Charging for preliminary work means the homeowner pays for the design, site investigation and costing that come before a fixed price, instead of you doing it for free. It works when the fee comes after a free first conversation, is tied to a list of things the homeowner keeps, is explained in terms of their risk, and comes off the contract price if they build with you.
A detailed quote on a custom home is skilled work, and on the quotes you do not win, nobody pays for it.
Take your own numbers. As an example only: say a detailed quote takes you 20 hours, you value your time at $120 an hour, and you win 1 in 4. Ten quotes a year is 200 hours, and 150 of them go on jobs you did not get. That is $18,000 of your time a year, before the phone calls and site visits. Put in your real figures. The point is the shape of the sum, not these numbers.
Why free quoting persists
Every builder who quotes for free knows what it costs. Three things keep it in place.
The fear of losing the job. If the builder down the road quotes free and you do not, the worry is that the homeowner picks him. That fear measures the wrong thing. You are not competing for the quote. You are competing for the build.
The awkwardness of asking. Plenty of builders can price a job to the dollar and still cannot say a fee out loud without their voice changing. That is a process problem, not a pricing one, and processes can be fixed.
No structure to hang it on. A fee with nothing around it is a demand. A fee attached to a named agreement with defined deliverables is a professional service. Same money, different conversation.
What a preliminary agreement covers
A preliminary agreement is a separate contract signed before the building contract. The Queensland regulator describes it as an agreement that lets a licensed contractor get paid up front for initial work, such as drawing up designs and specifications, soil tests and contour surveys (QBCC, contracts and agreement types).
Consumer Affairs Victoria notes the same document goes by many names, including preliminary agreement, quote, order and preliminary contract estimate. It also says the builder must obtain a soil report and foundation data to design the footings and give an adequate estimate of the cost (Consumer Affairs Victoria, pre-construction building contracts).
The work has to happen before an honest fixed price. The only question is who pays for it, and when. A typical list of deliverables:
- Soil classification report
- Contour and feature survey
- Engineer’s preliminary advice on footings
- Concept or preliminary drawings
- A fixed price, not an estimate
The four things that have to be true
If charging is not working for you, check these four first. A missing one is enough to sink it.
1. Timing
The fee is not introduced on the first call. It comes after a free first conversation and usually after a site visit, once you have shown you know something about their block that they did not.
Asking for money before you have shown value is a transaction. Asking afterwards is a next step.
2. A name and a list
Do not call it a quote fee. Charging for a quote sounds like charging for a sales document, and nobody pays for a sales document.
Name the thing: preliminary services agreement, site and design stage, pre-construction agreement. Then tie it to deliverables the homeowner keeps whatever happens. The soil report is theirs. The survey is theirs.
One catch to settle early. Consumer Affairs Victoria warns homeowners that if the agreement includes drawings or specifications, copyright may stop them using those drawings with another builder. Decide what they can take away, and put it in writing.
3. Justification
The reason has to be about their risk, not your time.
“I spend too long on quotes that go nowhere” is true, and it is the wrong sentence. It makes your problem their problem.
The version that works sounds like this: we do not guess the price of your home. To give you a fixed price we need to know what is under the ground and exactly what is going into the walls. This stage is what makes your contract price accurate instead of an estimate.
Every word of that is about protecting them.
4. What happens to the fee
The homeowner needs to know, before they pay, what happens to the money if they go ahead and if they do not. A simple choice is to take the fee off the contract price if they build with you, and let them keep the deliverables if they do not.
Be careful going the other way. QBCC says some preliminary agreements include fees or penalties if the owner chooses not to proceed after receiving the final price, and that this may be illegal. Do not add a walk-away charge without legal advice.
Check the rules in your state
Home building law differs by state, and it is changing. These are the points the regulators publish. Check them for your own situation, because this is not legal advice.
- Queensland. QBCC says the contractor can take full payment up front for the preliminary work it arranges. A written contract is needed for domestic building work over $3,300. The deposit on the building contract is capped at 10% from $3,301 to $19,999 and 5% from $20,000 (QBCC, deposits and progress payments).
- Victoria. Consumer Affairs Victoria says an agreement that goes beyond a soil report, into design, drawings or permits, is a building contract, and one for domestic building work over $10,000 is a major domestic building contract. Deposits are capped at 10% under $20,000 and 5% from $20,000 (Consumer Affairs Victoria, deposits and payments). New laws take effect by 1 December 2026. They allow separate agreements for drawings, specifications and bills of quantity, and let deposit limits be set by regulation (Consumer Affairs Victoria, new laws).
- New South Wales. A written contract is required for residential building work over $5,000 including GST, and the deposit cannot be more than 10% (NSW Government, guide to providing home building contracts).
- Western Australia. For fixed-price home building contracts between $7,500 and $500,000, the deposit is capped at 6.5% of the contract price (WA Government, building or renovating your home).
If your fee is meant to come off the contract price, ask your lawyer or regulator how that sits with the deposit cap in your state before you write the agreement.
What it does to your numbers
The obvious benefit is getting paid for preliminary work. It is not the main one.
The main one is what happens to the quotes you still do. A homeowner who pays before you price has made a decision. Someone who will not pay anything for a proper price is telling you how serious they are.
The second benefit is time. Look back at last year’s quotes and count the ones where the homeowner was never going to build with anyone. A fee is designed to stop those before you open your estimating software.
If you already charge
Plenty of builders have a preliminary fee and still lose weeks to people who never sign. Charging is not the finish line.
Two leaks survive it.
Enquiries that never reach the paid stage. Every call, site visit and first meeting with someone who does not proceed is still unpaid. A clear way to qualify an enquiry before you quote is what keeps that cost down.
Paid work that goes quiet. These are the expensive ones. The homeowner paid you to produce a fixed price, which means they were serious, and then nothing. The usual reasons are covered in why quotes go quiet.
If you charge already, your problem is not the fee. It is what happens either side of it. PreBuild sets up paid preliminary agreements for builders and follows up the quotes that come out of them, as described on the quote follow-up page.
Where to start
Do not start with the fee. Start with the process it sits inside.
- Write down what a homeowner gets for the money, as a list of deliverables they keep.
- Give it a name that is not “quote fee”.
- Decide what happens to the fee if they build and if they do not, and say it in the first conversation.
- Decide when in your sequence the fee is introduced, and never move it earlier.
- Check your state’s rules, and have the agreement read by a lawyer.
- Write the reason in their language, about their risk, and practise saying it until your voice does not change.
For setting the amount itself, see how much to charge for a preliminary agreement. For the trade-offs against free quoting, see free quotes vs paid preliminary agreements.
Common questions
Will I lose jobs by charging for quotes?
You will lose some enquiries. That is what a filter does. The question is whether the ones you lose were going to sign. Track two numbers before and after you start: hours spent per signed build, and builds signed. If the first falls and the second holds, the fee is working.
How much should I charge for a preliminary agreement?
There is no standard fee, and we know of no published survey of what Australian builders charge. Build it from your real costs: what your soil tester, surveyor and engineer charge for that block, plus your own hours at your real rate. The amount matters less than whether the homeowner knows what they keep and what happens to the fee if they build.
What if the client says other builders quote for free?
They do, and it is worth saying so. Then explain the difference in what they receive. A free quote is produced without site investigation, so it is an estimate. A paid preliminary stage produces a fixed price backed by a soil report, a survey and an engineer’s advice. Those are different things.
Do I refund the fee if they do not proceed?
That is your choice, and it belongs in the written agreement. A simple approach is to take it off the contract price if they build with you and let them keep the deliverables if they do not. Refunding it outright removes the filter. A penalty for walking away is a different matter: QBCC warns it may be illegal, so get legal advice first.
Does this work for renovations and extensions, not just new builds?
Yes. The scope work on a renovation is often smaller, so the fee can be smaller too, but the structure is the same: a free first conversation, then a paid stage with a list of deliverables the homeowner keeps.