How much will that cost?
This question plays on the minds of buyers and investors when making a home buying decision. This past week I came across an article by a Realtor who was greatly upset by an inspector who wrote down estimates of costs on his report. He felt that this was against the code in Texas, which it is not. For this agent, the true problem was that the buyer wanted a deduction, which was his true complaint.
I began to consider these quick quotes by inspectors, and what their value might be. Giving a rough estimate can be tricky, and it may be inaccurate. I like to give my clients a general idea when speaking to them, but if they wish a written estimate, I prefer to provide that a day later. Here is the thing; I know roughly how long it would take me to repair an item and I know a general cost for the materials, so I base my estimate on that knowledge. However, if we are speaking of something more specific, I think it is better for me to check my facts to produce my estimate on repairs. Generally, for large repairs, I would suggest calling in an expert. For example, foundation companies handle foundation repair differently. This can produce costs from $5000 to $12,000 for a typical sized home to correct the same problem. Should I estimate in the middle of that range, or the high end? In any scenario, I could be giving a figure that may be far different from what the buyer may encounter.
As an investor, you need to have the best information. With this in mind, I would recommend that you give your inspector or contractor time to develop an accurate estimation of the costs to repair a home. This should be at least a day. They should also go into their reasoning for the estimates, and it would be best if they included this in their report. If you are doing this on your own, use a site for a home center to obtain prices of goods. Then imagine how long the job may take. I would use the average cost of labor for any job to be $65 per hour. This is loosely the price different quality contractors would charge for an hourly rate.
Let us create an example. I want a new toilet. If you are unfamiliar with the procedure, look it up in a home repair manual. You will see that you will need a wax ring to seal the base to the drain($3). You may also need a new flange ($10), and a new water supply tube ($6). Then there is the toilet ($230). All of the prices that I quoted are rounded up from parts that I found on Home Depot's site. You may choose other parts, which can dramatically change the price. So we are looking at roughly $250 in parts. I know that I can pull and replace a toilet within an hour, but let us be safe and say that it takes two hours. The plumber's labor cost would be $130. Now we are up to $380 for the new toilet, and we would have to add tax. Is this estimate reasonable? Maybe. Toilets can range in price from $200 to $400 on average. A contractor may only charge for the hour, or the may add on a standard fee from their firm for travel expenses and such. That leaves my $380 to be around an average price for this repair. I hope that the one thing that this example shows you is that parts and labor should be separated on your contractor/inspector's estimate, and you may want to assume that they are choosing the basic part.
I do not think it is a bad thing to ask for an estimate.Just be aware what that estimate might mean.
Frank Schulte-Ladbeck
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