Well, it has to happen every now and again. I write a blog post regarding some of the things we are experiencing here at the construction company. Over the last couple weeks this has been a topic we have been going over at the office. It is such an important part of what we do. And as we grow in business, learning how to better serve the client has to be the goal. This is what I've come up with. I would really like to know your thoughts in response.
So, you’ve met with some contractors and identified your desired changes and the purpose of your changes. You received three estimates. Are they equal in scope? How will you know if they have all proposed the same process? For instance, if you’ve asked for changes to be made to a bathroom, has each contractor evaluated the roadway for placement of a dumpster? Has each agreed to set and keep a schedule for the job? Has each evaluated the risks of hiring sub-contractors outside of his own company? Has each agreed to design the project?
The process of building or renovating is often oversimplified for the sake of selling a client quickly on the effortlessness of the building process. What you are essentially depending on a contractor to furnish, whether implicit or explicit, is some form of management. There are several steps laid out between estimate and the start construction date.
An estimate or ‘Free Estimate’, as they are often sold, is a guess. No matter how much experience a builder has, when you ask for an estimate, you are getting a guess. Some builders like to guess low in order to hook more clients, some like to guess high in order to make a bigger margin on the work they do win, and some are adept at guessing that middle number. An estimate should not be how you choose your builder. That would be like choosing your accountant based on having them guess how many jelly beans are in a jar.
Often when we think of design, we think of floor plans and elevation drawings, sketches and renderings of what we want to see. Like an iceberg though, there is far more below the surface, and, like an iceberg, most of us don’t want to see it. True some people are willing to rely on reputation, however: Town permits, Contracts, Lien waivers, Insurance, Scheduling, Sub-contractor bids, MEP schematics(Mechanical, Electrical, Plumbing), Product Specifications, and Engineering(to name just a few) are not things you want to guess at.
I believe there are more good contractors estimating high than there are good contractors who either estimate low or middle. Why? Because if I value my work, I want to ensure that I can afford to complete the work to my standards and I want to be paid for the bulk of the work(the iceberg). That doesn’t mean we can’t work together if you need to meet a budget. Having a budget makes proper management of your project more important.
It can be scary to begin a project. The appeal of reducing the uncertainty of the cost by getting quotes and choosing based on the numbers is at best a comforting illusion. I suggest that working with a contractor should be a conversation. Work with someone you feel is honest with you about the cost and mark-up. Work with someone who isn’t trying to sell you a price. Work with someone who is willing to adjust the books when an estimated cost drops way below the initial evaluation. And definitely work with someone who protects the value of your investment in the work by ensuring that it adds value to both your property and quality of life and doesn’t take any risks by omitting important steps in planning.
I suggest picking the builder who offers the best design for your whole project, and who doesn’t try and comfort you by telling you how simple and easy it will be to do. An estimate should appear to be thoughtfully written and provide some level of detail, though it shouldn’t be taken as a quote. As a homeowner, you’d be selling yourself short. If you are working on an estimate as a quote basis and your contractor hasn’t asked you for a change order (more money), then he probably estimated high and you could be overpaying.
I am happy to provide free estimates on most jobs. What makes me happier is taking the time to carefully craft a design for a project, by which a clearer understanding of the cost can be attained. My estimates are high, because I believe in my work and I don’t believe in hooking people with a price that is too low to provide quality of service. That’s not fair to the client, and it doesn’t properly manage their expectations. I also don’t believe in aiming for a middle number, as that doesn’t leave much room for error. Spending too much time on estimating can be a huge drain on the business and distract us from the people who have committed to working with us.
Depending on the size of your project, we may charge a design fee. If you move forward with a design agreement, you can expect a bid package which will lead to an accurate contract price based on cost and mark-up. This will lead to a construction agreement contract which can often be lower than the initial estimate, and will always have your best interests protected.
Let me know what your experience has been in the comments down below!