An estimate tells you more than the bottom line — about your contractor's character, his depth of knowledge, and the way he's thinking about your job in particular.
If a contractor you don't know that well gives a verbal estimate, he may not be that interested in the work. He may be competent, he may even be a good businessman, but he's likely not committed.
Or maybe he just doesn't want the job, which could be a big problem for you. There may be good reasons for that: he's too busy, your job's a pain in the neck, he has scheduling concerns, or maybe he just doesn't like you. So he'll push up the price to a point that, if you accept the bid, he'll be crazy to turn it down. So you'll have a less-than-enthusiastic contractor and you'll be paying top price.
A verbal quote doesn't mean anything anyway because, when you ask the inevitable questions like, "Is this included?" or "Are you going to replace the sink?" the details will become so complicated as the price goes up and down, you'll still need something in writing so you know what you are buying.
Related Articles
Don't wind up tossing ideas and numbers back and forth. Just say, "Thanks, and can I now get that in writing, please?" The contractor might press you at this point with questions like, "If you go ahead, when would we start?" or "How likely are you to actually hire me?" He's worried that you are a tire kicker, and he needs some sense that you are serious. These are fair questions and he deserves to know you are not wasting his time, but you still need to get things in writing.
A written estimate is not a contract, but it should be close to the latter in the level of pricing detail it provides. There should be a set price for everything that can be fixed, and everything else — such as exclusions or allowances — need to be clearly separated from the rest of the bid.
Sometimes a solid price just can't be established until work begins. Excavation is an example. If there are questions about the soil conditions or if there is an environmental issue, it may need to be separate from the bid. Fair enough, but you should still be told in the estimate how it will be eventually brought into the bid when the cost is known. If there are a lot of exceptions, however, it can mean the contractor just doesn't know enough about the work he's being asked to do.
A sign of someone with too little experience is an obsession with detail at the estimate stage. Good estimating is a matter of "feel," and someone with no experience usually lacks that. He thinks nitpicking and drilling down to each little step and detail will make him look like he knows what he is talking about. That's not an experienced contractor.
Sure it matters whether the siding is blue or pink when it comes time to install it, but not at the estimate stage (unless it's a more expensive custom colour). A contractor with a "feel" for the work will have solid numbers that can allow for small variations and changes.
There should be a proposed start and completion date, or at least a timeline that indicates how long the work will take once begun, and a promise of more detail to follow. Is it too much to ask? If the contractor has done an accurate estimate, he already knows how long it will take. He can put it in the estimate.
Pay attention to how the contractor presents his price. Does it feel like a sales pitch? If he waits till the very last minute to give it to you, having filled the first 30 to 45 minutes with details of his company's expertise, quality work and reputation, he's probably a salesman, and might not be the guy who will actually do the work. When I get a full-on pitch like that, I ask if I can meet the guy who is going to be doing my project because his experience is a lot more important to me.
If a pitch like that is followed by the appearance of a contract and pressure to sign then and there, the guy has had serious sales training. I won't sign anything in the same meeting that I receive a quote, and you shouldn't either. It tells me the guy is just too motivated by money, and not motivated enough by delivering quality.
Another thing to look for is how he breaks down the pricing. Most fixed-price contracts will either give you a single number, or a single number with a breakdown. In some cases, the breakdown will include an "overhead and profit" line as well.
A breakdown should be included; if you get a single number, there's likely a large profit margin hidden in there — no matter how good the guy sounds.
The first estimate is when I also want to see all the paperwork proving that worker's compensation, general liability insurance and appropriate licenses are in place and paid up.
Finally, any estimate should include a payment schedule. Here's my hard-and-fast, no-exception rules for payment schedules. It does not matter whether the price is $1,000 or $1,000,000.
- Upon signing, no more than $1,000 to $1,500 down. You are only scheduling a start date here.
- 10 per cent on the start date, when workers arrive on site with their tools.
- 10 to 15 per cent in stages as certain aspects — such as framing, rough-ins for plumbing and electrical, drywall and painting — are completed, not started.
- Any big items, such as kitchen cabinets, and custom doors and windows have to be paid for upon ordering. Make a request that you pay the amount direct to the manufacturer/supplier, rather than go through your contractor.
- Make sure you have 10 to 15 per cent of the price held back for 45 days after the job is totally completed. At the end of that time period, if everything is good, pay your contractor.
Mike Holmes is the host of Holmes on Homes on HGTV. E-mail Mike at mikeholmes@holmesonhomes.com or go to www.holmesonhomes.com
