When you are considering hiring a contractor to renovate your home there are typically two types of contracts that you can enter into: a fixed price contract and a cost plus contract. A cost-plus contract mandates that you pay a percentage above the “cost” of the materials and labor that were used and employed within the project.The danger of this type of agreement is that the costs can quickly add up, whether it’s by increased product costs, or a few costly choices in the middle of the project that you didn’t realize would have a big impact on the overall price. We have developed a hybrid system known as Client Control™ that is the best of both worlds! We establish fixed prices from our trade partners and suppliers that create cost certainty plus you receive 100% transparency and control via an overall cost plus model.

The way to manage this risk from a client’s perspective is to find a contractor that you trust and who wants to work collaboratively with you on your project and, most critically, to demand transparency throughout the entire process.

Basic rules of thumb that will help you keep track and manage your costs

1) Document as much as possible. The first step is defining the scope of the overall project together in writing. Once this is complete, for each task, material, or item to be used in your project, write out individual scope sheets so that you and your contractor are clear on the tasks to be completed. This is also vital to hand out to sub trades employed on the project as it gives them a clear mandate on what to quote on. Often times a sub trade may have a recommendation on a method or material and your scope of work may change. This is ok, as long as the document is updated and adjusted.

2) Request to view all quotes from your contractor. This is extremely important as you are responsible for paying all costs, so getting a chance to review sub contractor quotes helps understand where your money is being spent and may raise questions. Don’t be afraid to request that your contractor get a second or third quote. This will help ensure that you are paying a fair price for both labor and materials.

3) During the project, request regular meetings with your contractor to review the budget and progress of the project. By reviewing the budget regularly, this will reduce the amount of surprises at the end of the project.

4) When the project is complete, request copies of all the invoices that have been coded to your job. Your agreement mandates that you pay the costs of the project, however, mistakes happen and reviewing the invoices that have come in and matching them to the initial quotes is a great way to ensure that you are getting full value for services.

As you can see, this is a time consuming and detail-oriented process, which means that, depending on the size of the project, it can require considerably more project management hours than a typical new home construction. Invariably this means that the cost of project management your contractor allocates to your project will be a large part of the cost of the renovation. However, the risk of not having a detail-oriented contractor that delivers transparency often leads to increased client stress, ballooning costs and a nightmare experience.

Please watch our video explaining Client Control™ and also download our report outlining the benefits of this revolutionary method.