INADEQUATE ALLOWANCES

Posted on Posted in Home Remodeling Costs
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To keep their bids attractive, many contractors put in unrealistically low allowances. Let’s say your contract contains a $5,000 allowance for kitchen cabinets, but you end up choosing cabinets that cost $8,000.  You now owe $3,000 extra, plus taxes, and even more if the contractor charges markup on allowance upcharges. He may even charge extra to install the more expensive cabinets.

My advice: Find out beforehand how the contractor prices allowances – and start out with realistic allowances for the quality level you want. The best solution, when feasible, is to pick materials early so the estimate reflects actual costs. In a competitive bidding situation, some contractors will purposely put in low allowances to keep their overall bid low. Read more about allowances. Buildingadvisor.com