Construction Insights
How to Compare Builder Quotes in BC: Fixed Price vs. Cost-Plus
When you collect quotes for a new home, the numbers can look wildly different. Often that’s not because one builder is cheap and another expensive, but because the quotes don’t cover the same things. One includes permit fees and landscaping; another leaves them out. One uses generous allowances; another assumes the most basic finishes. This guide explains the main contract types in BC, what a good quote should include, and how to compare quotes so you’re comparing like with like.The three common contract types
BC Housing’s consumer guide, Hiring a Builder in BC, describes three common types of homebuilding contract:| Type | How you pay | Best suited to | Watch for |
|---|---|---|---|
| Fixed price | One agreed price for the defined scope | Simple, fully designed projects with well-defined quality standards | Anything not clearly specified becomes a change order, at extra cost |
| Cost-plus | Actual costs of labour, materials and other expenses, plus a management fee (often a percentage) | More complex or custom projects | The contract must define what counts as a “cost”; you may pay a fee even on items you buy yourself |
| Construction management | You pay the manager (hourly or another basis) and the trades directly | Owners who want more control and can carry more risk | More of the responsibility and risk sits with you |
Quotes firm up in stages. BC Housing explains that estimates often start rough, become more detailed once plans are drawn, and are finalized after the building permit is issued. An early number per square foot is a planning figure, not a price.
What a detailed quote should include
BC Housing says a detailed estimate should cover materials, labour, equipment, taxes, professional services such as engineering, and contingencies, and warns that one-page quotes don’t give enough information to make an informed decision. In practice, check that each quote shows:- A breakdown by stage or trade: site work, foundation, framing, roofing, windows, mechanical, electrical, finishing
- Allowances for items not yet chosen, with the dollar amount for each
- Exclusions: a written list of what is not included
- Taxes: whether GST is included or extra
- Contingency: how much, and who controls it
- Payment schedule and holdback: when money is due, and how the 10% Builders Lien Act holdback is handled
- Schedule: expected start, key milestones and completion
- How changes are priced: the process and markup for change orders
Allowances: where quotes quietly differ
An allowance is a budget placeholder for something you haven’t picked yet, such as tile, plumbing fixtures, lighting, cabinets or appliances. If your final choice costs more than the allowance, you pay the difference. A low allowance makes a quote look cheaper but often leads to extra costs later. When comparing quotes, line up the allowances side by side and ask each builder what you’d actually get for that amount. Be specific about brands and standards: BC Housing points out that these strongly affect cost.About cost ranges: about $250 to $350 per sq ft is an approximate mid-range for new home construction in Vancouver and Burnaby. There is no ceiling at the high end. Designer imported tile, custom millwork, premium fixtures and top-tier workmanship can take the cost as high as you want to go, and allowances are where most of that difference shows up.
Common exclusions to ask about
These items are often left out of a construction quote, or handled differently by each builder. Ask about each one:- Building permit fees, development cost charges and other municipal fees
- Demolition of an existing house and the hazardous materials survey
- Utility connections: water, sewer, storm and BC Hydro service
- Design, engineering, surveys, energy modelling, geotechnical and arborist reports
- Landscaping, fencing, driveways and retaining walls
- Appliances, window coverings and built-in furniture
- Rock, poor soil or groundwater found during excavation
- GST
A simple way to compare quotes
- Give every builder the same information: the same drawings, specifications and finish expectations.
- Build a comparison sheet with one column per builder and one row per line item, allowance and exclusion.
- Fill the gaps. Where one builder excludes something another includes, add an estimate so the totals compare fairly.
- Compare allowances against what you actually plan to choose.
- Compare schedules and payment terms, not just price.
- Ask follow-up questions in writing, and keep the answers.
Checks to make on any builder
- Licence: only a Licensed Residential Builder with a general contractor licence can build a custom home for you in BC. Check BC Housing’s public registry, and make sure the name on the contract matches the licence.
- Home warranty: the builder must arrange third-party 2-5-10 home warranty insurance before getting a permit or starting construction. See BC’s 2-5-10 warranty explained.
- Past projects: look the builder up on BC Housing’s New Home Registry.
- Insurance and WorkSafeBC: ask for proof of commercial general liability insurance and a WorkSafeBC clearance letter.
- References: ask past clients how changes, delays and budgets were handled.
Before you sign
BC Housing stresses that the agreement must be in writing, covering scope, timing, payment, holdbacks, change orders, deficiencies, delays and termination, and recommends having a construction lawyer review it before you sign. It also suggests a contingency of 10 to 20% of the total budget.Related reading
- Construction management vs. general contracting
- Construction financing in BC: how draw mortgages work
- How long it takes to build a custom home, with a cost breakdown
- Laneway house cost in Vancouver: what drives your budget
Please note: This page is general information, not legal, financial or professional advice. The facts, figures, bylaws, fees and code requirements described here were accurate to the best of our knowledge when it was published or last updated. These rules change often and differ from city to city, so some details may have changed since. Before you make decisions, please confirm the current requirements with your city’s planning and building department and with qualified professionals. We’re always happy to help you check what applies to your property.
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Figures are approximate. Confirm current fees and requirements with your municipality and BC Housing before you sign.6 Comments
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