(This is page 2 of a 2 part article. To go to page 1, please click here.)
For larger projects such as the construction of a complete home, it is advisable to have a construction plan drawn by an architectural firm before submitting the project for bid. This ensures the highest level of accuracy and that you are comparing apples to apples when determining the best prices given by various contractors and subcontractors.
These estimates are usually quite detailed and involve dozens of separate line items. Many contractors will show the actual costs of the materials and then add an additional amount for their labor. For this reason, these estimates will often be called a “time and materials plus cost estimate.”
A time and materials estimate takes a significant amount of time to prepare and most contractors will only provide once they are hired for the project. More commonly, a contractor will provide a bid on a project based on their experience with similar ones. This price is binding to both the contractor and the homeowner. If a job runs over, the contractor makes less but if he can finish more quickly than anticipated, he earns more.
A bid will typically show the total cost as well as the time frame allotted for the job. The price already includes the contractors markup. In addition, many bids will delineate the costs but in a very general manner under such categories as framing, electrical, finishes, etc. A bid may also include “allowances” for any finishes or other items that have not been already chosen by the homeowner.
Before signing, the homeowner should carefully scrutinize a bid to ensure that all aspects of the job including types of finishes, brands of appliances and other details are what they expect. Change orders can be a very aggravating – and expensive! – experience for the uninitiated.
A Final Note
As you can see, the estimating and bidding process can be simple or complicated depending on how detailed and accurate the homeowner requires. In addition, all contractors do not all follow the same guidelines and procedures when preparing an estimate. Still, knowing the lingo – so to speak – of the process provides the homeowner a better understanding of what he will be paying for and which contractor is giving him the best value for his money.
For more specific information on construction project costs in Maui or if you are interested in an estimate, please contact us at Takitani Construction. We can be found online at www.takitaniconstruction.com or reached directly at (808) 244-3910.