If you’ve ever had work done by a home improvement contractor, you may have gotten a free estimate, or you may have been charged a diagnostic fee. Sometimes it’s hard to know the difference and what you should expect from your contractor. Here is some insight from our home improvement company:
Free Estimate vs. Diagnosis
If you’d like to know how much a project will cost, most companies will give you a free estimate so that you know how much to expect to pay. If you have a problem and want to get to the source of it, however, most companies will charge a fee for a diagnosis. This is because they have to take the time to correctly identify what’s wrong before they can fix it.
For example: If you want to know how much a gutter repair will be, you can usually get a no-cost estimate. If you’re not sure why your gutters are leaking, however, you’ll probably have to pay an expert for a diagnosis.
Also keep in mind, if you need to submit something to an insurance company there might be a fee to prepare the paperwork.
Mark-ups vs. Profits
If you’ve never been a contractor before, you may have fallen under the assumption that “mark-ups” and “profits” are the same thing. In reality, they’re not. If a company has a 1.5 mark-up, it means that a $10,000 project will actually be quoted at $15,000 ($10,000 x 1.5). However, while many people think that extra $5,000 is a profit, it actually goes toward overhead expenses. This includes salary, job supervision, insurance, legal fees, taxes, licenses, and other necessary expenses the company needs to pay. A company will charge a mark-up simply so that they can perform the work under the right conditions.
Many fees are based on the actual size of the job. If you need to repair one of your windows, a contractor might give you a free estimate and then perform the work for a certain price. If you need new windows, however, a contractor might charge you a fee for measurements and assessments, then perform the work for a certain price. A simple rule of thumb is the more complicated the job, the more costly it will be.
Like any other homeowner, you’ve probably contacted several different companies to get estimates for your home improvement project. This is always a good idea. In addition to simply getting an estimate, you should also ask questions like:
- What does the estimate include?
- How long will the job take?
- Can the company provide the right licenses?
- What are the payment terms?
- Who’s responsible for each part of the project?
Don’t be afraid to ask questions. It’s your home and any contractor should know that it’s important to you. Contact us today – we’d be happy to help clarify anything you’re unsure about.