WHAT IS THE DIFFERENCE BETWEEN AN ESTIMATE, A BID AND A CONTRACT?

////WHAT IS THE DIFFERENCE BETWEEN AN ESTIMATE, A BID AND A CONTRACT?

WHAT IS THE DIFFERENCE BETWEEN AN ESTIMATE, A BID AND A CONTRACT?

2018-08-27T04:30:03+00:00 August 27th, 2018|

You have some great remodeling ideas for your home and can’t wait to sit down with your remodeling contractor and discuss options. There are however certain remodeling guidelines that it pays to follow and certain key information that will make your life easier. Download our 3 STEPS TO A HAPPY REMODELING EXPERIENCE. The steps cover questions to ask yourself before you start a remodel, questions to ask a potential remodeling contractor, and essentials to include in your contract. Before you get to the contract stage, you will very likely have an estimate or quote and a bid document.

ESTIMATE

An estimate is an approximation of how much it will cost to complete a project. For an estimate to have any value, a contractor will need as much detail about your renovation as possible, with a clear idea of your expectations and timeline.

He will go to his suppliers and get quotes for the raw materials.  He will then add in labor and equipment costs, other overheads plus his markup and give you an approximate total.  You should request that an estimate is put in writing. Estimates are usually free to the homeowner, but cost the contractor time and money to prepare.

An estimate should cover:

  • the work to be done
  • the materials needed
  • the labor required
  • the time it will take

BID

Once you have evaluated the estimates, you can invite a contractor to bid on the job.  A bid is a much more detailed document than an estimate and is based on actual plans and specifications, specific materials selected and actual start and finish dates. This is usually the document that will become your contract if you choose to go ahead.

CONTRACT

A contract is a legally binding agreement between you and the contractor that promises an action. Your bid document will usually become your contract once it is signed.  It should spell out the full scope of the project. This is the time to nitpick and scrutinize the document and ask questions about anything you are unsure of. It is so much easier to resolve issues if they are agreed in writing up front. Don’t be afraid to add to the contract. Don’t rely on the contractor to include everything but do ask him if he thinks anything else should be included to ensure that the job can be successfully completed.