Once you have made the decision to renovate or build your home, the time will come where you will have to sit down and read through your builders quote. This can be quite a confusing time when confronted with so many new terms and a whole new language. There are two we receive the most questions about, so I thought it a good time to run through them again.
PC and PS What’s The Difference
PC stands for Prime Cost items. This is a financial allowance in the contract of a specified sum, to be used to pay for an item such as a bath tub or the appliances. The reason a PC might be specified rather than an actual item allowed for, is often the client has not yet chosen what they might like, so the builder will allow a reasonable sum to cover this item, giving the client the freedom to choose what they would like, all while know how much is covered by their contract. If the item chosen is less expensive, the builder is then responsible for crediting the client with the difference, likewise if the item chosen is more expensive, the client is responsible for paying the builder the difference.
PS stands for Provisional Sum items. Provisional sums are a financial allowance in the contract usually for bigger items such as electrical works or kitchens. Again this sum allows the client to make choices within the allowed budget, knowing that if the works are less expensive, they will receive a credit and more expensive they will be responsible for paying the difference to the builder. Provisional sums are typically written into the contract where an item is not standard or has not yet been decided on, for example, we have a contract at the moment for an extension, in which the client had no idea what style of kitchen they would require. When the contract was signed, we allowed a PS of $25k, however now that the kitchen has been completed, the client having chosen a very simple kitchen is now entitled to a refund of approximately $6k.
Being custom builders at Fernbrooke Homes, we typically use both PC and PS items in most of our contracts. Project builders rarely use these allowances, specifically because they have ranges for clients to select from. For some people that process is much simpler, for others they prefer the flexibility of a custom builder.
Don’t forget to read my tips on comparing quotes, once all your quotes are in. It is very rare to find 2 builders who have quoted on exactly the same thing.
Have you ever had the opportunity to read a quote from a builder? Did you find the language confusing? Is there another term you would like me to explain?
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