3 red flags to look for in a remodeling estimate before you sign
Before you sign a big remodeling contract, check three things: permits, cleanup and how change orders work. Eric explains what a good estimate should say about each.
Read what Eric says Transcript
Clients, before signing that $100,000 contract, you should really look for these three big things, especially this last one.
The first one is permits. If the project obviously needs them and they're not mentioned in the estimate, that's a problem.
Number two is no mention of cleanup or dumpster removal. You don't want to be at the end of the project and you get hit with this $3,000 dumpster bill that should be included in the estimate under either general conditions or under demolition.
And the last one is huge. It's how contractors and clients deal with change orders. The estimate or contract should explain how a change order works, how they are approved, how they affect the price, and the schedule. You don't want to figure this out halfway through the project.
A good estimate should make it very clear what's included, what is not included, and ultimately, what could affect the final price.
Before you sign a remodeling contract, especially a big one, read the estimate for what's missing as much as for what's there. These are the three things Eric tells clients to look for.
1. Permits
If the project obviously needs permits and they're not mentioned in the estimate, that's a problem. Plumbing, electrical and structural work generally need one. An estimate that leaves the permit out can look cheaper than it is, and unpermitted work can come back to bite you when you sell.
2. Cleanup and dumpster removal
You don't want to reach the end of the project and get hit with a dumpster bill. Eric's example is $3,000. Cleanup and debris removal should be in the estimate from the start, under general conditions or under demolition.
3. How change orders work
This is the big one. The estimate or contract should explain how a change order works: how changes are approved, and how they affect the price and the schedule. You don't want to figure that out halfway through the project.
What a good estimate makes clear
A good estimate makes it very clear what's included, what's not included and what could affect the final price. If you can't answer those three from the paperwork, ask before you sign. It also pays to check the contractor's license and to understand why some line items cost what they do.
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Questions people also ask
Should permits be included in a remodeling estimate?
Yes, if the project needs them. An estimate that leaves out obviously required permits is a red flag.
Who pays for the dumpster on a remodel?
It should be included in the estimate, under general conditions or demolition, so it isn't a surprise bill at the end.
What should a contract say about change orders?
How a change is approved and how it affects the price and the schedule, in writing, before the project starts.