8 Tips to Negotiate With a Builder and Save Thousands

I recently moved house and have had to do about £100k worth of work to my property. I’ve had to negotiate with multiple tradesmen in the past few months.  

I’m pretty sure I’ve managed to pay 20% less than I would with bad negotiations. 

I did it by sticking to 7 practical negotiation tactics, each of which I’ll break down below.

The principles covered below are focused on property work, but are actually applicable to any negotiation.

N.B. This article is not about “taking advantage” of a builder. Quite the contrary. The best negotiations are fair and make all sides feeling like they’ve got a good deal.

1. Create a Competitive Bidding Process

Everyone knows you are supposed to get a few different quotes. But what they don’t tell you is that this is the single biggest determinant of whether you will pay £100,000 or £50,000.  

This is the stage where you have all the cards. After work starts, it becomes much harder to switch builders, and builders know that. 

Make sure the builders know that they are in a competition too – possibly by inviting builders back-to-back (so they physically see their competition when they arrive).  

Get 4-5 quotes, including some from extremely friendly (family) folks, who, even if they don’t do the work, will guide you in detail.  

This then gives you leverage and ammunition when speaking to everyone else.  

Because if you come across as someone who knows what they are talking about, builders will automatically start at a sensible price.  

You see prices range thus: 

1. £100,000 (crazy) 

2. £50,000 (expensive but in range) 

3. £40,000 (the sensible price) 

4. £20,000 (cheap, but not realistic) 

By running a competitive process, you usually avoid the “crazy” category. By sounding like you know what you’re talking about, you will start driving prices down from “expensive but in range” to “the sensible price”. 

2. Ask the Right Questions to Gain Knowledge 

Which brings us onto our second principle of negotiation. 

The more discovery and knowledge you have about your own project – but also the builder’s situation – the clearer you become on where the appropriate price should be. 

I would ask questions like: 

1. Are you VAT registered? How many people do you have in your team full-time?(this will give you a very strong indication of the builder’s annual turnover and therefore how much this job means to him as a proportion of his annual work). 

2. Are you working on other jobs at the moment? What are they? Can I see them? (seeing a few of his jobs will quickly give you a sense of the usual clientele this builder attracts – and it is good to be in a similar clientele usually. You don’t want a builder who just does the really cheap rental properties solely, or a builder who just does the really high end stuff. Because what they do day to day will influence what they know in terms of techniques, materials, and expectations from clients.) 

3. When can you start and how long do you have for this job? (this will give you a clear sense of where there is a gap in his calendar – which for builders means effectively a period of no money coming in – and the larger that gap and the closer it is, the more leverage you have). 

Talking to multiple builders will very quickly get you a good sense of all the information needed for the project. Use information and ideas one builder gives with others to see if it triggers thoughts.  

Your job is to be this catalyst for information and idea sharing until all the best ideas about your project are with all the builders in the running – and that way they can quote most effectively. 

Online research is also helpful, as are the suppliers. They will give unbiased perspectives and give you even more ideas of what is possible with the available products on the market. 

3. Be Crystal Clear on Scope and Budget 

A builder won’t put his best quote forward to a client who he knows will chop and change and isn’t sure about what he wants himself. 

So you need to take all that information and boil it down to an itemised list of jobs to be done and minimise chopping and changing as much possible after the jobs to be done are set. 

Because from a builder’s perspective if you add another item to the job, they have to think about the job in the round as a whole, as it can add to timelines, materials, external hiring they will need to do temporarily, and various other services they might need to avail of (with their own timelines) such as building control, scaffolding, architects etc.  

The second benefit of strong clarity is that you mitigate the single biggest reason for a budget ballooning at the end: new things coming up. 

A builder might quote you a great price at £50,000 – because he has quoted that in bulk. But if lots of small new things come up along the way, he is quoting for those in isolation, and you could easily end up paying £70,000 before you’re done.  

The way to minimise that as much as possible is to tightly as possible predict and itemise the jobs to be done. 

4. Get Advice From Someone in the Trade (If You Can) 

This may not always be possible, but if you have someone in your family or friends’ network who is in the industry, it can be extremely helpful to run quotes by them as they will be able to tell you what is reasonable or not. 

Do be aware though that the prices they will be able to secure will always be lower than the ones you are getting quoted. 

A builder is only dealing with you once, so they won’t give you a discount hoping for further jobs. While for a large developer who regularly has juicy projects for them, they will offer a great rate because it means regular work for them even if it is slightly lower margin for them. 

So if your industry contact is getting quote £5 per square meter on carpets, and you’re getting quoted £18 per square meter, that might actually be perfectly fine. They may be getting both an outrageously good price plus the further discount of a long term relationship, while you are buying a smaller amount one-off. 

But as an aside, if you are doing some further major works in the coming year, you should openly tell all the builders that. They will then know that if they win this job, they will be first in line to win the next job after that too. 

5. Be Budget-Conscious in Your Language and Energy 

The vibe you carry yourself with is vital.  

There is nothing quite as big an own goal as telling a builder “this is our dream home and we want to do it right” and giving the vibe that you are willing to spend whatever you need (even if that is exactly what you are willing to do). 

It’s just human psychology.  

If you are clear that there are constraints and you are on a budget (we are always on a budget – just depends how big!) that will feed through into your conversations with builders and with your wider family. 

Push workmen who give you a quote too by asking them “is there a cheaper way of doing this which will look or work just as well?” 

Workmen often won’t bring this natural creativity to the table, but when you push them or give them constraints, it’s often all that it takes for great ideas to come forward. 

The other reason vibe is important is if you have a bigger house or drive a nicer car. Automatically you should anticipate a 10-20% premium on quotes. The only way to counteract that is to give a clear and believable story (truth is best) as to why you may be living in a nice house but are actually cash strapped. “I recently bought this and only have a little bit of cash leftover now” is a good one. 

6. Choose the Best Value Builder—Not Just the Cheapest 

Everyone has a different skillset, a different standard of “good” and a different understanding of aesthetic and what is a great finish. 

Qualifications matter. Ability to work to a certified standard and pass building controls all matters. 

In our particular project we didn’t go for the cheapest builder  (50% cheaper than the one we went for) because we felt that the ones we paid more to would be better because: 

1. We felt that the lower quote wasn’t realistic and would inevitably creep up over time so we’d end up in roughly the same place (but with a lot of annoyance and heart ache along the way). 

2. Their finish and aesthetic much more closely matched ours. And ultimately the thing that you have to live with day to day is the external veneer and finish of all your building work, not the structural or masonry work. 

3. Their comfort levels with building regs and certifications was much higher. 

4. Their comfort with invoicing, itemisation, professional communications, timeliness were much higher. 

5. The skill set level of the guys we went with was just generally higher. 

The single biggest weakness we have in our community is we go for the cheapest option – and then we come to regret it. 

I’m also not saying go for the most expensive option. 

I’m saying, go for the cheapest option that can do the work to a great standard. 

Ultimately, if your house is damaged then this will end up costing you much more to rectify so its worth paying that extra just to get it right. 

7. Negotiate hard then back off, negotiate hard then back off 

This one is vital. Negotiation when done right doesn’t feel bruising – it feels like an elegant dance. 

It’s as much about human feeling and emotion and reading the other person as it is about money. 

In the first competitive round you should be robust and push the builders hard on price. That’s fair and everyone expects it. 

So let’s say the price you are willing to pay is £50,000, you should push them down to £35-40k. 

You should do this knowing that inevitably costs will drift up and new things will come up and you’ll end up at £50k more or less anyway. 

But if you didn’t fight hard for that £35-40k, the price is still going to drift up but now you’re at £60k total. 

And you know the wonderful thing? If you drive down to £35-40k and then the builder can get it back up to £50k – he actually feels happy about that.  

And a happy builder who feels like he’s winning and making money is at the heart of getting a great job done. 

So by you negotiating aggressively at the start, you create that breathing room for builders to what builders do: add on extras. 

(It’s not their fault either, it’s just the nature of the business.) 

Typically there are 2 or three phases to any big building project. There is the core masonry and structural work, then the wall prep and plastering and then the finishing (electrics, fittings, painting etc).  

At each phase it is best practice to negotiate hard and clip things down by 20%, knowing that you will expand into that price fully by the end (due to unforeseen costs).

Ask your builder to quote for labour and materials separately as well.  

There is a lot of margin some builders can make on the materials, so be clear with them that you will handle all payments directly and then you are only really negotiating over labour. 

Understand though that builders will often have trade accounts with supply merchants and may get discounts and credits and bonuses for using that merchant so they may make extra from the purchases they make for you.  

I would recommend just letting that be. As I said earlier, a happy builder is a good builder. And you want everyone to be winning.

Also, it is the Islamic way to be lenient on things. 

Jabir reported: The Messenger of Allah, peace and blessings be upon him, said, “May Allah have mercy on a man who is lenient when selling, buying, and seeking repayment.” (Bukhari) 

8. Get things in writing and sign documents 

The other vital Islamic teaching is to get contracts written and signed and witnessed. So as much as possible you should formally agree things over emails and signed documents. 

Even WhatsApp conversations are helpful on a day to day basis, rather than just verbal conversations. 

This can help you and the builder clarify thoughts, flag up any issues, and keep things organised (as people forget things). 

Concluding thoughts 

A negotiation is not about taking chunks out of the other side. It is about finding a delicate balance where both sides are happy and feel like they are winning. 

To get there you need to move carefully, sensible, with emotional intelligence and gather all the data you need to make a rational decision. 

Done well it can be an enjoyable experience, save you a fair bit of money, and forge relationships built on trust with builders and tradesmen you can do business with and recommend to others for years to come.