How to Estimate a Residential Build

1. Start with a real takeoff

Measure off the drawings before you price anything. Set the scale, then run linear measures for footings, wall plates and cornice; area measures for slab, roof, plaster and floor coverings; and counts for windows, doors, downlights and tap sets. Keep each measure attached to the drawing it came from so you can re-check it when the client swaps a product or the engineer revises a detail.

Record quantities and rates separately. When a supplier lifts its price 8%, you want to change one rate, not re-measure the house.

2. Build the estimate in the categories you will cost against

Preliminaries, site works, concrete, frame, roofing, external cladding, windows, plumbing, electrical, insulation and linings, joinery, tiling, painting, floor coverings, external works, and a separate line for supervision. If your estimate categories match your job cost categories, every supplier invoice and purchase order that lands later can be allocated straight to a budget line — and variance shows up while you can still act on it.

Sub-categories earn their keep on bigger jobs: splitting "concrete" into footings, slab and external flatwork tells you which part blew out, not just that the trade did.

3. Price trades properly, and mark allowances as allowances

• Quoted — a written trade quote against a defined scope. Record the scope, not just the number, so exclusions are traceable.
• Rated — your own rate applied to a measured quantity (m² of plaster, lineal metres of skirting). Review rates each quarter.
• Provisional sum / prime cost — a genuine allowance where the selection is not made yet. Say so in the quote, in plain words, with the amount visible. Undisclosed allowances are where client disputes start.

Assemblies save the most time here: a "standard bathroom" or "single garage" that carries its own materials, labour and waste factors can be dropped into any estimate and adjusted.

4. Margin is not markup

This is the single most common estimating error. Markup is applied to cost; margin is a share of the sell price. Adding 20% markup to $500,000 of cost gives $600,000 — a margin of 16.7%, not 20%. To actually achieve a 20% margin on the same cost you need to sell at $625,000 (cost ÷ 0.8).

Decide which you are working in, apply it consistently, and let the estimate show raw cost, the margin amount and the sell price as separate figures. Category-level markups are worth using where risk differs — carrying more on labour-heavy trades than on fixed-price supply.

5. GST, contingency and the quote

In Australia, decide up front whether your estimate lines are GST-exclusive or GST-inclusive and keep every line consistent — mixed lines are the reason quote totals fail to reconcile. Present the client a clean summary: cost, margin, subtotal, GST, total.

Contingency belongs in the estimate as a visible line, sized to the unknowns of that specific job (sloping site, unknown soil classification, heritage overlay), not as a habit percentage buried in your rates.

6. Turn the accepted quote into a budget on day one

The moment a quote is accepted, the estimate stops being a sales document and becomes the job budget. Convert it — don't retype it. Every category becomes a budget line, purchase orders and supplier invoices allocate against those lines, and variations adjust the budget rather than living in a side spreadsheet. Then the question "are we ahead or behind?" has an answer at any point in the build, not just at the end.

How SiteStride handles this

SiteStride keeps takeoffs, assemblies, category markups and the cost/margin/GST breakdown in one estimate, then converts an accepted quote into a job with its costing categories already in place — so POs and supplier invoices roll up against the numbers you quoted. The program side of the same job is covered in critical path scheduling.

For the takeoff, assembly and markup tooling described above, see SiteStride's construction estimating software.

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