If you’re ready to shake of those winter cobwebs, and tackle a home renovation project this spring – large or small – then you’ll need to do your homework, compile your wish and needs list and have a comprehensive plan, in order to gather various bids from at least three different contractors.

It’s important to get these written bids as detailed as possible, documenting the overall scope of your project along with each detail and all proposed materials.

Now depending on the scope of your particular home renovation project there are various types of bids relative to the size of your job.

Typically there are three types of bids you could negotiate with your potential contractor.

1.  The Fixed Cost Bid

The contractor provides a solid bid based on your submitted documentation. This seems to be the ideal situation as it sets a complete price for the overall project and you know exactly where you stand up front.

Is best when:

• You have comprehensive plans and documents prepared.
• The scope of your project is very clearly defined.

2.  The Cost Plus Bid

The contractor charges you for his labor, materials, and equipment costs, plus his standard profit and overhead mark up. This option works well for some, but the downside is you really have no concrete idea of how much the project will cost before you start.

Is best when:

• You’re not yet committed to firm plans, and you’re still unsure of the overall scope of your project.
• You’re anxious to begin construction before your plans are nailed down.

3.  Time + Materials Bid

The independent contractor is paid his hourly rate plus the cost of materials. This isn’t the type of arrangement you want for a large scaled projects, as it would prove way too costly!

Is best when:

• It’s a smaller job, perhaps a repair or installation, where only one tradesperson in required.

Which one suits your project best?

I encourage you leave questions or comments below this post, and fill out the form on the right hand side of this page to receive your free copy of my special report: “How to Avoid the 15 Most Common Decorating Mistakes”

Article by Lori Gilder, Architectural Interior Designer, Los Angeles, Ca. © 2010 Lori Gilder. Interior Makeovers Inc.

Spring is here and it’s time to tackle some of those home improvement projects you’ve been putting off over the past few years.  Whether it’s updating your kitchen, adding that outdoor living space or finishing your attic, you must find trustworthy and competitive bids from reputable contractors.

This can be one of the more confusing and stressful stages of the home renovation process. Everyone seems to attach different meanings here so….

What’s an estimate? What’s a bid? What’s a proposal? What’s a contract?

What’s the difference?
An estimate is an approximation or rough calculation based on a very general description of a project. This is only an estimate or guess, given at the preliminary stages of a project when plans aren’t yet finalized and ideas are still being tossed around.

A bid is an actual cost and commitment based on a more specific description of work to be done. It’s an accurate accounting of costs since it’s typically based on, and budgeted from, a full comprehensive set of plans, specifications, and details of the overall scope of the project.

A proposal outlines all the terms and conditions that will be included in the final agreement between all parties with all the stipulated costs outlined and documented in the bid itself.

A contract is the binding legal agreement between you and the contractor to do specific work itemized in the bid, for specific compensation – and must be signed by all parties.

It really helps to know what types of bids there are and which ones are best suited to your project.

I encourage you leave questions or comments below this post, and fill out the form on the right hand side of this page to receive your free copy of my special report: “How to Avoid the 15 Most Common Decorating Mistakes”

Article by Lori Gilder, Architectural Interior Designer, Los Angeles, Ca. © 2010 Lori Gilder. Interior Makeovers Inc.