Expert: Dan Griffin - 4/3/2009

Question
Hello Mr. Griffin
My question in in regard to the cost and estimate of an addition to a home. We purchased a new home and decided to add a room. The original builder agreed to do the addition even though they normally only build new homes. We were given a price based on square footage. Before they began work, we decided we wanted to add a few more sq. ft. Originally we wanted a room with a storage room. The storage area was about 160 sq'. Because of some problems with the roof line it became necessary to have the storage part built as a separate building.
My question regards the difference in cost and how these costs are normally calculated. The contractor simply added the additional sq' which in the room itself was about 72, in the storage bldg 20, averaged it and increased the price of EVERYTHING accordingly. Electrical, flooring, heat/air even the sod, fencing outside was increased in cost by the additional 92 Sq.ft. I thought each craft (framers, plumbers etc.) might charge either by the hour or by the job. Is charging by the sq' common practice? And should the cost of the additional footage be calculated in this manner?
My old house needs considerable work to get it ready for sale and I am thinking those contractors are going to figure their estimates differently; as in hourly or by job.

Thank you sir in advance for your time and consideration.
Garry

Answer
Garry, an accurate labor and material bid takes a lot of time and research.  It may not seem fair or accurate to you, but it is surprising how often a simple square foot number comes out being pretty darn accurate.  Sometimes it will actually be in your favor, if some phase is more costly than normal.  It is an educated gamble on the contractor's part as is all bid work.  Another simple method of bidding says that labor is half and material is half with profit and overhead added on top.  This one can be very wrong depending on variables.

Many trades' major costs are simply in staffing and mobilizing a job.  Once there, it doesn't matter much whether they install 2 units or 15 units even if it adds an extra day.  Your contractor feels he can keep his costs covered and make a profit at his SF number.  The roof and the bricks don't care whether the space is storage or living space.  The lawn gets torn up for either one.

As to your other house, remodel usually costs much more than new on a SF basis.  A contractor has to cover materials, labor, profit and overhead to stay in business.  He will need to spend more time on estimating or throw a larger number at it to keep things covered.  You can sure do the contracting yourself, though I don't recommend it for many reasons.  At best it will save you 10-20% and is much more liable to cost you more.