Why Do Remodeling Contractors Charge Different Amounts?

Unfortunately, it is very difficult to compare pricing when looking at a proposal from a home remodeling contractor. Regardless of whom you hire, we recommend against design-build for large projects and instead recommend simultaneously involving a design professional and a builder. This way there is a detailed set of specifications to bid to ensure you’re getting a quality remodeling project for a fair price.

Construction Overhead

Home building is one of the oldest professions, and is very competitive. Margins are not as high as manufacturing or other businesses. There are “chuck in a truck” contractors with very little overhead, but the odds of a successful, quality, professionally run project are not in your favor. In order to avoid a headache, we always recommend a professional remodeling contractor.

Hiring a professional contractor does not mean you should be paying for unnecessary extras. Avoid companies that have commissioned salespeople, selections coordinators, or who offer design-build on large projects. These “services” can add more than 10 percent to the cost of your remodeling project. A professional remodeling contractor has the following:

• A dedicated website with information about their company and professional pictures of their work.
• Online, verifiable reviews on multiple platforms that read as authentic and not paid for or written overseas.
• Full insurance including workman’s compensation for their employees and all subcontractors have workman’s compensation for their employees as well.
• An office with a physical address that you can visit and where your personal information is safe.
• Professional project management software that provides you with a schedule and a dedicated way to communicate with your project manager.
• Trucks and vans with professional graphics that are permanently attached (no magnets).
• A typed contract with a start and end date.
• Company uniforms the present a clean appearance. The way they maintain their equipment is the way they will maintain your home.
• Accountability and follow-up. If someone does not get back to you, does not show up on time for an estimate without calling, or if you have to chase a contractor for a bid…walk away, because it is only going to get worse once you hire them.

Remodeling Quality

There are thousands of ways a contractor can rip you off. Hiring a professional with references can help you avoid this. Additionally, a written agreement regarding the materials used and the timeline for their installation that is as detailed as possible is key to success. It might seem like senseless construction jargon, but a longer, more detailed contract shows that the builder cares, and specifies exactly what you are paying for on your remodeling project.

A contractor could write “supply and install a door” in the contract. You might have talked about the door, but if there is no plan that the proposal references, we would recommend you see details like “supply and install one solid core flush door (36”x80”) to be painted with Sherwin Williams Pro Classics in Dover White semi-gloss. Hinges are to be 3.5” in black with a Kwikset 91550-029 Halifax Door Handle,”. To avoid needing this amount of specificity, you can also have an architect or interior designer draw a plan with an interior finish schedule to define the materials used.

With details you can make sure you are comparing apples to apples. A trick often used by unscrupulous contractors is to give you allowances for materials selected that is out of line with the quality of your home and your expectations. When you compare your bid to a competitor, it could be thousands of dollars less, which seems like a value. However, when you add back in the material quality expected, the price may change significantly.

Home Building Experience

Experience costs money. The longer a craftsman has practiced their trade, the more they usually charge. Make sure your project has a dedicated project manager with at least a decade of experience in residential construction. Residential remodeling is the most difficult of the building trades and requires significantly more experience than new construction of the same price point.

Is someone just starting their own company? Even if they have been in the building trades for years, running a business and cash flow management are skills not taught in the trades. Make sure your down payment is safe and that the company managing your project is professional and organized.

Home Warranty

It is standard practice for a builder to provide you with a limited warranty, on top of the warranty provided by subcontractors and material manufactures. Unfortunately, if the company is neither reputable, nor financially sound, the warranty is not worth the paper it is written on.

Remodeling projects never go perfectly, and a company defines itself by how they handle those problems. Making sure to read as many reviews of a company as possible, and making sure you have read the contract completely is essential to remodeling success.

Construction Contract

A detailed contract protects both the remodeling contractor and the homeowner. Make sure to read and understand the building contract.

• Ask the builder questions in writing.
• Make sure all of the materials are specified if they are not on the plan.
• Get assurances on the start and completion dates for your project in writing.
• Understand the price of change orders and make sure there is a fixed charge for any additional work. This way you are not stuck paying outrageous change orders if there is a surprise behind the wall.
• Understand the draw schedule. No professional building contractor should ever ask you for complete payment up front or offer a discount for an aggressive payment schedule. This is always a red flag.
• The contract clearly states how to mediate disagreements.

Finding the Right Home Remodeling Contractor

Remodeling can be stressful, but hiring a professional should alleviate as much stress as possible. Home building is a low margin, competitive business, so examine a bid that is significantly lower. Generally, the low bid forgot something, omitted something, or unfortunately has plans to make up the difference through change orders. By doing research, asking friends, employing a third party designer, and having a firm written contract, you can be sure you have the best chance of success with your next home remodeling project.