Obtaining reliable quotes from craftsmen

A cost estimate is a guideline offer that craftsmen submit for a specific project. However, it is generally not legally binding. This should be clearly stated.

When planning a construction project, customers obtain cost estimates from various craftsmen so that they have an initial idea of the price. This gives the customer an overview and allows them to narrow down the list of providers to the one that suits them best. They can then negotiate the final, binding contract with the chosen company.

Are the costs stated in quotes binding?

In principle, the information in quotes is binding. There are two main ways of charging for work:

The first is for invoices to be issued according to the value of the work done, i.e. based on the time taken, amounts used and surface areas for floor coverings, walls painted, etc. If you choose this option, the basic rate per hour, linear meter etc. is binding, but the total price quoted is not. At the end of the day, the craftsman will invoice you according to the effective costs. This is referred to in the construction industry as “scheduled work”. Unless otherwise agreed, this is the normal method for invoicing – and you run the risk of the project ending up more expensive than the price you initially accepted. It is important to define the scope of the work, materials and the actual costs (hourly rate, material costs per square meter, etc.), bearing in mind that subsequent changes can have a significant impact on the costs.

The other option is to agree on a flat rate for the work in question. With this type of quote, the contractor must complete the work for the price offered, which is a fixed all-inclusive amount. Subsequent changes to the work requested may result in additional costs being incurred over and above the flat rate. The impact on the cost and duration of the work must be clear before any changes are made.

It is important to note that different conditions may apply to each item on the invoice. Certain aspects of the work may be billed on a time and material basis, while a lump sum may be charged for other items, unless an overall flat rate is agreed for the work in general. The elements covered by the flat rate must be clearly and explicitly stated.

How can you make sure you won’t have to pay additional costs?

If the customer wants a fixed all-inclusive price, they must make this very clear, preferably in writing. All the details must be included: material and travel costs, preparation work, VAT, etc. It can be useful to look at sample contracts, for instance from associations.

Clear written contractual terms and detailed descriptions of services provide more security and clarity than verbal agreements. It is important that your individual budget and any limits agreed with the bank are taken into account. You should allow sufficient leeway for unforeseen events.

It should be noted that subsequent changes can have a significant impact on the cost and duration of the work and may mean that the lump sum price no longer applies.

Prices that differ from the initial quote: the 10 percent rule

In general, significant cost overruns not due to customer requests do not have to be accepted. The standard tolerance is around 10 percent. In practice, differences of this magnitude usually have to be tolerated – unless the client has clearly agreed on other conditions, or on an all-inclusive price. A higher tolerance threshold must be accepted for less detailed preliminary projects.

Remember that subsequent changes to the work requested can have a significant impact on the price and duration of the work. Any modifications should also be well documented.

A cost estimate is generally non-binding, and this should be clearly indicated. This also has advantages for the customer. By requesting two or more non-binding cost estimates, you can select the most economical provider. However, you should not only pay attention to the price, but also check other key aspects such as the quality of the work and materials or the availability of the provider. Often, the most expensive quote is actually the most suitable. That’s why you should compare the details of each cost estimate carefully.

In general, verbal agreements are also binding. However, they are not usually recommended, especially when entrusting work to craftsmen. This is because by their very nature, verbal agreements are difficult to substantiate and are prone to misunderstanding. That is why the legal agreements between a customer and a service provider should always be recorded in writing. The same applies if any modifications are requested. If any parts of the contract are unclear, you should always ask questions and seek advice from a specialist if necessary. Do not sign anything that you have not understood. Keep all correspondence in a safe place in case a dispute arises at a later date.

The quote should be as detailed as possible. Even for smaller orders, it’s worth viewing the property on site before awarding the contract. This lets the craftsman or contractor assess the specific situation accurately. It also means they can’t claim at a later stage that additional costs were necessary due to special circumstances.

It is advisable to draw up a written order confirmation and clearly state the applicable conditions.

Various organizations offer assistance, sometimes even free of charge or at reduced rates for members.

You can also ask independent client advisors or other experts to check the facts and suggest a compromise, depending on the situation.

Homeowners can also contact specialist associations such as the Swiss Society of Engineers and Architects (SIA), the Swiss Association of Painters and Plasterers (SMGV), or other specialist organizations which investigate such cases and suggest solutions. It may also be worth consulting a lawyer.

Depending on the situation, it can make sense to call in experts or obtain legal assistance at an early stage, possibly during contract negotiations, and not just when problems arise.

Non-binding cost estimates allow customers to gain an overview of the costs and to select a provider to complete the requested work. However, a legally binding agreement should be reached before the work actually begins. This agreement should be recorded in writing and be as detailed as possible. If you invest enough time in the contractual agreements, you will save yourself a lot of trouble.