In this post:
- Overview of what to look for in a quality estimate
- 4 Common Types of Estimates and our opinion of each
- An estimate checklist for you to download (no email address required)
- A link to information about our estimate and design process
When home owners are asked what their biggest frustrations with contractors are the second most popular answer is pricing (number one was they don’t call back, which is just crazy, and number 3 was not knowing where to find a good contractor). Complaints that the final invoice was much higher than what was estimated are common but frustrations also arise from vague payment schedules and undefined job costs.
There are legitimate reasons for variation in price. Different contractors have different levels of overhead and might pay employees more or less than others. And some projects might inherently have some unknowns (like mold damage or wood rot for example) or might be very difficult to estimate if the work required is unusual or not common.
But the majority of work in the remodeling industry is fairly standard and can be estimated accurately if proper estimating practices are used.
What’s in a good estimate?
I’m going to speak here specifically about remodeling estimates but the basics hold true for most construction estimates. I also left out some obvious things that I think most people know, like that the estimator should show up on time and look professional etc…
One tip that you might overlook is to take a look at the contractors truck. If its dirty and full of debris that could be a red flag. In general the way a contractor treats his tools, equipment and the people he works with are a good way to judge the way they will most likely treat your home. I’ve always thought it would be better to ask a contractor for references from past employees and subs they have worked with than to ask for project references… but I digress….
Here’s what to look for in the actual estimate:
- A good estimate starts with a design, typically a floor plan of the existing space and one of the proposed changes, a good design is based on accurate measurements. If your contractor does not provide at least a rough design or does not take accurate measurement during the initial visit I would consider that a red flag.
- A good estimate is itemized, each part of the project should be costed separately. This allows for a better discussion of changes that can be made if the estimate exceeds your budget but it also helps you to understand all the costs involved in the project. Sometimes a price can seem really high at first but when look at the itemized breakdown you realize you were not considering all the costs.
- A good estimate takes time to produce. Typically it takes at least 60 to 90 minutes of measuring and discussing the project and another few hours in the office. Estimates given on site after only a brief discussion should be considered ball park figures only.
Understand The Different Estimate Types
Ask you contractor what estimate process he uses, if he can’t specifically name the method and outline why it is reliable his estimate may be inaccurate. WAG and SWAG estimates should be used for ballpark pricing only. Cost plus or time and materials pricing should only be used when there are so many unknowns that other methods are not possible. Stick Estimating and Unit Cost estimating are the most reliable.
WAG aka SWAG Estimates
This is definitely not a recommended method but useful for quick, ballpark figures.
One common method is lovingly referred to as the WAG (wild ass guess) or SWAG (scientific wild ass guess). Using this method contractors guess the cost of a project based on “years of experience”. SWAG estimates are useful for ball park figures but are not reliable for accurate pricing of a remodel.
Cost Plus aka Time and Materials
Not recommended in most situations, useful when there are a lot of unknowns.
Cost Plus and Time and Materials contracts are not exactly the same but they are close enough for the purpose of this article.
A cost plus or time and materials estimate is not really an estimate, although it is often combined with a WAG estimate. Time and materials simply means the contractor will bill the homeowner for the exact time spent on the project plus the materials purchased.
Sounds perfect right? Maybe, but cost plus contracts are the most litigated and often cause friction between homeowner and contractor. It comes down to trust and an understanding of what costs should be included in a cost plus contract. An cost plus agreement should specify how hours will be tracked and what markup is allowable on materials. There are always going to be points of contention though…
Cost Plus or Time and Materials can be useful for projects with a lot of unknowns like hidden wood rot or termite damage.
One of the better methods, though time consuming and prone to error if not done carefully.
Stick estimating is “old school”. It requires counting all the individual items and hours of labor in a given job, applying a price to each, then adding in the cost of sub contractors and other costs to arrive at the final price. It requires a detailed set of plans to work from.
It is a very time consuming but accurate method. It can be prone to errors such as forgetting some small materials or labor components. We like to use stick estimating for very small projects or unique jobs where unit costing (see below) can be difficult to apply. We used to do exclusively stick estimating before we discovered unit costing.
This is the best method and the one we recommend.
Unit costing involves the use per determined units of labor and materials along with sub contractors and other costs to arrive at the job cost. The pre determined units, or assemblies, speed up the estimating process and reduce errors.
Assembly costs are based on regional standards but can be adjusted by the contractor. It also allows for regular updating of costs based on actual experience during the project so the system gets more and more accurate the more it is used.
Unit costing is good for the contractor because it is quicker and just as accurate as stick estimating but also makes it much easier to compare estimated to actual costs for individual parts of a project. This very useful for trouble shooting a job that is going over budget and for maintaining accuracy of future estimates.
For the homeowner unit costing provides accurate, itemized estimates that are very useful as tools for discussing the cost of a project. In a situation where the estimate is more than the homeowner has budgeted, for example, it allows them to review and adjust items quickly to see if the project can altered to meet the budget requirements.
Our Estimate Review Checklist
They way an estimate is performed can tell you a lot about a contractor. We are in the process of creating a few guides to help homeowners plan for a remodel the first of these tools is our estimate checklist. The checklist can be used for any project but we built it with a kitchen or bath remodeling estimate in mind.
[mdi-icon name=”checkbox-blank-outline” size=”default” color=”Blue”] What type of Estimate process do they use?
When asked they should be able to tell you their method, perhaps they do not use the terms we outline above but they should be able to describe it.
[mdi-icon name=”checkbox-blank-outline” size=”default” color=”Blue”] Do they take measurements?
A remodeling estimate without measurements is really just a guess.
[mdi-icon name=”checkbox-blank-outline” size=”default” color=”Blue”] Do they provide a floor plan?
A good set of plans is required for an accurate remodeling estimate
[mdi-icon name=”checkbox-blank-outline” size=”default” color=”Blue”] Is the estimate itemized?
An itemized estimate clearly defines the work to be done and shows a detailed thought process
[mdi-icon name=”checkbox-blank-outline” size=”default” color=”Blue”] How long did the estimate take?
Estimates done on site should not be trusted. If it takes a contractor longer than a week to get you an estimate that is also a warning flag
Read More About Our Estimate and Design Process
We use the unit cost method of estimating and utilize software to make the process more accurate and reliable. If you’d like to know more visit this page on our website: https://mcmanuskitchenandbath.com/planning-and-design-remodeling-estimate/. You can even download our Planning Guide from that page, which has samples estimate forms, contracts and designs from some of our past projects.
Thanks for reading,