Most homeowners receive a renovation quote and focus on one thing: the total. But the total is often the least informative number on the page. The real risk is in the details - or the lack of them.
These are the red flags to look for before you commit.
1. No exclusions section
A well-written renovation quote explicitly states what is not included, not just what is. If your quote has no exclusions list, you have no way of knowing what the builder has left out.
This matters because a builder who wins the job with a stripped-down scope can hit you with variations - additional charges for items "not in the original quote" - throughout the project.
What to do: Ask the builder to add a written exclusions section before you sign.
2. Vague scope descriptions
"Kitchen renovation including supply and install of new cabinetry and appliances - $52,000."
That is not a quote. It is a ballpark figure dressed up as a quote. What cabinetry? What appliances? What brand, what finish, what configuration? What happens to the existing kitchen?
Vague scope creates room for disagreement later. A builder who wins on price with vague scope can argue that anything specific you expected was "outside the quote."
What to do: Ask for a line-item breakdown. Legitimate builders are not offended by this request.
3. Heavy use of provisional sums and PC items
Provisional sums (PS) and prime cost (PC) items are placeholders - the builder estimates a cost but reserves the right to adjust it once the actual cost is known.
Common examples:
- PC item for tiles: $80/m²
- Provisional sum for structural engineer: $1,500
- PC item for tapware: $600
These are not inherently dishonest. Some costs genuinely cannot be fixed at quote stage. But a quote with many large provisional sums is really just an educated guess with a dollar figure on the cover.
What to do: Ask the builder to identify every PS and PC item, explain why it cannot be fixed, and give you the realistic range it could reach.
4. No mention of home warranty insurance
In most Australian states, builders are required by law to take out home warranty insurance (also called home building compensation or domestic building insurance) on residential building contracts above certain value thresholds. The threshold varies by state but is typically $12,000-$20,000.
If your quote makes no mention of home warranty insurance, either the builder is not including it (meaning you are exposed) or they are not aware they need it (a bigger problem).
What to do: Ask specifically whether home warranty insurance is included and who it is with.
5. The quote arrived in under 48 hours
A thorough renovation quote takes time to prepare properly. If you received a quote the same day you met with a builder, or within 24-48 hours of a site inspection, they have likely estimated rather than priced.
Rushed quotes often miss items, underestimate complexity, or contain scope assumptions that diverge from what you actually discussed.
What to do: A slower quote is often a more reliable one. Ask whether there are items they have estimated vs. firmed up.
6. No payment schedule, or front-loaded payments
A legitimate building contract in Australia typically has a payment schedule tied to progress milestones - foundation, frame, lock-up, fixing, practical completion. Payments made upfront before work begins (beyond a reasonable deposit) are a risk.
If a builder asks for more than 10% upfront before any work starts, or wants payment in large lump sums with no milestone link, that is a warning sign.
What to do: Request a progress payment schedule linked to defined stages of work.
7. No licence number on the quote
All builders doing residential renovation work in Australia must hold a current building licence. The licence number should appear on their quote, contract, and business letterhead.
If it is not there, ask for it - and then verify it on your state's Building Commission website:
- NSW: Service NSW Fair Trading licence check
- VIC: Victorian Building Authority licence check
- QLD: Queensland Building and Construction Commission
- WA: Building and Energy licence search
- SA: Consumer and Business Services
What to do: Verify the licence before you proceed, not after.
8. Verbal promises that differ from the written quote
"Oh, that's included - don't worry about it." If a builder makes a verbal promise about inclusions or timing that is not in the written quote, it is not legally binding.
Anything important should be in writing. A builder who resists putting things in writing is either disorganised or leaving room to dispute it later.
What to do: Ask for a written addendum to the quote covering anything discussed verbally but not documented.
9. No ABN or GST treatment is unclear
All renovation work in Australia is subject to GST (currently 10%). Your quote should clearly state whether the price is GST-inclusive or GST-exclusive.
A quote without an ABN, or one that is silent on GST, is either from an unregistered operator or from someone being deliberately vague about the final cost.
What to do: Confirm the ABN and whether all figures in the quote are GST-inclusive.
10. Unusually low price with no obvious explanation
Sometimes a low price reflects a builder who is hungry for work, has lower overheads, or is genuinely more efficient. Those are good reasons to be cheaper.
But sometimes a low price reflects a quote that is missing scope, uses cheaper materials than specified, or is from a builder who underprices jobs to win them and then makes their margin back on variations.
What to do: Ask the builder to walk you through why their price is lower than the others. A confident builder with nothing to hide will have a clear answer.
11. No site inspection before quoting
A builder who quotes a renovation without visiting the site is guessing. Every site has conditions that affect the cost - access, existing structure, drainage, asbestos risk in older homes, council requirements.
What to do: If a builder quotes without a site visit, treat it as a ballpark and ask them to inspect before finalising.
12. Pressure to sign quickly
"I can only hold this price for 48 hours." "I have another client interested in the same start date."
Urgency tactics are a negotiation technique. Legitimate builders understand that signing a renovation contract is a significant financial decision and will give you reasonable time to decide.
What to do: Take the time you need. If a builder withdraws a quote because you asked for a week to review it, you probably avoided a difficult working relationship.
How to check your quotes systematically
Going through a quote looking for all of these issues takes time - especially if you have three quotes to compare. Reno Reviewer analyses your quotes automatically, flags missing items, and generates the specific questions to ask each builder based on what their quote contains.
Upload your quotes to get your free scope analysis.