Blog - Providing Insight into Residential Architecture and Construction

Get Informed: Construction Cost Estimate

Construction Cost Estimate For small addition or interior renovation projects, an Architect’s services may include a detailed construction cost estimate. Deriving an itemized construction breakdown is a meticulous undertaking, but the information is a huge advantage for the client to have and use at their discretion.

Although a client has allocated a budget at the start of the project – which the architect will use to guide their design - for most projects, a client will become aware of the true total construction cost after the competitive bidding is underway.

For projects around or less than $100K, many contractors will “underbid” the project hoping that their low number will attract the client. And, unfortunately, the contractors are correct. While awarding to the lowest bidder is not always a bad idea, be sure that even the lowest bid is within 10% of the next bidder. If there is a difference of 25%+ between the bidders, that should raise some red flags.

So often we come across the same problems when the project is awarded to a very low bidder. Because the contractor under priced the project by such a large margin, s/he quickly begins losing money. There is usually an attempt made to charge extra for “hidden conditions” after demolition, or for other “additional” services. These hidden or additional charges keep upping the project’s price – and might eventually bring the total project cost above the second bidder’s…. or far surpass it.

Since you will be interacting with the contractor for the duration of your project, it is important to do your background research. For reference, check out our article on questions you should ask a contractor’s referrals, so you know the right questions to be asking.

To safeguard your interests, consider having your Architect include an itemized construction cost breakdown in his/her project scope of work. A detailed look into a project’s average cost of labor and materials can prepare you for negotiations with contractors, weed out the extreme under-bidders, as well as the extreme over-bidders.

Architect’s construction cost estimates will be based on information provided by large institutions that specialize in collecting detailed construction cost data. This data represents the national average cost for labor, material as well as the time needed to perform a certain task. The data is adjusted per region and will include, overhead, profit for the contractor, sales taxes and handling costs for materials, permit fees, clean up, etc.

Having access to this kind of detailed information will make you that much more financially prepared and will keep you in control of the project. .

Please feel free to add thoughts in the comment section below!