WHAT’S IN AN ESTIMATE?

Aug 20

A project budget should be developed alongside the design, growing in specificity over the course of the project. It’s important to remember that estimating construction costs is difficult for many reasons: no project is the same, costs change over time, and some contractors are more expensive than others. Also, at the early stages of a project, there is only a schematic understanding of the work without detailed specifics. Furthermore, there is a tendency to overlook rather than over-include items of work. For these reasons, the budget should start as a range that gradually focuses in on a target over the course of design.

Before drawings are in place, we often provide an estimate based on rough cost/sf figures. We then update that range according to the schematic options put forward in our initial meetings. After a schematic design is settled on, we typically initiate an early costing phase including one or more contractors. Because details are yet to be developed, contractors will estimate through a mix of cost/sf numbers, project comparisons, and other broad-analysis means. The result will be approximate but sufficient for identifying a reasonable target budget, allowing us to proceed with confidence regarding full development of the design. Moving forward in this way permits us to avoid any significant scope changes and redundant design costs later.

If a contractor is selected following Schematic Design, their estimate can be updated over the course of Design Development as details are decided, including the structural, HVAC, and electrical design, as well as high-dollar product allowance categories like windows and millwork. Alternatively, the project could be bid out near the end of Design Development, with there being sufficient detail for contractors to provide quotes and estimates in a more price-competitive format. Please read this post to understand the pros and cons to selecting a contractor earlier vs. later in the design process.

As the project nears construction and the budget has firmed up, we help our clients pick the final products, including tile, flooring, hardware, and plumbing fixtures. Sometimes the very last decisions—including decorative light fixtures, cabinet hardware, and countertops—are made during construction, once unexpected repair work can be identified and factored into the budget.

Below are construction costs divided into standard categories, though there is some fluidity between them. Included in the descriptions are the assumptions we usually make regarding quality, complexity, and cost, with some wiggle room to go up or down in each category. Every project and client is different, of course, and it takes the entirety of the design process to finalize selections and details for these categories. Therefore, clients should flag any desired upgrade as early as possible so that it gets included in the budget.

GENERAL CONSTRUCTION

GENERAL REQUIREMENTS & SITE SUPERVISION: General Requirements are the indirect costs required to run the project, including site protection, worker amenities (e.g., toilet), scaffolding, and clean-up. Site Supervision is the direct labour spent by the general contractor to coordinate work and deliveries on site.
SITE WORK & DEMOLITION: Demolition, excavation, waste disposal, shoring, backfill, etc.
CONCRETE & MASONRY: Including concrete block, poured concrete, and bricks. This typically includes steel rebar and lintels or anything else installed by this trade (for example, sometimes sub-slab insulation or waterproofing).
FRAMING: All the wood and metal framing (rough carpentry), as well as structural steel. Until a structural design is in place, a contractor will only be able to provide a rough estimate.
INTERIOR TRIM & DOORS: Interior trim and doors are usually picked from a local supplier’s catalog. Custom or very ornate profiles, more mouldings than are typical, as well as stained wood would constitute upgrades from basic assumptions.
STAIRS & RAILINGS: Costs can vary a lot depending on the design features. Unless flagged early, we typically start by assuming painted wood stringers, risers, and plain spindles, with stained wood treads, handrails, and modestly-detailed newel posts. Metal, stained wood, or more elaborate profiled pieces would add more cost. Sometimes it makes sense to price options and decide.
INSULATION & MOISTURE PROTECTION: Whatever is required to meet code at additions and new buildings, with a desire to favour less expensive, more environmentally-friendly materials when presented with options. At renovated spaces, we typically add what is practical without being overly costly or space-demanding. Where given the opportunity to upgrade a poorly insulated attic, we typically assume it is worth doing so.
CLADDING & EXTERIOR TRIM: Except where the building code requires non-combustible siding (for which we typically use aluminum or, less often, fibre-cement board), we usually start by assuming pre-finished wood siding with site-painted wood trim, eaves, and details.
ROOFING & RAINWATER GOODS: We typically assume architectural-grade asphalt shingles for sloping roofs and torch-down modified bitumen roofing for flat roofs. Metal, cedar, or other high-end roofing would constitute an upgrade. Eavestroughs and downspouts are usually figured to be in-stock profiles and colours.
WINDOWS & EXTERIOR DOORS (INSTALL ONLY): Based on quantity and size of units to be installed and fairly consistent among different product types.
DRYWALL: The materials used is very standard. The typical level of finish (known as “level IV”) has some visibility of joints when viewed from acute angles. To avoid this, the walls can be skim-coated, but this would be more expensive.
INTERIOR PAINTING: Their work may include some of the drywall finishing, and will also involve caulking the trim in addition to priming and—typically—two coats of paint. Some painters really are better than others, but it’s hard to put into words why, and some people don’t notice or mind the differences. So if level of paint finish is particularly important, it’s good to flag it early.
SHOWER ENCLOSURES: The glass doors and panels at showers and bath tubs—fairly standard pricing.
PLUMBING (ROUGH FIXTURE & FINISH INSTALL): Largely estimated based on the number of fixtures to be installed, plus any plans for sump pump or backwater valve. Unless flagged by the homeowner, an estimate would not assume upgrades like a recirculation pump to facilitate near immediate hot water at taps, or cast-iron pipes throughout.
HVAC: The system type and equipment upgrades should ideally be decided at a schematic level. More certainty on the cost is possible after an HVAC design is in place.
ELECTRICAL: Fairly standard based on typical devices. Stand-alone items like electrical service upgrade and panel replacement can usually be assessed by a contractor prior to electrical drawings.
APPLIANCE INSTALL: Fairly standard, though panel-ready appliances take more effort.
WALLPAPER INSTALL: Depends on the quantity and product used, and it’s difficult to estimate in the early stages since the extent is not decided until Design Development.
EXTERIOR IMPROVEMENTS: For budgeting purposes, it’s sometimes helpful to separate out items like decks, terraces, and porches, either to reflect their discretionary nature regarding details and materials, or the unknowns that can sometimes accompany restorative work. Things like patios, paving, and fences are sometimes better done as part of a separate landscaping project by a different landscape contractor. Every situation is different.

PRODUCT ALLOWANCES (TYPICALLY ARCHITECT ESTIMATED)

WINDOWS & PATIO DOORS: For windows and patio doors, we start by recommending Pella’s Lifestyle Line, with the probability of some muntin bars/grilles. There are other more, expensive aluminum-clad product lines that might be worth considering at the homeowner’s discretion.
FRONT DOOR: To allow for more customization, these are typically built by a local door manufacturer. Stained wood costs more than painted, and this decision is often made during construction based on quotes.
MILLWORK: Cabinets are often at the heart of an interior design, so we don’t encourage fretting about minor cost implications based on details and materials. If necessary to meet a particular budget, it’s typically more effective to eliminate areas of optional cabinetry.
COUNTER & SLABS: Those of a good quality—including marbles, granites, and engineered-quartz—start at a baseline, and we assume something mid-range. Some highly desirable products can be quite expensive.
DOOR HARDWARE: Our baseline assumption is Emtek, which is a good-quality, readily available manufacturer. Typically cost variation between model options is small enough not to influence choice. Going with higher-end manufacturers like Baldwin would have greater cost implications.
DECORATIVE HARDWARE: There are a lot of options based on hardware type and manufacture, so budgeting starts at a very general level.
TILE: Supply and installation costs can vary significantly depending on what is chosen and the complexity of the pattern to install. We start with a mid-range baseline.
WOOD FLOORING: We typically assume a straight-lay, pre-finished white oak floor. Stained-on-site, certain other species, and more complex patterns will cost more. Within this line item figure we usually include any site-staining needed to match stair treads to the new flooring.
MISC FLOORING: Projects often have other finishes to consider (especially at basements), including carpet, polished concrete, vinyl, and linoleum among others.
PLUMBING FIXTURES: We view Delta as a good starting point for a mid-range manufacturer with lots of options. Some clients may prefer to venture into higher-end brands like Rubinet, especially at ensuite bathrooms.
FIREPLACE UNIT & FLUE: While wood-burning fireplaces can be built by a mason, it’s more cost-effective to use a manufactured unit that is either inserted into an existing fireplace or built around with new construction. We typically assume a gas-fired unit with a modest amount of flue-work.

CONTRACTOR MARK-UP

In addition to any direct labour costs that a contractor may bill for, they will also charge to help cover their business’ operational costs: management, insurance, tools, marketing, etc. This can be accounted for in a number of ways. The most typical is a mark-up applied to all the project billed costs (ordinarily around 15–20%). Sometimes this amount is a stand-alone sum, or billed as “project management.” Rather than worrying about the details of how this is figured, we encourage homeowners to focus on the bottom line.

CONTINGENCY

It’s acknowledged that an estimate or quote will typically fail to anticipate all costs. For that reason, going into construction it’s wise to set aside an extra 10% or more on top of the expected construction costs to cover unforeseen work. For instance, demolition may reveal new problems and complexities. Typical examples include: beams that have been compromised, floors that are out of level, wiring that is not up to code, or asbestos. Inflation and other costs finalized during construction may also have an impact, and the contingency is meant as a reservoir to absorb these inevitabilities.

OWNER-SUPPLIED PURCHASES

In any project there may be work items that are easier to coordinate outside of the general contractor’s domain, even if the contractor ends up installing them or coordinating some of their work. Below are typical examples:

APPLIANCES: We start by providing an estimate for a suite of high-quality, mid-range products, from which our clients may ultimately deviate at their own discretion.
DECORATIVE LIGHT FIXTURES: Even more than appliances, light fixtures can run the gamut. We do our best to establish a reasonable budget.
CLOSET BUILD-OUTS: Closetry hidden within a walk-in-closet usually does not require the level of finish or customization offered by a local millwork shop, and it can make sense to employ the services of a closetry specialist, like California Closets. For typical closets that only require rods and adjustable shelving, the general contractor is usually the most cost effective source.
A/V (AUDIO/VISUAL) SYSTEMS: This is probably the most discretionary category, with some homeowners requiring none and others who seek sophisticated systems.
WALLPAPER: the inclusion of wallpaper is hard to predict at the schematic stages of a project, and pricing varies a lot. If homeowners are interested in wallpaper, they will typically research options themselves, though we are able to provide help.

Brian Hagood