Estimate vs Proposal, what's the difference?
As a customer planning a construction project, it's important to understand the difference between an estimate and a proposal. Both provide important information about the project's scope and cost, but they serve different purposes and provide different levels of detail.
In this blog post, we'll explore the differences between estimates and proposals, and help you understand how to use each one effectively.
Estimates - An estimate is a rough calculation of the cost of a construction project. It provides an overview of the work to be done, the materials required, and the estimated cost of the project. Typically, an estimate is provided early in the planning process, and is used to help the customer determine if the project is feasible within their budget. An estimate is not a legally binding document, and it does not provide a detailed breakdown of the work to be done, and should not be counted on as a final determination of costs.
How to tell your just getting an estimate, instead of a proposal -
If the contractor gives you a price "per square foot" this is definitely an estimate. His number could be based on pricing 5 years ago, which is the last time he actually priced out a job and he may be way high on costs, or way low depending on what has been happening with the supply markets lately. A per square foot number does not take into consideration the level of custom items you may want. It's a guess at best.
If the contractor says "It should be about...." you are getting an estimate.
If you get a price that doesn't have line items to show how he got the total job cost you are getting an estimate.
A fair number of contractors feel its "fine" to just use estimates when discussing project costs with their clients. This just isn't the case, because it will take a detailed proposal to really show what the costs will be. If a contractor isn't offering to provide a full proposal, rather just work from an estimate, buyer beware!
If you hire a contractor based on an estimate and then get surprised with additional costs, then that's "shame on you" for not requiring a full proposal and a signed agreement before you begin work. If you move forward with just an estimate, you should expect to pay for all those surprise changes because an estimate isn't a contract and you can't hold the contractor to an "estimated" cost.
Proposals - A proposal, on the other hand, is a detailed description of the work to be done, including a breakdown of the costs associated with each task. It includes detailed costs for each specific trade contractor that will work in your home, specific details about the materials to be used, the timeline for the project, and any other relevant information. A proposal is a legally binding document, or part of one, and once accepted, becomes the contract, or part of the contract for the project.
Proposals are typically provided after an initial estimate has been shared, and provide the customer with a detailed overview of the work to be done and a more accurate cost for the project.
Key Differences - The key differences between an estimate and a proposal are as follows:
Level of Detail: An estimate provides a rough calculation of the cost of a project only to be used initially to determine project feasibility, while a proposal provides a detailed breakdown of the work to be done, including specific costs and timelines.
Legally Binding: An estimate is not a legally binding document, while a proposal is a legally binding contract once accepted.
Timing: An estimate is provided early in the planning process, while a proposal is often provided after an estimate has been received and/or accepted and the details of the project have been finalized.
Purpose: An estimate is used to determine if a project is feasible within a budget, while a proposal provides the customer with a detailed breakdown of the work to be done and becomes the legally binding contract for the project.
In Conclusion, understanding the difference between an estimate and a proposal is an important part of planning any construction project. While both provide valuable information about the project's scope and cost, they serve different purposes and contain different levels of detail. By working with a reputable construction company you can be sure that you receive accurate and detailed estimates and proposals, and that your project is completed to your satisfaction.
Contact us today to learn more about our services and how we can help you plan your next construction project.