It is almost never margin. In our experience the gap is scope: excluded mechanical and electrical work, a provisional sum hiding a real cost, waterproofing specified as a paint-on sealer rather than a membrane system, preparation omitted from painting, or preliminaries never priced at all. The rooms look identical for about a year.
The five places the difference hides
MEP. The biggest one. In a villa over fifteen years old the wiring, pipework and AC are usually at end of life. A quotation that does not price replacement is not cheaper — it is incomplete.
Provisional sums. A round number against an item nobody wanted to measure. It will be revised, and only ever upwards.
Waterproofing. A proper membrane system with a flood test versus a coat of paint-on sealer. Invisible in the finished bathroom; decisive within three years.
Preparation. On painting, fill-sand-prime-two-coats versus two coats over existing. On flooring, levelling and movement joints versus neither.
Preliminaries. Site protection, welfare, waste removal, supervision, insurance and permits typically account for 8–12% of a residential renovation. A quotation that appears not to include them has either buried them or not thought about them.
How to find the gap yourself
Put the quotations side by side and look for what is in one and not the other, rather than comparing the totals.
Then ask each contractor four direct questions. Does this include replacing the electrical distribution board and circuits? Is the bathroom tanking a membrane system, and will it be flood-tested? Does the flooring rate include levelling? What percentage of this price is preliminaries?
The answers, and how comfortable each contractor is giving them, will usually tell you everything.
Cheaper is sometimes genuinely cheaper
It is worth saying plainly: sometimes a lower quotation is a lower quotation for the same work, and you should take it.
The difficulty is knowing whether it is. That is what a measured bill of quantities is for — it makes the comparison possible rather than a matter of trust.
They are not pricing the same thing
The assumption behind the question is that three contractors have looked at one job and formed different views of its value. That is almost never what has happened. They have formed different views of what the job is.
One has priced the finishes. One has priced the finishes and the services behind them. One has priced those plus the making good, the protection, the waste, the approvals and the testing. Three numbers, three scopes, and only one of them is the job you will actually end up having done.
The six things most often missing
Mechanical, electrical and plumbing, because it is invisible when finished. Waterproofing and the test of it. Builder's work in connection with services — the chasing, lifting and making good around first fix. Protection of the parts of the property not being worked on. Waste removal and site cleaning. And the community and authority charges.
None of these are optional and none of them disappear. They arrive later as variations, at a point where the work has started and your leverage has gone.
Why the cheapest quote often ends up dearest
Because a contractor who has under-priced has to recover it somewhere, and the mechanisms are familiar: variations for items that should have been included, substituted materials, or a programme that slips while the team works somewhere more profitable.
The quotation that itemises more is not more expensive. It is more complete, and the gap closes as the cheaper job reveals what it left out.
How to compare them properly
Ask every contractor to price against the same written scope, and ask for the breakdown rather than a single figure. Where one is materially cheaper, find the line that explains it — there is always one.
That is what a bill of quantities is for. Every element listed, quantified and rated, so comparison is arithmetic rather than instinct. Our guide to what a bill of quantities is explains how to read one.
| Item | Why it is left out |
|---|---|
| MEP — wiring, pipework, drainage, AC | Invisible when finished. |
| Waterproofing and testing | Hidden under tiling; no one checks. |
| Builder's work after first fix | Falls between trades. |
| Protection and site cleaning | Treated as the client's problem. |
| Waste removal | Volume underestimated. |
| Community and authority charges | Assumed to be the owner's. |
Related Questions
Should I always take the middle quote?
No — that rule of thumb assumes all three contractors priced the same scope, which is usually exactly the assumption that is wrong.
A middle quotation that excludes MEP is worse value than the highest one that includes it. Compare scope first, price second.
What is a fair contingency to hold?
Five to ten per cent on a properly measured price, and closer to ten on properties over fifteen years old.
Not because the price is unreliable — because opening up an old building occasionally reveals something nobody could have measured in advance.
Why is one renovation quote half the price of another?
Because they are pricing different scopes, not valuing the same work differently. The cheaper figure almost always excludes the mechanical and electrical work, the waterproofing testing, the making good after first fix and the authority charges. Ask both for a measured breakdown and the gap explains itself.
Should I just take the cheapest quote?
Only once you have established it is pricing the same work. A contractor who has under-priced recovers it through variations, substitutions or a programme that slips — and by then you have no leverage. The more itemised quotation is usually more complete rather than more expensive.
What should a proper quotation contain?
A measured breakdown rather than a lump sum: elements listed, quantified and rated, with exclusions stated explicitly. If something is not in the price it should be named as not in the price, because what is unstated is what becomes a variation later.
How do I know what has been left out?
Ask directly about the six usual omissions — MEP, waterproofing and its testing, builder's work after first fix, protection, waste removal and authority charges. A contractor who has allowed for them will say so immediately. One who has not will explain why they are not needed.
Is a fixed price really fixed?
Only against a defined scope. A fixed price with no measured basis is an opening position, because every unforeseen item becomes a negotiation. Fixed against a bill of quantities means there is an agreed rate for changes before anyone needs one.
Why do contractors not include everything?
Because the market rewards the lowest headline number, and including everything makes you look expensive against someone who has not. It is a structural problem with how renovation is bought, and the only defence is comparing scope rather than price.
Does a higher price mean better work?
Not reliably. It means more has been included, which is different. A high price with no breakdown is as uninformative as a low one. What correlates with quality is method — whether the work was measured, whether exclusions are written down, and whether there is an agreed basis for pricing change.
How many quotes should I get?
Three is enough if they are pricing the same written scope, and three is useless if they are not. The effort is better spent defining the scope properly than collecting a fourth number against an undefined one.
What if I have already signed the cheapest?
Establish in writing what is excluded, before work starts rather than after. Ask specifically about MEP, waterproofing, making good and authority charges. Knowing where the variations will come from gives you time to budget for them, which is considerably better than discovering them one at a time.
Why does the same contractor quote differently on two similar villas?
Because the properties are not as similar as they look. Age determines whether the services are a line item or the project. Condition determines how much making good is carried. Community determines the approval route, the deposit and the working hours. And access determines how much of the programme is spent moving materials. Two villas of identical floor area in different communities routinely price twenty per cent apart for reasons that have nothing to do with the finishes you have chosen, which is why a rate per square foot applied without a survey tells you very little.