What goes into a good general contractor’s estimate?

When discerning a contractor to work with for a build project, such as a kitchen renovation, new deck, or some finish work in your master bedroom, it’s important to know and understand exactly what you’re getting for what you pay for. Renovation projects often aren’t cheap, so your hope is to get high quality work.

Why does the quality of the general contractor's estimate matter?

Setting the standard for communication

In evaluating the quality of a general contractor's estimate, it’s important to highlight the importance of transparency. In an ideal world, an estimate is the first step towards transparent communication between the contractor and the client. Including as much information as possible, in a way that is easy to understand, is a key function of the build estimate. If information isn’t being conveyed in a clear and understandable way, a client may be underpaying, or overpaying, without actually knowing it. Or there may be design elements that are being left out without them realizing it.

Risk of poor craftsmanship

Along with online or word-of-mouth reviews of a general contractor, estimates can be an indicator of great or poor craftsmanship. If an estimate is vague or looks incomplete, always ask questions to the contractor. Since you’ll be spending a decent amount on your renovation, you want it to look right, and be done right, the first time. The contractor is not the only one doing due diligence during the build estimation process. You’re also determining whether or not the contractor is trustworthy enough to be handed the keys to your renovation dreams.

What makes up a “good” estimate?

There are several components that make up a good build estimate, including:

Scope of the work and analysis of the building site:

This helps both parties understand exactly what the contractor plans to do, and how well the project can be done based on the environment in which the work is being done.

Materials

This is pretty self-explanatory, but it’s important to note that the estimate should include not only what materials are being used, but an itemized list of quantities and variations of materials that might be needed as well.

Labor costs

This will determine how much you’re paying the contractor (or associated employees or subcontractors) on top of the cost of materials and equipment. The labor costs can sometimes indicate the quality of work you’re receiving, depending on whether the labor costs are higher or lower. Don’t rely only on the projected labor costs to determine whether the contractor is reliable, though.

Subcontractor input

If the contractor needs to hire any subcontractors for the job, it should be included in the estimate as well. This would be a place to name the subcontractors and provide their scope of work, materials, costs, etc. Think of it as a mini-estimate within an estimate.

Contingency allowance

This is extremely important to include in the build estimate. There will always be unexpected road bumps in the renovation process, so having a small percentage of funds set aside for unexpected expenses, side-projects, or need to go over the projected labor costs is a good idea to include in the estimate.

Profit margin

This outlines how much of a profit the contractor will be taking, in addition to all other costs. This ensures that the contractor can allocate funds to pay for other aspects of their business.

How to evaluate a contractor’s estimate?

The most important things to look for in detail in a build estimate is an itemized list of al costs, as well as ensuring the contractor has the necessary insurance and building permits to complete your renovation. It’s also a good idea to compare the contractor’s estimate to other bids as well.

Choose SJ Carpentry for your next building project

Looking to get started on a renovation for your home? Or looking to build something new outside, like a deck, pergola, or pavilion? SJ Carpentry can help you through the estimate process. We prioritize transparent communication to ensure that our clients are certain they're making the right decision partnering with us. Click below to get started today.