How to Accurately Compare Remodeling Estimates

Written by Bryan E. Jennings of Bryan E. Jennings Contracting
Updated August 23, 2016
Remodels can be pricey, but understanding how to accurately compare estimates can help you save money. (Image by Brandon Smith)

Whether you are building a house, adding a room or remodeling your home, you need to get at least a couple of estimates.

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You’ve scoured Angie’s list, read all the reviews and have settled on three contractors for your home improvement project. You’ve met with each of them and now have multiple estimates to compare.

While each contractor has great reviews and seemed more then capable to handle your project, the estimates are vastly different. Some would advise you to throw out the lowest and the highest estimates, while your gut reaction is to go with the best deal. But before you decide, make sure your comparing apples to apples.

Not all estimates are actually estimates

There are estimates, bids, quotes and proposals. Some contractors use the generic term “estimate” to cover one or all of these, so make sure you know which they mean.

At its core, an estimate is a best guess as to what the labor and material costs will be to complete a job. This is not a fixed number, and in the end may be adjusted up or down to reflect the actual costs.

Estimating is more art then science, but a good estimate should be in the ballpark of the final bill.

Quotes and bids tend to be a set price. When comparing estimates, find out which are actually estimates and which are a fixed price for the work.

Not all estimates are created equal

Some estimates are highly detailed, outlying every phase and cost of the job down to the drywall screw. Others may be more general.

In an ideal world, each estimate would be identically detailed to help with comparison. If you’re faced with an estimate that is lacking detail, let the contractor know that you are seriously considering them but need a more detailed estimate to do a proper comparison.

Not all contractors are created equal

Contractors all have their own processes and preferences for materials. Some prefer the latest and greatest, while others rely on the tried and true.

Each contractor has a difference in the amount of labor involved, the materials needed and the quality of the products used. This is where having a detailed estimate is essential; when comparing estimates, make sure the material quality and the processes described are comparable. Otherwise, you’re really not looking at the same finished product and end up trying to compare the price of apples to bananas.

Not all prices are equal

So you have several identically detailed estimates. Why are the prices so different? Mostly likely this comes down to contingencies, overhead and mark-up.

The company that advertises on TV is going to have a higher overhead than the guy with just a sign on his truck. A part of the cost of the job is covering part of this overhead and is usually tacked on as a percentage spread across the estimate. Each company is different and each has a different overhead rate.

Likewise, each company needs to make a profit or they’ll go out of business. This is usually referred to as mark-up, and each company has their own rates for this as well.

Last but not least: Contingencies

While some estimates have a contingency line item, others fold this cost throughout the estimate, and others don’t add one at all. A contingency is a safety net for the estimate. Even after every precaution there is always something that pops up that wasn’t accounted for in the initial estimate. Whether it’s that pipe in the wall that has no business being there or needing to fix shoddy work done by the last guy, the contingency is there to absorb, up to a point, these unknown, unaccounted-for issues.

Comparing estimates can be a bit of a daunting task, especially when you’re not sure what you're really comparing. Take the time to ask questions and to be sure you really are comparing apples to apples.  

About this Experts Contributor: Bryan Jennings has been in the construction industry for 12 years. Bryan E. Jennings Contracting has served Pennsylvania since 2005. 

As of August 23, 2016, this service provider was highly rated on Angie's List. Ratings are subject to change based on consumer feedback, so check Angie's List for the most up-to-date reviews. The views expressed by this author do not necessarily reflect those of Angie's List. 

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