To estimate new construction costs for different projects, you need to be aware of all methods. By using those methods, accuracy is achieved, and you can prevent budget overruns. This guide is prepared for you to provide a sequential methodology for performing a thorough cost estimate. By reviewing it, you can easily break down complex tasks into manageable tasks. However, understanding these steps is quite important from construction pre-planning to execution.
Well, the cost estimation process is one of the most crucial construction processes. It is the only step that helps to decide whether the project will be completed successfully or not! Plus, if you are going to estimate cost for new home construction to bid, then never compromise on accuracy! Plan your projects with smart decisions and save your funds.
DIVE INTO OUR STEP-BY-STEP GUIDE TO ESTIMATE NEW HOME CONSTRUCTION COSTS AND SECURE YOUR FUNDS TO CONVERT THEM INTO A SUCCESSFUL REALITY!
Understanding Construction Cost Estimation
Construction cost estimation is a detailed process that calculates all the required expenses for constructing a project. All the calculations are judged before the construction process begins. The expenses are covered from the groundwork to the project’s finish. But this process requires a comprehensive knowledge of construction materials, specifications, techniques, building codes, and current pricing trends.
Why Accurate Cost Estimation Matters?
The importance of accurate cost estimation can never be neglected because of its impact on the project funds. That is why busy contractors seek help from experienced Construction Cost Estimating Services to win bids.
For busy contractors, if they underestimate the costs, it simply leads to overbudgeting. Such estimates never help in winning profitable contracts.
Professional construction estimators generate preliminary estimates that help contractors and owners complete the projects without errors. Always keep in mind that estimates directly impact the project’s success.
Cost estimation for new construction Steps
Step 1: Gather Information
The base of accurate construction estimates begins with a detailed information gathering. This is the very first step to collect all the project information and then conduct an assessment.
You have to begin by obtaining all the architectural drawings and plans. These blueprints are the best for understanding the project scope and complexity. So, pay attention to all the construction specs that can impact the decisions.
After that, it is also necessary to visit the sites and look into the soil conditions and other things. It will help in estimating the right cost according to the site conditions.
Step 2: Select Appropriate Estimation Methodology
The next thing in the process is to decide which method you’re going to apply. Different projects require different methodologies. You have to select the right one.
The decision depends on the project type and available information. Well, during the early stages of the project, the cost per square foot helps in estimating the right figure. Or you can use a detailed estimate method that involves calculating the cost for every single project element.
Step 3: Perform Quantity Takeoff
The next step is to perform quantity takeoffs that include measuring and counting required materials, labor, and equipment. Professional Estimating Company uses digital takeoff software to measure quantities. Modern software helps to speed up the process and enhance accuracy. All the information is written in MasterFormat to prevent confusion. Do not forget to consider waste factors and contingency.
Step 4: Calculate Direct Costs
Direct costs are related to the expenses that belong directly to construction work. Material expenses are estimated after completing quantity takeoffs. After that, labor cost is also estimated by determining the required labor hours for each task. Additionally, equipment expenses are also important, which include rental fees, etc.
Step 5: Include indirect costs
During the estimation process, do not neglect indirect costs. They also impact the overall cost. These costs are related to:
- General and Administrative Expenses
- Permits and Fees
- Temporary Facilities and Services
- Contingency Allowances
Step 6: Profit and Risk
The final step is to complete the project by covering business profit and project-specific risks, according to the recent research, average builder profit margins at 11.0% of the sales price. Well, the margins are based on project type and market conditions.
Plus, the risks associated with the project must also be considered to prevent budget overruns and delays. For that, tight schedules, challenging site conditions, etc, are factored in!
Step 7: Review and Deliver
Before submitting an estimate, a thorough review and validation are important. It guarantees accurate and flawless results. Review the final estimates from senior estimators. Make sure that not even a single thing is ignored. You can confirm the estimates by comparing them with similar past projects.
After finalizing, deliver to your clients with clear presentations and a cost breakdown of each construction phase or trade. However, A well-organized estimate builds credibility and facilitates client understanding and approval.
Conclusion
So, clarity and precision are essential before closing estimates. Modernizing your approach if you want to excel in this field is equally important. Therefore, you should adopt a suitable approach to Estimate New Home Construction Costs for projects of all kinds. But it is highly recommended to get a professional construction takeoff rather than just guessing!
