All Estimates Are Not Created Equal!

Let the buyer beware: If it sounds too good to be true that's because it is!!!!

I've lost many clients to contractors who provide estimates that present a far lower cost to the customer, only for the customer to end up paying MORE in the end due to hidden costs and - Duh, duh, DUHHHHH - change orders. Some of those clients even hired us later to finish the project because, get this, the contractor they originally went with wasn't honest!!!

A quick anecdote.

A couple of years ago we lost a bid to build to a contractor promising sunshine and rainbows to a wonderful couple in Winter Garden. The project was simple enough: A first floor patio with covered walk-out balcony above it with access via French doors to their master bedroom. We bid. He bid wayyyy lower. The customer decided, obviously to choose the contractor who could bring the project in significantly under what they had budgeted. Totally understandable... and ultimately a bad move.

As my dad likes to say: Some guys really do put the "CON" in "contractor".

I'll continue this story by jumping to the end: It's two years later and the patio/balcony are not done to my knowledge.

Anyone can sell a $40,000.00 job for $25,000.00. I can do it in my sleep. There's literally nothing to it. $25,000.00 for a job, compared to $40,000.00 sells itself. Every. Time. But when you sell a $25,000.00 job, you have to actually be able to do the project for that cost. On a $40,000.00 job, it's not even close. To be able to bid so low on a project worth significantly more requires unprecedented levels of dishonesty, mental gymnastics, and just plain incompetence.

A good rule to follow is that the most thorough estimate is probably the most honest. They also tend to (for obvious reasons) fall on the more expensive ends of estimates that you will see. Think about it: you call two different contractors to bid your master bedroom addition.

Contractor A: Comes to the jobsite. He measures your home, evaluates the space, checks out your countertops, cabinets, flooring, the general "feel" of your house and it's components to give you a good match with regard to your soon to be added space. He also takes the time to scope out where the dumpster will go, checks your electrical panel to make sure there is space to accommodate more circuits, checks your plumbing, evaluates your roof line, and checks your HVAC system to see if it needs an upgrade. He provides you an estimate in a week or so which clearly details every single step of your addition, down to how much the port-a-john will cost to have for the duration of your project. His final job cost comes in at $76,491.43.

Contractor B: Comes to the jobsite. He spends some time looking around, maybe even takes some measurements. You talk for a bit about what you'd like to do, and maybe even what types of finishes you want for your ensuite bathroom. Off the hip, as if it were impressive he throws out a number: "yea I can get this done for $60,000.00".

That's a cool $16491.43 savings, right? Well, yes. Maybe. But probably not. Now, I'm not saying that Contractor B can't do the job for $60,000.00. But the chances are slim, and the risk is high. What if the electrical pane does need an upgrade? What if he didn't factor in sizing up your HVAC? Did he check your plumbing? Did he account for the fact that the flooring you have set in your mind costs $4.00/square foot?

Bottom line here is: thorough estimate beat cheap estimates any day of the week. It may seem like you are paying more, but you are paying for professionalism and peace of mind. And I promise you that you will have a better construction experience because of it.

Now this isn't to say that estimates do not vary among honest contractors for a variety of reasons. General enthusiasm for a project, risk, level of specialty, difficulty, time-to-complete, availability, location - all of these things can produce wildly varying estimates for the same job.

For instance a contractor who specializes in high production, track-home framing may cost significantly more "mulah" than a guy who specializes in kitchen and bathroom remodels if you ask him to bid your kitchen and bathroom remodel. Chances are in this case that the guy who DOES KITCHEN AND BATHROOM REMODELS for a living is more equipped to handle it, and thus costs less. Oh, and he may even do a more timely and higher quality job, too!

Bottom line here: contractor's differing areas of expertise can produce discrepancies in estimates.

Another reason estimates can vary has to do with schedule saturation. A contractor with five different projects going (and thus is pulling his hair out everyday for five different reasons already) may politely "bid himself" out of your project by throwing an estimate out there that is significantly higher than what he otherwise might have is he weren't so busy. Contractors call this tactic "bidding it like you don't want it". Simply put: they are bidding high on purpose to tell you to go with someone else. Though, if you take a bid like this know that your contractor will happily oblige you as they are making a premium for their time.

The other side of this coin of course is the contractor who can't BUY a project. His estimate may come in unusually, even suspiciously low. Sometimes this can be cause for concern, as the title of this post implies. But sometimes low bids are simply a decision rooted in supply/demand economics. When demand is down for a contractor's services, his prices may fall accordingly.

Risk represents a place where estimates can fork off from one another. A contractor who is more risk-averse may shy away from jobs that contain a potential for lots of hidden damages, not wanting to open himself up to unforeseen liabilities once he gets started. This is usually reflected in higher bids upfront, and sometimes with very finely tuned scopes of work that mitigate his exposure if things get crazy.

But by far the most common reasons for estimates to vary is this: there is no handbook. Well, there is actually. But no one reads it. Well, actually they do. We are all tested on the book on our Contractor's exam. It's called "Walker's Building Estimator's Reference Book 31st Edition" Check it out here.

Books aside however, it's important to remember that there is no hard and fast rule on how to estimate. There are guidelines and recommendations, but more often than not estimates are written with a companies' goals and current/future prospects in mind.

So next time you're sorting through the sea of paperwork that are contractor's estimates remember: all estimate aren't created equal. Sometimes it's mental acrobatics, or just plain dishonesty or incompetence. But sometimes, probably most times, varying estimates on a project represent different economic dynamics. Risk, enthusiasm, availability, area of specialization - these are all reasons that estimates go up and down.

In the end the important thing to do when choosing a contractor is to find and build a relationship with a reputable company who you PERSONALLY feel comfortable working with. And after finding the right guy, make sure that he provides you a comprehensive estimate that breaks every facet of your project down in plain, boring, mind-numbing detail. This will ensure that you have a good experience and are left with a space you love to own and use.

As always if you have questions about estimates, or want to schedule one visit our contact page or give us a call today. Happy renovating y'all!