We build in Sydney, South Coast (Wollongong) & Central Coast NSW
We build in Sydney, South Coast (Wollongong) & Central Coast NSW
We build in Sydney, South Coast (Wollongong) & Central Coast NSW
We build in Sydney, South Coast (Wollongong) & Central Coast NSW
We build in Sydney, South Coast (Wollongong) & Central Coast NSW

Fixed price vs estimate: what fixed price should actually mean

Last reviewed: August 2026
By BlueGum Granny Flats
Builder Licence 247388C
HIA member
HIA GreenSmart
In-house approvals, not outsourced
NSW Fair Trading

A fixed price should mean the number does not move unless you change the scope. An estimate is an opinion about what something will probably cost. Between the 2 sits the document most people are actually given: a fixed price with enough provisional sums and exclusions in it that it behaves like an estimate.

Telling them apart takes about 10 minutes and saves a great deal of money.

The 3 documents

Estimate
Fixed price with provisional sums
True fixed price
Based on
Similar past jobs
Your block, partly investigated
Your block, fully investigated
Site inspection done
Usually not
Sometimes
Yes
Soil test done
No
Sometimes
Yes
Final cost
Will move
Will probably move
Should not move
Useful for
Early budgeting
Comparing, with care
Signing
Estimate
Similar past jobs
Fixed price with provisional sums
Your block, partly investigated
True fixed price
Your block, fully investigated
Estimate
Usually not
Fixed price with provisional sums
Sometimes
True fixed price
Yes
Estimate
No
Fixed price with provisional sums
Sometimes
True fixed price
Yes
Estimate
Will move
Fixed price with provisional sums
Will probably move
True fixed price
Should not move
Estimate
Early budgeting
Fixed price with provisional sums
Comparing, with care
True fixed price
Signing

All 3 have a legitimate use. The problem is when an estimate is presented as if it were the third column.

What has to happen before a price can genuinely be fixed

A builder cannot fix a price on information they do not have. For a granny flat that means:

  • A site inspection. Slope, access, existing structures, where services run.
  • A soil test. Sets the slab design and reveals rock. This is the big one.
  • A survey. Boundaries, levels, and what will actually fit.
  • The design finalised. Including finishes, because selections carry cost.
  • Service locations confirmed. Particularly sewer.
  • The approval pathway known. CDC and DA cost different amounts.

If a number arrives before those 6 things, it is an estimate. That is fine at the budgeting stage. It is not fine as the basis for signing a contract.

Provisional sums, explained plainly

A provisional sum is an allowance for work that cannot be priced exactly yet. The most common one on a granny flat is site works.

Here is how it behaves:

  • The quote includes, say, $15,000 for site works
  • Excavation begins and hits rock
  • The actual cost is $27,000
  • You pay the difference

Provisional sums are not dishonest. Sometimes they are unavoidable. But a quote with several large provisional sums is not a fixed price, and it should not be compared against one that is.

The question to ask: which items in this quote are provisional sums, and what happens if they are exceeded?

How to tell what you have been given

Look for these signs.

Sign
What it means
No site inspection happened
It is an estimate
No soil test done
Site costs cannot be fixed
The words “from” or “starting at”
It is a starting point, not your price
A long exclusions list
The real cost is higher than the number
Several provisional sums
The price will move
“Subject to site conditions” with no detail
Effectively an estimate
Site inspection, soil test, itemised inclusions and exclusions
A real fixed price
What it means
It is an estimate
What it means
Site costs cannot be fixed
What it means
It is a starting point, not your price
What it means
The real cost is higher than the number
What it means
The price will move
What it means
Effectively an estimate
What it means
A real fixed price

That last row is what you want before signing anything.

What a fixed price should still allow to change

Being fair about this matters, because no price can be absolutely immovable.

Two things reasonably change a fixed price:

Variations you request. You change the benchtop, add a window, move a wall. You pay for the change. This is normal and should be documented in writing with a price before the work happens.

Genuinely unforeseeable conditions. Something no reasonable investigation would have found. This is a much narrower category than it is often used for. Rock found after a soil test that showed rock is not unforeseeable. Contamination nobody could have known about might be.

The test of a good contract is how narrowly that second category is defined.

Comparing quotes fairly

  • Get every quote against the same written scope
  • Mark each item included, excluded or provisional on all of them
  • Price the excluded items and add them to that quote’s total
  • Add a realistic allowance for each provisional sum being exceeded
  • Now compare

Step 4 is the one people skip, and it is where the ranking usually changes.

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Frequently asked
questions

The contract is binding on its own terms, which is exactly why the terms matter. A contract that says fixed price and then lists broad circumstances allowing adjustment is binding on those terms too. Read what the contract says can change the price, not just the headline.

Only in accordance with the contract, which typically allows for variations you request and for defined unforeseen conditions. Requesting the price before any variation work starts is both reasonable and normal.

Ideally none by the time you sign, because the investigations should have removed the uncertainty. In practice 1 or 2 on genuinely unknowable items can be reasonable. Several large ones mean the price is not really fixed.

Someone has to, and it is the only way to fix site costs properly. Ask whether the builder arranges it and whether the cost is credited against the build if you proceed.

Not usually. The estimate is a prediction and the fixed price is a commitment. Comparing them directly compares 2 different kinds of thing.

Get a price that holds

We quote fixed price after a site assessment, and we manage approvals in-house so the approval costs sit inside the same scope rather than arriving separately.

Book a site assessment, or call BlueGum on 1300 060 651.

Building granny flats since

Since 2012

Builder licence

247388C, verifiable through NSW Fair Trading

Industry body

Housing Industry Association member

MBA NSW Excellence in Housing Awards

Winner 2021, Winner 2023, Finalist 2020

Completed granny flats documented on this site

70+

Approvals

CDC and DA, both managed in-house

Pricing

Fixed price after a site assessment, 2-bedroom from $134,990

Building granny flats since

Since 2012

Builder licence

247388C, verifiable through NSW Fair Trading

Industry body

Housing Industry Association member

MBA NSW Excellence in Housing Awards

Winner 2021, Winner 2023, Finalist 2020

Completed granny flats documented on this site

70+

Approvals

CDC and DA, both managed in-house

Pricing

Fixed price after a site assessment, 2-bedroom from $134,990

BlueGum Granny Flats is a licensed NSW builder, licence number 247388C, and a member of the Housing Industry Association. Setback, frontage and landscaping figures are drawn from the State Environmental Planning Policy (Housing) 2021 as in force in August 2026 and are general information, not planning advice. Other planning instruments applying to your land can vary them. Confirm the requirements for your block with a certifier or your council. Cost ranges are drawn from published 2026 Sydney market guides and are not a quote.
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