This is an educated guess about the time and material costs necessary to complete your medium to large job. Usually, you will be provided a low and a high number that normally range within 20% of each other. The advantage is that you pay the actual cost and no extra markup to cover contingencies. The disadvantage is that you do not know your exact cost in advance, but if you are comfortable with a price range then you can save money.
This is a firm quote on labor and materials for your job and will be the amount you pay. The advantage is that you know the exact cost up front. The disadvantage is that the contractor has to plan on unforeseen problems and your cost will be substantially higher than other methods because the contractor has to charge more to cover the risk of unexpected costs.
T + M:
You are charged only for the actual time worked and materials purchased. The advantage of this method is that it is the least costly (estimates are always calculated at a higher hourly rate) and fastest way to have many small to medium sized projects done. Also, it is easy to expand your to-do list without changing any contracts. The disadvantage is that you do not have a firm price up front, but rather an approximate time frame.
PRICE NOT TO EXCEED:
This is like T+M but provides the homeowner with a price the project will not exceed. Typically, the contractor will quote you a price they are sure of, taking all unexpected problems into account. This method will be slightly more expensive than T+M, but it is your second best choice to keep your costs down on small to medium sized projects.
Damage discovered that could not be seen before starting your project is not included in any of these methods. AEH Builders will notify you of this and give you a written change order, upon request, with any additional costs as a result before proceeding. AEH Builders’s policy is to stop work, inform you of any problems we discovered, and, if requested, give you a written change order detailing all the additional costs for you to approve before continuing your project.
Depending upon the scope of your project, AEH Builders can work with you in any of these ways, and we have found it’s best for you to choose T+M for typical “handyman work”, and the Price Not to Exceed option for larger projects.