Calling a contractor to assess the cost of a renovation when purchasing a new home is a chicken and egg game.   The buyer doesn't want to put a contract in without knowing the costs of doing the renovation, and the contractor doesn't want to waste his time evaluating a property that will never be purchased.  I play this game with my girlfriend who is in the market for a new home and knows for sure that I'll be doing the work.   I want her to look at the place seriously and get it under contract before I come out and she doesn't want to bother with the paperwork if it can't be rehabed for a certain price.

So this is how we settled it.

To get a rough estimate of a renovation without any major system needing repair:

First, figure a kitchen will cost 25K to 50K, a bathroom about 10 to 15, a master bath about 25K, flooring 10/square foot for hardwood, and 100 dollars a linear foot for any walls you want built or removed.  Then add 25 % to that.  If that makes sense, then put a contract in using that as the estimate and if accepted, I'll come in and do a rough study.

Another way to look at it is to count a gut rehab at $75/ft for good and 100 to 200/ft for great.

A rough study take about 2 to 4 hours depending on how many rooms have to be done and how compromised the property is.   If there are water leaks or floors that are uneven, the source of the problem really has to be undertsood in order to get a ball park price.  If the rehab requires reconfiguration of rooms particularly if space is tight that takes more time and may not even be possible to understand without detailed drawings.

Some properties lend themselves to shortcuts.  Bungalows in Chicago are built more or less the same way so understanding what can be done with them and how much it will cost is fast work.

Getting from a rough estimate to a precise estimate requires plans and specifications though some contractors just ball park and live with the results.  You can count on the fact though that if you got the price before the specs were definined, there will be extras or everything the contractor puts in will be on the cheap.

Someone called today regarding a 203K consultant that he had hired to evaluate the rehab.  The potential client had very artfully drawn up plans for his house.  There were a lot of good ideas but no dimensions.   His 203 K consultant who seemed to be a home inspector with some construction experience had given him the idea that it would cost about 100K to do his rehab.  He had a contract on the place but no financing in place -- thus the 203 K consultant.

After looking at his intended plans, his 203K consultant’s evaluation, and listening to his budget, I did a ball park estimate and came up with about 150K plus to get the work done.  The problem with many consultants with construction experience is that their experience was as a carpenter or plumber but not as a GC.   They have tables and formulas but they really have never grappled with pricing and understood all the details that need to be worked through. 

In this particular home, the potential client wanted to move and reconfigure washrooms.  However, the home was built on a concrete slab.  This is complicated as waste needs to flow down a steady gradient of 1/4 inch per foot (code) and one cannot see the height of the existing 3 inch toilet waste lines that will need to be connected to.   It may work and it may require running the entire line again to the outside cutting concrete and digging under walls all the way.  How can you estimate the cost without knowing what’s there?  It’s guess work and it requires a large contingency budget.

There are some technologies that can help.  There are pumps to eject waste upwards making it possible place a toilet anywhere.  However, they require electricity and they're not particularly pleasing to look at.   You can't know how a future buyer will evaluate the work.  It might be a deal breaker.

If people call us to come out and look at properties, we charge about $200/hr with the caveat that if we get the construction job on that particular house, the price is credited back to the client.  As GC's, we have a better chance at spotting problems that will add costs than architects who have less experience in the field.  As far as 203 K consultants who've taken a course and passed a test, anything is possible.  In general my feeling is that they're good for spotting problems -- they can tell you what needs to be fixed, but they're not so good at telling you how much it will cost.  One thing we at Stratagem Construction and Habitar Design can bring to the table is that we understand real estate development as well meaning we can tell you whether the changes you want or the entire enterprise makes sense from a resale point of view.