Paid preconstruction explained

Free quoting eats weeks of estimating time, and most of those quotes never sign. Paid preconstruction fixes that by charging the customer for the work that produces the price. Charging for it is more accepted than it used to be, and it filters out freebie hunters.¹

What it is

Paid preconstruction (also called a preliminary agreement, design agreement or professional services agreement) is a paid stage between the first meeting and the building contract. The customer pays a set fee. In return you take the job from a brief to a fixed price: concept or plans, a detailed estimate, selections and a scope both sides understand.

It’s a separate agreement to the building contract. It covers your time and your consultants’ time up to the point where the customer decides to build.

Why it matters to a builder

Pricing a project properly can take three to four weeks once plans go out to trades and suppliers, and a builder may sign only one or two of every ten quotes. Even a preliminary estimate can take about two weeks.² That’s a lot of unpaid work for jobs you won’t build.

A fee changes who you spend that time on. Customers who pay have committed, and those who won’t pay usually weren’t going to build with you. One builder running a $3,300 design stage says a little under 90 per cent of customers who start it go on to build.³ Another, with a similar $3,300 stage, says fewer than 5 per cent drop out, mostly because the budget didn’t fit.⁴

If a price takes weeks to produce, charge for producing it, and write down exactly what the fee buys.

It also protects your margin. Quick prices leave allowances and extras to show up later, after the contract is signed.⁴ A paid stage gives you the time to find them first.

How it works in practice

Most versions follow the same path:

1. A screening step: a questionnaire or phone call covering budget, previous builds and how many builders they’re talking to.
2. A free first meeting. One builder offers a free hour and a half meet and greet before any fee.⁵
3. The paid stage: a set fee covering an agreed number of costings and design meetings. Engineer, architect and energy reports can be billed straight to the customer.⁵
4. The fixed price: a detailed proposal the customer can sign as a contract.

What builders charge varies a lot by market and by how much design you do:

What builders described	Fee	Notes
Fees seen across markets	about $300 to $3,000 or more	depends on the market and depth of the estimate1
Design stage with drawings, estimate and selections	$3,300 base fee	covers about 75 per cent of that builder’s drawing costs3
Basic paid quote	never below $2,500	higher tiers sold at $7,000 to $8,000 and $30,000 to $40,0006
Engagement fee, Brisbane	$5,000 to $10,000 by job size	taken off the price if the customer goes ahead7

Some builders run tiers. Harry Buckley prices a “done for you”, “done with you” and “done by you” option, depending on how much work the customer takes on.⁶

Credit it back or not?

Builders split on this. The Brisbane builder above deducts the fee from the contract price if the customer proceeds.⁷ Others argue the fee pays for a service already delivered, so it shouldn’t be credited later, and a paid estimate should be more detailed than a free one.¹

Both work. What matters is that you decide before you start and the agreement says so.

Common confusion

“It’s a deposit.” It isn’t. A deposit is part of the contract price under a building contract. The preconstruction fee pays for work done before there is a contract. Keep them on separate paperwork. State rules on deposits differ, so check yours.

“Customers won’t pay.” Some won’t, and that’s the filter working. One Brisbane builder lost a customer who refused the fee and went to three other builders instead.⁷

“The fee has to cover all my costs.” It doesn’t have to. The $3,300 fee above covers about three quarters of drawing costs. The builder treats it as the customer putting skin in the game.³

“Paid prelims always convert.” They convert best when budget is talked through before the prelim starts. If the first number a customer hears is unrealistic, they can pay for prelims and still walk away at contract.

Where to next

The paid stage works best when you’ve screened the lead first. Read How to qualify a lead before you quote, then Estimating mistakes that eat your margin.

Footnotes

1. The Professional Builder, “If You Price Jobs Like THIS, You Are Bleeding Margin”, The Professional Builder (podcast), 2026. https://www.youtube.com/watch?v=5s-d1-Ih8aU ↩ ↩² ↩³

2. Jared, “Why 70% of Home Designs Fail: Jared on Pricing, Trust and B4UBuild.com.au”, The Good Builder Podcast, 2025. https://www.youtube.com/watch?v=Ut_JDIapW-k ↩

3. The Professional Builder, “How To Hit A 90% Quote Conversion Rate”, The Professional Builder (podcast), 2026. https://www.youtube.com/watch?v=Xo_vHc5-zlU ↩ ↩² ↩³

4. Steve Glover, “The #1 Estimating Mistake Attracting UNQUALIFIED Tire Kickers”, The Professional Builder (podcast), 2026. https://www.youtube.com/watch?v=npYB_j6-ZTw ↩ ↩²

5. The Good Builder, “‘Is It Craig Good?’ The Godfather of Building Shares 40 Years of Wisdom”, The Good Builder Podcast, 2025. https://www.youtube.com/watch?v=8xHojbu7XvM ↩ ↩²

6. Harry Buckley, “Why Accepting 10% Margins Forces You To Work For FREE”, The Professional Builder (podcast), 2026. https://www.youtube.com/watch?v=xnwH5GbgcDU ↩ ↩²

7. Charlie Mylne, “Brisbane Builder on Ambition, Fraud & Almost Losing It All: Charlie Mylne #66”, Better Builder Podcast, 2025. https://www.youtube.com/watch?v=qoDe5jEJhO8 ↩ ↩² ↩³