There are several different types of home remodeling quotes used by contractors today: estimates, bids, price not to exceed, time plus materials, and hidden damage.
1. Estimates
Estimates offer an educated guess about the time and material costs required to finish your medium to large job. Generally, you will be provided with a low and a high number that range within 20% of each other. The benefit is that you pay only the actual cost and no extra mark up to cover eventualities. The drawback is that you are not aware of your exact cost in advance, but if you are comfortable with a price range then you can save money.
2. Bids
Bid is a contractor quotes for home improvement, labor and materials for your job. This will be the amount you will be charged. The plus point is that you know the exact cost up front. The disadvantage is that because contractor has to plan on unpredicted issues he is going to charge considerably higher than other methods.
3. Time Plus Materials (T+M)
You have to pay only for the actual time worked and materials purchased. Even if most companies do not allow it, local contractors will advise you on materials to buy and help you create a shopping list so you can buy your materials and does not need to pay contractors for shopping time or warranty markup on the materials you want.
Estimates offer an educated guess about the time and material costs required to finish your medium to large job. Generally, you will be provided with a low and a high number that range within 20% of each other. The benefit is that you pay only the actual cost and no extra mark up to cover eventualities. The drawback is that you are not aware of your exact cost in advance, but if you are comfortable with a price range then you can save money.
2. Bids
Bid is a contractor quotes for home improvement, labor and materials for your job. This will be the amount you will be charged. The plus point is that you know the exact cost up front. The disadvantage is that because contractor has to plan on unpredicted issues he is going to charge considerably higher than other methods.
3. Time Plus Materials (T+M)
You have to pay only for the actual time worked and materials purchased. Even if most companies do not allow it, local contractors will advise you on materials to buy and help you create a shopping list so you can buy your materials and does not need to pay contractors for shopping time or warranty markup on the materials you want.
The major benefit of this method is that it is the affordable (estimates are always calculated at a higher hourly rate) and fastest way to get many small to medium sized projects done. Moreover, it is easy to expand your to-do list without changing any contracts. The downside is that you do not have a price upfront, but rather an approximate timeframe.
4. Price Not to Exceed
This is like T+M but provides the homeowner with a price range that will not exceed a given quote. In general, the contractor will offer quotes for home improvement they are sure of, taking all unforeseen events into account. This approach will be slightly more expensive than T+M, but it is your second best choice to cut down your costs on small to medium sized projects.
5. Hidden Damage
Damage discovered that could not be seen before starting your project is not included. Reliable contractors will notify you of this and provide you a written change order with any additional costs as a result before proceeding.
4. Price Not to Exceed
This is like T+M but provides the homeowner with a price range that will not exceed a given quote. In general, the contractor will offer quotes for home improvement they are sure of, taking all unforeseen events into account. This approach will be slightly more expensive than T+M, but it is your second best choice to cut down your costs on small to medium sized projects.
5. Hidden Damage
Damage discovered that could not be seen before starting your project is not included. Reliable contractors will notify you of this and provide you a written change order with any additional costs as a result before proceeding.
Depending upon the scope of your project, local contractors can work with you in any of these ways, and they’ve found it's best for you to choose T+M for small projects, and the Price Not to Exceed choice for larger projects.
