The Quality of the Quote

You need to know how much your renovation is going to cost. Period. The worst mistake you can make in the renovation process is not to have an idea of how much each stage of the process is going to tax your budget. We’ve seen renovations that started out as a wonderful retrofit of walls in a living room end up with bare brick and insulation remaining visible two years later, all because the project was not managed financially.

You are the customer and it is your responsibility to compare pricing for two main reasons.

  • First you need to make sure that the company you hire is pricing his quality work inside the spectrum of prices typical for a job well done. Too cheap and you might be dealing with a bottom-feeder that will not perform as you expect. Too expensive and you might be dealing with someone who can do nice work and wants big bucks, but lacks the experience to deal with the myriad of problems that can arise during a project.
  • Secondly, as someone in the ‘market’, it is likely that you will need renovation services again in the future, and as a family of businesses, property owners do each other a great service by simply hiring responsibly and ensuring that the herd of contractors that live and survive in a competitive market are improving their product over time and offering it at a fair rate.

 

Comparing Quotes

The easiest way to compare quotes is to make sure each contractor provides you with details about the same criteria. You should always ask for the information if they don’t provide it automatically. If they hesitate, then you have learned more about whom you are talking to. Getting everything in writing is key.

Items that you should make sure you get in a quote

  • Explanation of the project with key milestones and time-frames
  • Contingency for unexpected work expenses. Usually in the 12% to 15% range.
  • Materials that will be used, and options quality/price
  • Pricing Structure. Renovators will usually use one of two pricing methods.
  1. Fixed Pricing – this is simply a flat fee for the project and as such can be a bit of a gamble. If the project is successfully completed earlier than expected, renovator has effectively made more money per man-hour. But at least you get your home back sooner. If the project runs longer due do unforeseen problems, you aren’t paying for extra man-hours. Of course this is contingent on the faithfulness of the renovator to project.
  2. Cost-Plus Pricing – basically the cost of your chosen materials plus the labor, until the work is completed. Converse to Fixed Pricing, if the project goes under time, you save money. If it goes overtime you’re spending more than you budgeted for. Again you are a little at the mercy of the renovator’s good will. It’s not hard for any contractor to stretch out a project if they think things are completing to quickly.
  • Contractors and renovators often require Deposit, even if you’ve already signed a contract. It’s up to you to decide if you are ok with providing one. It’s a small percentage of the cost of the work and meant to be a sign of good faith on your part. Some economists think this is not a fair practice, considering they are a business like any other and should expect payment when the product is delivered. It could also be an indication that the company is not well capitalized and simply doesn’t have the money in the bank to buy the materials up front and pay workers while the job is in progress. One option you can entertain is to say that you will pay for the materials with your own credit-card, that way you get the points (if you have a points card), and you also own the materials if the deal goes south.

 

Lots to think about. Take your time. Happy Shopping.

Renowire Staff

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