A homeowner posted a comment recently on ServiceMagic’s forum. He said he’d been told by many people to add $3 to $5 K to a substantial job just to cover the extras that seem to come up. He was under the impression that this is normal in contracting.
It isn’t normal, or at least it shouldn’t be. There are two reasons that extras come up. Neither one is a good reason.
The first is a contractor who underprices a job to make the sale. When you are dealing with a homeowner who’s only focus is getting the lowest price, it’s tempting to come up with the lowest price by leaving out things you know they will want, or will probably want, and adding them back later as extras. I blame this one on the homeowner as much as the contractor – it takes two to play this game.
The other reason extras come up is when an estimator doesn’t do their job completely. As an estimator, you have the responsibility to take the job apart mentally so you know exactly what is going on. If you can’t see what is under the slab, up in the attic, under the house or behind the wall, get a Demolition and Discovery agreement (included in our Profitable Sales book) signed by the owner and then “demolish and discover” until you do know the whole story. Then you complete your estimate. That is taking the responsibility for the job and building a good, accurate estimate.
If the folks won’t do a D & D agreement, that’s a red flag that your potential customer might expect you to take money out of your pocket to do their job.
General contractors, if you find you are being hit with “extras” from your subs, then look to the estimator for an explanation. In almost all cases, the extra should have been included in the request for quote given to the sub, and it should have been included in the sub’s original quote while they were compiling the estimate for the job. There should be a clear understanding up front between general contractors and sub contractors (or specialty contractors) that there will not be extras unless the owner makes a change. If the sub suggests a change and the owner and general contractor sign off on it, okay. If there is no written authorization for an extra, then it should not even be considered.
If you don’t know how to estimate, learn how. We have a 12-hour course on estimating available for you to watch and learn at your convenience, at your speed.
I have said many times before, surprises aren’t. There are exceptions but they are few and far between.