer conversation at the start.
The clause that keeps it yours
Whatever you charge, put it in writing that the costings, the scope documents and the trade pricing stay your property until a build contract is signed.
That line is what keeps the work yours. The client has paid for it and can use it to build with you, and the detail behind it stays with you until they commit.
Get your own solicitor to check it
I'm not a lawyer, so treat this as the practical shape of it rather than legal advice. Have your own solicitor draft or review the wording before you use it, particularly the intellectual property clause and anything that touches the building contract rules in your state.
If you want to take it further
Start with the free numbers check
Tell me where the business is at and I'll come back with where I'd start. It costs nothing and there's no obligation attached to it.
Get your free numbers checkOr go deeper
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