Estimating Your Home Remodeling Project!
The amount of money invested in the construction project for products. This cost is separate from the cost of labor to produce the project. The material cost together with the cost of labor helps determine the total cost of a project and its eventual contract price. For example, lumber, flooring, electrical wire, kitchen cabinets are all part of material costs. These costs are all figured to the best of the estimator's ability along with waste and disposal. Materials are always marked up by the contractor.
The amount of money invested in the construction project for installation. This cost is separate from the cost of material to produce the project. The labor cost together with the cost of material helps determine the total cost of a project and its eventual contract price. For example, installation of kitchen cabinets, flooring and electrical wiring are all labor costs. These costs are all figured to the best of the estimator's ability along with a labor rate and markup.
Time and materials (T&M) is a standard phrase and project payment system in a contract for construction. When using this payment method, the owner agrees to pay the contractor based upon the time spent by the contractor's employees and subcontractors' employees to perform the work, and for materials used in the construction project (plus the contractor's negotiated mark up). No matter how much work is required to complete construction. Time and Materials (T&M) is generally used in projects when it is not possible to accurately estimate the scope of work required, when it is expected that the project requirements are likely to change or when there is sufficient trust between both parties.
This is opposed to a fixed-price contract in which the owner agrees to pay the contractor a lump sum for completion of the contract no matter what the contractors pay their employees, sub-contractors and suppliers.
Many time and materials contracts also carry a guaranteed maximum price, which puts a limit on what the contractor may charge, but also may allow the owner to pay a lesser amount if the job is completed ahead of schedule.
Unit prices can and should be used to determine your projects cost. It will help you understand and maintain some control. Unit pricing is th(ie dollars) square foot, cubic linear foot, ton or man hour.
Example: Unit pricing given to you can also be used for unforeseen conditions such as if the sheathing under your roofing shingle is rotten. We won’t be able to determine the exact amount until it’s exposed, so we give you a square foot unit price allowance to replace sheathing.
Allowance: the amount of something that is permitted, especially within a set of specifications or for a specified purpose. Allowances usually are given in units. Allowances can also be used when negotiating your remodeling contract with your contractor, especially if you are uncertain of what exactly you want done or want to purchase. You can pick out finishes such as flooring, appliances or cabinets at a later date and know what you are “allowed” to spend if you are to stay on budget. The difference between the amount "allowed" and what you spend on your allowance will be either added or subtracted from the original contract.
Adding a Contingency:
Contingency: a future event or circumstance that is possible but cannot be predicted with certainty. Creating a contingency fund is a good idea especially for remodels and repairs that you feel will be unpredictable. This will be given to you in a project percentage basis. The contingency is there again for anything that may be unforeseen or unexpected which in remodeling or repair is often the case. Think of it this way; a contingency is a sum of money that you are willing to spend on your project but you would be delighted if you didn’t have to.