Contractor Pricing?
Finally getting around to helping my parents renovate a rental in their 2 family. We’re looking to have one contractor do all the work (mostly cosmetic and cabinetry). How can I expect price quotes to be organized? Should I expect to get a flat all in quote, or a cost plus mark up? At work,…
Finally getting around to helping my parents renovate a rental in their 2 family. We’re looking to have one contractor do all the work (mostly cosmetic and cabinetry). How can I expect price quotes to be organized? Should I expect to get a flat all in quote, or a cost plus mark up?
At work, I can negotiate GC contracts for millions of bucks, but no idea what to expect for this job. My preference would be for costs plus a fixed fee but don’t know if that works in the residential contracting industry.
Many thanks in advance for your advice.
The more you can define the work that you want to have done, the more specific the pricing will be. But even if you are not sure about exactly what you want to have done make sure that the contractor you choose provides specific scope of work.
Also make sure you know what their hrly rates are in case there is unexpected additional work. An old dirty trick is to low ball the job, and then to go in for the kill with extras Because you cant realisticly bid out the extras once your house is torn up
Every contractor has a unique way of presenting a bid, from a lump sum to what is called a schedule of values or a comprehensive breakdown (rare). A typical markup is 10% profit and another 5% for general conditions.
I prefer to keep labor and materials separated in the estimate, provide a breakdown of overall hours and explain how I charge. Steer clear of renovators who can’t provide this information in some way as it tends to indicate poor business skills. If they can’t justify their numbers, they are probably just guesstimating. Many renovators have cashflow issues because of this…
…but so does New York State.
Good luck.
Just tell them what want the ones that don’t bother to provide the cost breakdown as requested just throw out. Be specific so you can compair the bids.
Jock deBoer, AIA
deBoer Architects