How to Get Accurate Home Remodel Estimates

The Problem with Vague Bids

If you call three different contractors and say, "I want to remodel my kitchen," you will receive three radically different estimates—perhaps $15,000, $35,000, and $70,000. Why? Because without specific details, contractors are forced to guess what materials you want. The $15,000 guy assumes you want cheap laminate counters; the $70,000 guy assumes you want a built-in sub-zero fridge and exotic marble.

Step 1: Write a Scope of Work (SOW)

Before any contractor steps foot in your house, you must define the Scope of Work. This is a written document that lists exactly what you want done. If everything is written down, every contractor is bidding on the exact same project.

• Bad SOW: "Install new tile floor."
• Good SOW: "Remove and dispose of existing linoleum. Install HardieBacker cement board. Install homeowner-supplied 12x24 porcelain tile in a 1/3 offset pattern with charcoal sanded grout."

Step 2: Define "Homeowner Supplied" vs "Contractor Supplied"

Contractors mark up the price of materials by 10% to 20% to cover the time it takes to drive to the supply house, buy the items, and transport them. If you want to save money, tell the contractors in your SOW that you will buy all the "Finish Materials" (faucets, light fixtures, doorknobs, tile, appliances). The contractor will only supply the "Rough Materials" (drywall, 2x4s, electrical wire, PVC pipes).

Step 3: Collect 3 to 5 Bids (Never Just 1)

Never hire the first contractor you talk to, even if you like them. You need to establish the local market baseline. Usually, you will get one extremely high bid (the "I don't really want this job" bid), one extremely low bid (the "I will cut corners" bid), and a few bids clustered in the middle. The middle bids reflect the true market rate.

Step 4: Check for "Allowances" in the Bid

If a contractor writes an estimate before you have chosen your specific materials, they will use an "Allowance." For example, the contract might say: "Tile Allowance: $2,000." This means they factored in $2,000 for tile. If you go to the store and pick a luxury marble that costs $5,000, you have to pay the $3,000 difference out of pocket. Always make sure the allowances in a bid align with realistic prices for the quality you want.