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How To Read A Contractor's EstimateBy Jim Sulski Summary: Jim helps you decipher a contractor's estimate and select the best person for the job. When the couple decided to go ahead with a bathroom remodeling project, they
spent several days interviewing contractors. After receiving a few estimates,
they went with the best price and the work started. The project seems to be going smoothly until the contractor started installing fixtures in the bathroom: A plastic-handle faucet, an off-the-shelf discount toilet, an acrylic tub and a wood laminate cabinet. The couple thought they were getting a brass faucet, a quality water-saver toilet, a cast iron tub and a solid wood cabinet. The contractor explained to them that those items weren't built into the price on the estimate. In the end, the couple wound up spending several extra thousand dollars for the fixtures they wanted and learned a valuable lesson in home remodeling: How to better read an estimate. This scenario is not uncommon. While homeowners may scrutinize potential contractors for hours, they spend minutes glancing at estimates and seem to be motivated by one factor: The price at the bottom of the sheet. While price is important, don't base a home remodeling decision on an estimate's bottom line. That's where you can get hurt like the couple described above. In fact, the lowest estimate may be far from the best. Instead, the best estimate spells out exactly what the job entails. Part of the problem with estimates is that, unlike a contract, there is no standard form, although there are generic bid proposal forms. Hence, no two estimates look the same. Estimates will also look different depending on the amount of work to be done. INTERPRETING ESTIMATES The key to interpreting and comparing estimates is being able to compare apples to apples. The best estimates explain every detail about the job on a line-by-line basis, including specific costs. Te estimate should sort of resemble the contract as much as possible. Of course, the bigger the job, the more elaborate the estimate should be. The more details it contains, the better for all parties involved. For example, while a dollar amount scrawled on the back of a business card - or even a verbal agreement - may be legally binding, to best protect yourself, get it in writing. In addition to product and materials cost information, cost items on the estimate should also include labor, work by subcontractors (have this detailed), and as well of a breakdown of something called "general conditions". Under the general conditions section, contractors usually include the cost of such items as building permits, debris removal, and house cleaning when the job is completed. By spelling those things out, you know what the contractor is charging you for the work. In addition, you're assured he's taking care of tasks such as debris removal. Even with a small job, such as having a porch painted, a homeowner should have the contractors spell out specifics. The estimate should list, for example, if the contractor is going to scrape any loose paint, sand, caulk, which manufacturers' paint he'll be using, how many coats of paint he will put on, and whether it's a flat or semi gloss paint. The estimate should also specify how the contractor expects to be paid. For example, half up front and half at the completion of the job. Such specifics will also help a homeowner determine why two estimates may have a difference of hundreds or thousands of dollars. Reputable contractors will be fairly close in their estimates. In the case of a wide discrepancy, acquire yet an additional estimate to better compare the first two or three. In fact, a seemingly overpriced or sketchy estimate may be a sign that the contractor really isn't interested in your project. TIMETABLE, UNFORESEEN CIRCUMSTANCES In addition to materials and labor, a good estimate will include a time frame for the job. While contractors are professionals, they're not psychics. Hence, a good estimate will include information about "unforeseen circumstances". There are conditions that the contractor simple can't ascertain until the job is underway. For example, the most typical case involves the decking beneath roof tiles on a roof replacement. It's usually impossible for a contractor to know if the wood decking beneath the tiles needs to be replaced until the tiles are physically removed. To protect yourself, have the estimate to address unforeseen circumstances.
© by Jim Sulski. All rights reserved. February 9, 2005. NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher. © 2005 by Ilyce R. Glink. Distributed by Real Estate Matters Syndicate. |
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