Estimated reading time: 4 minutes, 18 seconds
In the world of residential remodeling, each contractor has a different method of explaining the price for a project. If the project is dynamic or complicated in any way, you may want several contractors to give bids on the project. I guarantee that there is going to be a difference in pricing of the project by each contractor. To justify the pricing of a project, a contractor will often try to itemize the price, in doing so, they are providing some transparency.
As a home owner, in requesting bids on your project, you might expect transparency. One school of thought is that the contractor should break down the price of every component to the client. Sounds good in theory, but it is just a numbers game. No one needs to, or gets to see the full monty, or look behind the curtain. At Levco we believe that a rough idea of the magnitude of investment is what every potential client wants to know. I describe this as my Opinion of Probable Cost.
Every contractor has a different overhead and a different way of looking at the project. I suppose providing pricing justification avoids the WAG (Wild Ass Guess) form of estimation. Who here has burned a day fixing what seemed like a small home project? I know I have driven to and from Home Depot or Lowe’s buying and returning parts. No contractor can afford to operate this way for very long.
The truth is, until you have selected the actual components that are going to be included in the project, any numbers will be an estimate. Upon understanding the specific information and minute details of a project I can produce a Contract Amount.
In one discussion group, there was concern that a client can get pricing over the internet for most materials themselves… OK, but can they estimate the amount of man hours required to do anything? Then there is the cost to handle and install the components. Oh yeah, don’t forget the miscellaneous pieces and parts that are needed to complete the task.
Assuming a contractor is insured or even licensed is a mistake, I just spoke to one that believes he and his sons are exempt from workman’s compensation. Who is he coming after when he injures himself on your project? Who are you going after when he ruins your home? Being in business is a big responsibility and it is expensive when you play by the rules.
Do we ask a surgeon for a cost breakdown before we have a procedure? Yes, the bill is typically somewhat itemized by the hospital, but we don’t know what he pays his staff or what he takes home or what his insurance costs. We are asking them to do the job for a fair price, and do it well using all of their wisdom and experience as well as their expertise in the field. There is never a conversation about providing your own materials. I look for those that I can trust completely, rather than asking “How much?” I ask, “When can you schedule me in?”
The same goes for contractors. Sure you can get a second opinion, sure you need to be confident that the contractor can, and will do a good job. Sure you need to be confident they will treat you fairly when it comes to pricing.
Transparency has been used as a weapon against me, and is therefore something I discourage. The closest Levco gets, is to provide an À la carte option for those that want to approach their project in phases.
A “Contract Amount” coupled with a precise DOW is the method I use. In speaking with folks that have had difficult remodeling experiences, a common thread in taking the low bidder seems to be a poorly or loosely written DOW, which leaves you open to unforeseen Change Orders for work the contractor ought to have included.
Let’s face it: the art of estimating is a very challenging and time consuming task. I love it because I can usually come in on target baring any unforeseen problems. If something minor happens that wasn’t expected, no big deal… if some part of the project goes better than expected, well, it all comes out in the wash. Who I use to perform those tasks and what they are charging me is proprietary.
The bottom line is that just because your contractor is reluctant or refuses to provide transparency does not mean they are not honest or are being deceitful. My suggestion is to select your contractor like your physician, based upon reputation and relationship.
Your comments are welcome. To ask questions or get more information about remodeling email me directly or visit our contact page.
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