Contractors Cost Estimates for Real Estate

Contractors cost estimates for real estate can be intense at times and time consuming. However, creating an estimate is the first step for all projects you’ll undertake. A contractors job is to be efficient and effective. Inaccurate estimates may not be helpful to your business in many ways such as elasticity. Overstating costs can lead to loss of customers, while lowballing expenses will lead to you spending out of pocket to complete the project. Creating estimates is a tedious yet important process, and this article below is geared more for self employed real estate contractors, and might provide you with the steps to get your calculations for estimates.

Understand the Full Picture

It’s common for clients to call in, share a few details about the topic and request an estimate. Banking on experience, you can provide them a ballpark figure, however, there is a risk of over or understating costs as you do not have the full picture. Another approach is to set up a time to meet the client on their property and thoroughly inspect the scope of the project. Meaning for negotiation, make sure to be prudent as you do your due diligence.

For instance, a client may call you to repair a partially damaged roof, but, on inspection, the damage could be worse than expected, and a complete replacement might be a more ideal choice. The size, cost, and difficulty of both these projects are completely different and not something which could be ascertained through a phone or virtually.

An inspection allows you to quote accurate figures and plan for future manpower requirements.

Utilize Home Builder Software

Depending on the type of services you provide, various tools on the market might be able to help you streamline the estimation and accounting process. When you make use of home builder software, you should be able to create estimates, make change orders, and use 3D modeling to help you and your customers visualize the project.

Roof Estimating Software

Using roof estimating software is an option to create various estimating roofing costs, as it should streamline the process. For instance, you should be able to upload the plan onto the software, post it, with the goal of it then providing you with an estimate of the project. The estimate should be able to be refined by using the local cost library to add materials and labor requirements. In addition, the invoice should be created to share with clients for approval.

Construction Accounting Software

Using accounting software for your construction company will make it simple to manage all business-related requirements such as bookkeeping, invoicing, and tax reporting, providing you with a clear picture of current finances. Additionally, when bidding for multiple projects, you can customize existing templates based on requirements and share them promptly with clients.

Account for Uncertainties

Before sharing the estimate with clients, ensure that it reflects the correct prevailing prices in the market. For instance, for the project requirements example is for external labor, consult with the company regarding their rates to ensure they haven’t changed.

Additionally, at times supply chain disruptions can cause the prices of commodities to fluctuate more than ever before. Suppliers are the best resource to verify and be aware of any expected fluctuations in the near future.

Prepare to Negotiate

When it comes to agreeing on contracts, meaning negotiations are common practice in business. After you’ve shared an estimate with a client, they can revert with questions or a counter offer. Clients would likely have received bids from other contractors as well, but that doesn’t mean you need to lower prices to try and undercut the competition. Negotiations simply mean the client is protecting their best interests and does not want to be overcharged, especially if you’re a new contractor. You should try to provide value to the customer, pay attention to detail and be prudent. Sales are 80% communication and only 20% sales.

Hence, your method could be to prepare and enrich by creating alternative estimates which can vary based on project duration, materials used, or the scope of the project. Discussing these with clients will help find common ground. Create a fresh estimate post-discussion which includes terms and conditions agreed upon verbally.

When creating estimates, learn what due diligence in real estate is, as you have a duty to your clients. An accurate estimate can set the tone for the whole project, as it will avoid delays, have provisions for uncertainties, and, above all else, help ensure the project adheres to timelines and meets your client expectations.