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19 November, 2020

Questions to Ask When Reviewing Your Renovation Estimate

What’s Included In My Estimate?

Our second installment of the “Top 3 Tips To Stay In Budget” helps homeowners stay on budget for their renovation project.  In our first article “Don’t start until fully designed“ we shared the steps that will help narrow down choices to define the scope of your home renovation project.

Today we’ll dive into evaluating your construction estimate and our second tip that addresses your risk areas, and how to set a contingency so that you know what is included in your estimate, and more importantly – what isn’t.

It may be assumed that the renovation budget or estimate number you get from a contractor takes care of every detail of your home renovation project – and maybe it does, but that is not always the case. The only “standard” in construction quoting is the quoting for the work itself, ancillary costs are often not included, and that’s okay so long as it’s communicated.

Questions to ask as you review your renovation estimate:

      1. The first and easiest one: Does this number include GST?
      2. Hard costs: does this include appliances? Light and plumbing fixtures? A common grey area is blinds – are they furnishings or fixtures?
      3. Soft costs: Does this number include permits? Engineering? Design costs? How many visits from the engineer are included.

Have the contractor help you make a budget for what is not included. Get an idea of what sort of soft costs may come up. For example, more insulation is required than originally planned for, or the municipality asks for an energy advisor to be involved in the project. Identifying risks that can come up will help you allocate a risk contingency into the budget.

As we move onto other considerations, in construction there are three basic levels of risk: interior, exterior, groundwork.

Construction Risk Levels

Level 1 : Interior: Asbestos and rot – Yikes!

Don’t worry yet, you can test for asbestos anytime, and it’s not too intrusive. Results are typically available in a week. Houses built between the ’60s and late ’80s were often built with asbestos.

For rot identification, heat cameras can catch trouble spots early, but it’s not always possible to predict where you might find rot – maybe a past renovation fixed a leak but didn’t replace the rotten structure – you won’t see this on a thermal camera, but it will need to be addressed and budget added to cover this risk.

Level 2 : Exterior: Rot, rainscreen, and flashing

In the general Vancouver region houses built in the ’90s with stucco can have some serious water issues. This damage can get more prominent in the wetter conditions of North Vancouver and West Vancouver.

When replacing the outside of a home, the cladding, you need to replace it with a rainscreen cladding assembly and upgraded flashing. That means that if you end up doing more exterior work than you first intended, maybe because you are chasing rot, replacing the old stuff is more expensive than the stuff you took off.

Exterior Tyvek wrap and cladding

Level 3: Excavations

Depending on the age of your home you may need to consider if there is an oil tank on the property. Oil tanks, did this house have an oil tank? You may have no idea. Look for “breather tubes” or have your contractor scan for an oil tank.

An oil tank comes with a risk of “contaminated soil”, so if you are doing groundwork you want to check on this first. There will be a cost associated with the discovery and testing of the soil.

If you find out you have poor soil your contractor may need to do additional assessments. Since you need to put your house foundation on solid ground, old tree stumps, fluffy dirt / “fill”, and other unsuitable soils need to be removed so that your house settles evenly. Dig a test hole if you can. The lower you need to go to get to solid ground, the more you need to build it back up. Not only excavation costs increase, but so do the concrete costs.

Setting up your contingency

Now that you’ve learned about some of the risks before you build you’ll want to manage these risks with a personal contingency.

Think about these key construction budget points:

    1. When setting your budget, keep an amount out of the conversation with your designer and contractor as a “personal contingency”
    2. This personal contingency should reflect the risk level your project possesses.
    3. “Construction Contingency” is an amount your contractor should have included in their proposal, it’s different from the personal contingency.
    4. As you pass certain “risk points” you can consider adding back some of the “desires” that you scratched off originally, but not until the risks have been addressed.
    5. Can your contractor track your spending against their budget?
      • This is worth asking. Not all contractors do this, and, considering how renovations are typical “cost-plus” this can be a major risk to the owner.
      • You need to be able to track where you are versus where you expected to be to know where you’re going.

Asking what isn’t included in your construction estimate allows you to better prepare to address risks and build up an appropriate contingency for your renovation project.

If you enjoyed this article, sign up for our e-newsletter to get notified about our next article in the series Tip #3 – Team Alignment To Stay On Budget”

Can’t wait? Watch the Facebook Live event recording for the full series and don’t forget to like our Facebook page to see more exciting content about home renovations.


About Upward

Upward Construction & Renovation is a custom home and large renovation construction firm serving clients in North Vancouver, West Vancouver and Vancouver. Feel free to connect to discuss your upcoming project: info@upwardconstruction.ca.

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