What exactly is included in contractors' estimates

Question

Hi all. Im curious to know, when your contractors' give you a 10k estimate (for example) to rehab the kitchen in your house, what exactly does that include? How does he/she know the materials you want in the kitchen. Higher end finishes would obviously cost more. Or, when asking for an estimate do you tell your contractor which materials you are planning to use? Or does the estimate just include labor?

Jeff Bridges · Answer

I usually write out a "scope of work" and hand that to the contractor for him to price out each project for me. This forms the basis of our contract later on and is the reference point for which we go off to understand we have specific expectations for level of trim/ performance overall. It is important to set those expectations early on both labor and materials wanted or else the contract will not have any idea what you envision for your project. I find that some contractors don't usually have the time to draw out a detailed scope of work on their bids with all of the details, which leads to confusion down the line. You'll just end up disappointed with certain aspects if you don't create this document yourself setting these expectations for the contractor to understand pricing and to make sure they have the same idea you have when you say "Kitchen remodel."

So for example, I write out a section on "rental kitchen remodel" and write out the following sub-projects:

-Demo and Replace cabinets with real wood veneer, install nickel round hardware pulls.
-install faux marble design laminate countertops from home depot, drop in stainless sink, single lever faucet with no sprayer.
-Demo and install luxury neutral color vinyl tiles
-replace kitchen sink valves
-install new disposal, microwave, D/W, Range, Fridge. Add wiring for disposal if missing.
-replace kitchen light with XYZ model from home depot, replace outlets with grounded and new plates
-Paint walls eggshell Color XYZ from home depot 2 coats, base trim semigloss white- You can select paint quality as well if you care.

I pretty much do this for every part of the house. This is advantageous because you can match up your payment draws to project completion tasks so there is a fair draw schedule tied to actual goals instead of randomly paying them at a specific interval.

I hand this document to the contractor or email it and expect them to price out this and all other projects and then I can compare apples to apples with various contractors without figuring out if one is using a lower quality cabinet or trim in their bid since its spelled out. You can also provide a materials list with the home depot SKUs like some investors do so there is no confusion exactly what you need to have installed (if you have a preference).

I ask them to write the cost of each sub project so I can see where their costs are and who is charging more for specific tasks etc... This helps me pick out my contractors and also I can walk through this as a punch list at the end to make sure contractor has met all requirements before paying them the final 3rd or portion of the contract price. They don't get the final payment unless all projects are complete.

David Robertson · Answer

Hi Ramon,

A contractors estimate can have whatever the two parties (you and the contractor) agree upon.

It is your responsibility as the client & the rehabber to tell the contractor exactly what you want included in the estimate.

Any information that is left for interpretation will likely result in conflicts, so it's best to get the Scope of Work & Contract as detailed as possible to designate each parties' responsibilities.

Generally speaking, I will provide all of the finish materials on the project (tile, cabinets, plumbing/light fixtures, etc.).  The contractor is responsible for the labor & 'rough' materials.  By rough materials I mean 2x wood materials, grout, mortar, screws, fittings, plumbing lines, wiring, etc that are necessary to install the finish materials.

If you would rather have the contractor provide an all-inclusive estimate (Labor + Finish Materials) you need to provide the contractor the SKU#s & product information in the Scope of Work.

Here's a detailed Scope of Work that I put together for a project which can provide some of the level of detail necessary to avoid conflicts:

https://www.biggerpockets.com/files/user/drobertson/file/sample-contractors-scope-of-work-documents

Once you receive a Contractors Proposal, you should talk through their proposal & Scope of Work to ensure that both parties are on the same page before you sign a contract.

Account Closed · Answer

Hello Ramon, all your questions are correct and you're headed in the right direction.  The best thing I can suggest is to ask these questions to the contractor so you know exactly what's included.  Also be sure to read their terms and conditions, as those can bite you sometimes if you're signing up for something you don't know about.  Generally, the quote includes labor, materials, equipment, insurances and taxes.  If this is not spelled out, ask questions and get it in writing, even if it's an email conversation with the contractor or a texting string.  As the saying goes in the contracting business "a verbal agreement is worth the paper it's written on" which is to say, nothing.  Get everything in writing.  This is my opinion.

Larry Yinger · Answer

These guys detailing scope of work have it right on.  There needs to be zero ambiguity on the contract.  If there is ambiguity in the contract, it will open you up for change orders.  You can easily protect yourself by providing a detailed scope of work in your contact.  If schedule is important you should also include milestone dates in your scope of work.  Milestone dates should also be detailed.

Polar Prutaseranee · Answer

For me, it's just labor. I've gotten bids from other contractors as well, and it's usually the estimate for labor. Everything else you purchase and it tacked onto the price at the end.

What exactly is included in contractors' estimates

Most Popular Reply