Some contractors swear against them. Some swear by them. In our business, we currently use Fixed Price Contracts to provide clients with the security & confidence that their project costs what we say it will. Many remodeling companies prefer to use a Cost-Plus strategy, which provides the contractor more security than the homeowner, as they hedge against the unknown of remodels compared to a new build. If you're considering a remodel, consider a contractor who provides a Fixed Price Contract, such as ours. I'd like to outline our process of creating them...
Step 1: Site Visit
When a homeowner has a project in mind, they reach out to us & schedule an initial site visit. In this walk-through, I let the client tell me about their plans, where they're at in the process, & explain what my business is here to perform for them (Manage the entire remodel, hiring subs to perform the work, & self-performing the trim carpentry). I then take my notes, measurements, & photos from the walk-through & begin forming our initial estimate within 24-48 hours. This initial estimate is created using budgets from previous remodels, local data, & pricing of comparable projects.
Step 2: Detailed Proposal
After reviewing the initial estimate, the homeowner then decides to move forward, & we begin scheduling walk-throughs with our subcontractors. Subs come see the site, go over the scope of work for their trade, & provide us, the GC, with their bid to perform on this project. Each bid from these subs (electrician, plumber, drywall, flooring, etc.) is then used to create our detailed proposal for the homeowner, with accurate pricing before work ever starts. We don't set a firm price from the start & hassle subs with fitting our budget. We want the subs, who are experts in their trades, to provide us with their cost to perform, & we take that price to the homeowner.
Step 3: Review & Remodel
We've now compiled the accurate bids from all of the necessary subs, created our Fixed Price Contract, & are ready to send it to the homeowner to get a project green light. When we send this final proposal, we review the scope of work again with the client, ensuring that the work we have now quoted, is still the work they have in mind for the finished remodel. We also provide a spec sheet for owners to select their finishes (flooring, fixtures, paint, etc.). If all parties are aligned, we sign the contract, initiate the deposit, & start the permitting process with the city.
What if the owner makes changes after you've signed a Fixed Price Contract??
No problem! We simply outline those changes with the necessary subcontractors, who provide us a price for the additional work, & we create a Change Order for the client to approve & pay for. Some changes are minor & addressed early enough that a change order is not required. However, if we are about to paint when the owner decides they want to move a wall, that change order price will be significantly higher, reflecting the time & materials wasted, & our need to now perform the task again.
I hope this helps clear up how we are able to create our Fixed Price Contracts here at Lucid! We are doing our best to take the guess work out of your dream project, by providing you with information about how we operate, how the project is performed, & where we feel we could improve! I look forward to hearing about your next project!
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