How Should Homeowners Interpret Estimates?
For all contractors, designers and home improvement professionals, how accurate are estimates? Do most professionals shoot high and try to come in under budget? Should a homeowner expect projects to come in on budget or just near the budget? How should homeowners interpret differences between professional estimates?

Comment to the question:

Estimate: As defined by Merriam-Webster “to produce a statement of the approximate cost of” [among other things].  My approach to giving an estimate is as if I were the customer.  As a customer when someone tells me they estimate the cost to be $500 to finish project x, I take it at that.  If the vendor puts it on paper titled “Estimate”, $500 to complete project x; I read it as based on any unforeseen things, it will be $500.00 to finish that project.  If there are caveats of unforeseeable expenses, than I expect that discussion to happen during the “estimating” process.  When I give an “estimate” to the client, I let them know that this is only an estimate based on the scope of work described in the estimate.  Should other things arise, charges will be additional based on what arises.  Being in the cleaning and restoration business, to give an “estimate” to clean a carpet or air-duct is rather simple.  We are upfront with “based on the information you provided, we estimate the cost of x to be $ Y.  If our technicians arrive at the site and notice the scope of work outlined is different than on the work order, they are to call the office staff and expectations corrected.  Based on what is necessary charges may change and we communicate with the client before services commence.  How one communicates the word “estimate” is crucial to what a person may hear.

When a client asks for a bid on a certain project, it is generally do not exceed bid number that we give for the services requested and outlined in the bid.

Should a client want a proposal on what needs to be done, we discuss that and “propose” things that need to be cleaned and restored.  They may want something different than what we are proposing, we will create a bid based on the fine-tuning of the proposal.

When we perform restoration services, [unless a client is paying out of pocket], we use and industry-wide internet based software that has a initial day estimate, but by the end of the job will have a final billing.

Call it estimate/bid or proposal, communicating with the client and setting expectations of service is the key.  Over communicate with all parties involved, under promise and over deliver.

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