Without a doubt, before embarking on any home construction project, whether it be remodeling an existing home, building a new home, remodeling a kitchen, or adding rooms, you would wisely research how construction prices work. and the rate of construction of the house. The evaluation and pricing of construction projects is not too complicated to understand and is definitely not quantum mechanical science. As an experienced general contractor in Los Angeles, I know how my clients think and what would make them happy, basically they want the best of the best in terms of quality and materials at the lowest possible price. Sometimes I can almost hear them thinking what they dare not ask: “do it for free”. Well, unfortunately and as the old saying goes, nothing in life is free. Knowing that the price of home construction is the main factor in the decision-making process of most people; I tend to explain how “build prices” work and how I calculate estimates.
In general, the factors that a housing contractor takes into account are: materials, labor, equipment, licenses and permits, office expenses, time and scope of work. All these elements must be considered very carefully and thoroughly before presenting the final cost of construction to the client. Any home construction fee can also vary based on the quality of the materials and the credentials of the subcontractor, as well as the area and state where the project is being done due to differences in permit costs and fees. To avoid overcharging or undercharging, the experienced home contractor also studies and reviews previous projects and current material costs to arrive at an accurate answer to the “construction price” question, as my clients often ask. .
To dig a little deeper into the cost of materials, let’s start with the fact that in any single home construction or remodeling project, builders use more than one type of material, whether it’s just for tile installation, replacement countertop, bathroom remodel, or even painting a house, the materials and equipment needed are many and the cumulative cost of all of them can be very expensive for the contractor, making the price of home construction high to owner’s eyes. Many times the contractor would need to rent heavy machinery and equipment for the job and this can also make the rate of home construction higher. The cost of specific materials may change based on quality, strength, and brands. For example, the price of tile varies widely, depending on the type and brand, so a bathroom remodel can change considerably from project to project, while the price of framing lumber is relatively the same. Of course it is not the place or scope of this information to detail the prices of materials, but rather to give an idea of what is involved in the pricing of construction work.
Professional labor, as mentioned above, is another important aspect of the home building rate equation that a general contractor will factor into the estimate. Teams of trained, experienced and licensed professionals have earned their experience through much sweat and years of hard work in the field and therefore rightfully deserve a fair wage for the high-level work they perform. When it comes to home construction and remodeling, precision and craftsmanship are crucial and should not be underestimated by homeowners because the difference between an expert and an amateur is vast.
Also, cutting corners and hiring non-professionals will cost more in the long run and it goes without saying that many of them are unlicensed which also makes it illegal. A good home contractor will choose a craftsman who has the knowledge and more than brand name materials if he needs to keep the budget down in the price building process.
Home construction is regulated by the CSLB and the city’s municipalities and almost all home renovations require some type of city permit. It is something that a builder will calculate and add to the price of construction of the home, unless it is agreed with the homeowner that the costs of the permits are covered by the client.
And last but not least, like any other business, a general contractor should have office and other overhead expenses that add a small percentage to the overall home building rate estimate given to the homeowner.
All of the above is intended to summarize in very general terms the basics of construction pricing estimation, and is the first in a series of articles on the subject of construction pricing or, as homeowners tend to say, “construction prices”.