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Can I
have a free estimate? All construction projects have to start somewhere. Perhaps you’re considering an addition or
renovation of your home and you have sketched out some ideas or you have some
magazine articles that capture the essence of the finished project. Before you commit too much emotional
energy, you’re understandably anxious to know what these ideas cost. I am faced with this scenario virtually every week. As the owner of the company, I perform all
the estimating on our sales leads. I
have always strived to provide honest reasonable information to sales
inquiries. Yet if I was not a good
steward of my time, my entire week could easily be spent just pricing
work. It has become necessary over
the years and through our continued success (which only invites more
estimating work) to develop the following estimating policy. I realize that there are many contractors to choose from
for your construction project. On the
other hand there are many potential clients to choose from for our work. I believe it is in the best interest of
both of us, the owner and the contractor, to get to the bottom line as soon
as possible. Let me explain one way of
accomplishing this task. A brief education and some common sense
RCB has been in business for 17 years and the majority of
my business has been renovation work.
In most cases, it is fairly easy to predict an average cost for a
project quickly; even at a first meeting.
For example, the average starting price for our additions is $135.00
per square foot (Spring 2004). I know
there is very little chance of any exact, carefully detailed estimate coming
in under this number. The detailed
estimate will only verify what I already know from experience. I believe average square foot construction
costs are an excellent place to start when discussing the feasibility of your
project. If
your expectations were substantially different from the square foot
construction costs, it is far better to know sooner rather than later. This is called the qualifying process. You are qualifying RCB as a contractor and
I am qualifying you as a potential client.
If my base costs are less than your budget, we’re qualified with
respect to price. If they are more; we
have work to do to try to close the gap.
If the gap is irreconcilable, then we have the benefit of knowing this
important fact now without further delay and effort. Once we can move beyond this initial
information: somewhere between
sketches and full preliminary drawings and the determination that we have a
mutual understanding of probable cost; it is desirable to get more specific
information. This is an excellent time
to make a hiring decision based on references, reputation, experience and
availability and on estimated costs. But
that’s not the traditional way……. Perhaps you are more familiar with a process that goes
like this: The contractor blindly
invests many hours at this preliminary stage preparing detailed (and free)
estimates against vague or unknown conditions. He competes against other builders looking
at early drawings that represent perhaps half the project but leave out most
of the specifications. Each builder
calls with his own questions. Ideas
and suggestions start to emerge on how to best execute the work. Everyone ‘promises’ quick service: first the contractor to get back with his
price and then the owner to get back with his decision. Not all the ‘bids’ come back on time so
everyone waits (expect to double whatever time frames are promised). Finally, the owner then compares, sometimes
with experienced help, what is assured to be ‘apples and oranges’ proposals,
all with plenty of room for a contractor to change his price at a later time. And the winner is……. (the
contractor who doesn’t get hired!) This grueling process of attrition actually
works some of the time. However, and
in my opinion, it is the source of most of the ‘horror stories’ that malign
my profession. I would like you to consider
a different approach in a few moments, but before I move on I hope you will
bear with me as I make one more important point. I feel that if you want a free detailed estimate, one that
can be compared against another estimate, you need to pay for complete bid
documents. These are final plans,
fully designed and all materials specified or allowances given by
others. Ironically, no architect,
engineer or designer will go to these lengths without being paid. Thus to be asked for a detailed price on
preliminary drawings which will be compared for cost against other ‘bids’,
forces the contractor to specify the project.
The contractor is now in a conflict of interest situation. In an effort to win the project, it is
common to specify as low as possible, rather than being realistic about the
probable final cost. Enter the
proverbial ‘low ball’ price. Let’s be real honest for a moment. Without exception, the scope of work
changes from the preliminary drawings to the final drawings and therefore the
price changes as well. Usually the
price goes up. Once remodeling work
begins, the ‘unknowns’ start to surface and there are always more
scope and price changes. Usually the
price goes up again. To ignore this
phenomenon is folly. It is entirely possible to hire a lower priced contractor
and pay more in the final analysis than perhaps a better qualified
runner-up. Many under-priced
preliminary bids are made profitable by over pricing the inevitable changes. The solution is to know the contractor’s
reputation based on the personal testimony of his references and to have an
agreement as to how future changes will be priced. This forces each contractor to stand by
their original price and not impose a premium on changes. But even this strategic maneuvering, if successfully
carried out, is a potential nightmare because forcing a contractor to live
with an underbid price is no picnic either (to say nothing about trusting him
in your home) and you find yourself asking: What is
the diligent owner to do? I would submit the following steps for your consideration: 1.
Qualify your contractor based on the following
criteria in this order: Integrity,
Leadership, Service, Craftsmanship and price. 2.
Recognize that renovations are vastly different
from new construction. Your renovation
contractor comes into your life every day.
His worksite is your home: your
kitchen, your bath, your bedroom. Perhaps you will agree that low bidding is
best left for new construction work.
Hire the best qualified contractor that you can afford. 3.
Problems that occur in new construction are thus
amplified in renovations. Trust and
good problem resolution skills are highly desirable. Call your contractor’s
references and ask how he handles problems and emergencies. Does your contractor demonstrate
leadership? 4.
You are busy.
Having your home remodeled will be stressful, even on the good
days. Little things matter a lot. You come home after a long day to find a
dumpster blocking your garage.
Someone left the front door unlocked.
There’s a note that you need to make several decisions tonight. Will your contractor plan out the decisions
that you have to make, so that you have time to consider options? The little things add up to a big
difference in the overall service you get.
What do his references say? How
does your choice stand up? 5.
Know that nothing lingers like a job well
done. All of the challenges and
problems are worth the effort if you are truly pleased with the finished
product. Well designed and well-built
will make the project fun and your friends envious. (In case you are wondering why this isn’t
first on the list: you’ll seldom have
a problem with craftsmanship if a contractor has items 2, 3 & 4 under
control.) 6.
Regarding price:
If it were my house and I was doing the hiring, here’s how I would
proceed: I would discuss budgets and
try to understand how my project would be priced and managed, what the
biggest price drivers are and how to control them so they don’t get out of
hand and sink the project. It would be
important for me to have confidence that I could get most of what I wanted
for my budget and to know that my builder was giving me realistic information
on the project. I probably already like his reputation and personality and I
want to confirm my unspoken choice by understanding how he will arrive at the
final cost. Once satisfied, I would
select my contractor. I would then
proceed to design the project to my budget.
There would be an official price check upon completion of the final
drawings. My contractor would have had
ample opportunity to warn of cost problems as he was hired at the start of
the design process and monitored the progress. My early hiring decision would earn me a
reserved place in my contractor’s schedule and we would begin work promptly
after the final price check. If you follow these steps you should be able to move
forward using a team approach of owner, designer and builder and produce a
fine renovation. I hope this frank
discussion helps you in that effort. My Policy
Having shared seventeen years of experience in this single
document, it should be no surprise that my policy is to give an estimate of
probable cost based on square foot construction costs at no charge and reach
an early decision to work together. I
can then invest my time in your project with confidence and help design a
plan that will be within your budget.
Unless the design work is extraordinary, the consulting time is built
into the total price and there is no retainer or deposit required. In the event the design process is
terminated for any reason, time invested will be billed at the rate $55.00
per hour plus any expenses. A copy of
this agreement will be attached. I
look forward to working with you on your project. Sincerely, Michael Roarke President Roarke Custom
Builders, Inc. Updated
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