I’ve spent years on job sites and getting houses ready to sell or rent, and one thing keeps bugging me..
When you’re looking at a property, you call a contractor to come out and give you a price. But the guy telling you what’s wrong is the same guy who wants the job. Then you call two more, and each one gives you a number for a different job. One includes the roof, one doesn’t, one says the electrical is fine. Good luck comparing that.
There’s another way to do it, and I’m wondering if anyone here uses it:
Someone who doesn’t do repairs walks the house and writes up one scope of work. Everything that’s wrong, item by item.
They get paid for the scope, not for the size of the job, so there’s no reason to pump it up.
Then contractors bid on that same list, so you can actually compare the numbers.
For investors I see a few pluses:
Your rehab number is based on a full list, not just what the first contractor noticed.
A written scope from a third party helps when you negotiate with the seller.
The person pricing the job is on your side, not across the table.
Fewer “we found something” surprises halfway through.
My questions:
Does it make sense to you to pay an estimator instead of getting “free” scopes from a few contractors?
Should estimates be paid? It’s real people’s time. Asking a contractor to come out when you know their number will probably just end up as a line in your purchase contract doesn’t feel right to me. Is it fair to them?
How much would you pay for a detailed scope of work plus 3–5 quick bids you can use for your contract?
Would love to hear how you all handle this.
1 vote total
I’ve spent years on job sites and getting houses ready to sell or rent, and one thing keeps bugging me..
When you’re looking at a property, you call a contractor to come out and give you a price. But the guy telling you what’s wrong is the same guy who wants the job. Then you call two more, and each one gives you a number for a different job. One includes the roof, one doesn’t, one says the electrical is fine. Good luck comparing that.
There’s another way to do it, and I’m wondering if anyone here uses it:
Someone who doesn’t do repairs walks the house and writes up one scope of work. Everything that’s wrong, item by item.
They get paid for the scope, not for the size of the job, so there’s no reason to pump it up.
Then contractors bid on that same list, so you can actually compare the numbers.
For investors I see a few pluses:
Your rehab number is based on a full list, not just what the first contractor noticed.
A written scope from a third party helps when you negotiate with the seller.
The person pricing the job is on your side, not across the table.
Fewer “we found something” surprises halfway through.
My questions:
Does it make sense to you to pay an estimator instead of getting “free” scopes from a few contractors?
Should estimates be paid? It’s real people’s time. Asking a contractor to come out when you know their number will probably just end up as a line in your purchase contract doesn’t feel right to me. Is it fair to them?
How much would you pay for a detailed scope of work plus 3–5 quick bids you can use for your contract?
Would love to hear how you all handle this.
@Kate Mish, I actually think paying for an independent scope can make sense, especially for larger renovations. Having contractors bid on the same list makes it easier to compare prices and understand what you're really getting. I also think it's fair for contractors to charge for their time when a project requires a detailed inspection or estimate. As for pricing, I'd want to know how detailed the scope is and what's included before deciding what I'd pay.
I'm a real estate attorney, broker, and investor based in Maryland, and I work with clients on property transactions, contracts, and other real estate matters. I've seen how unclear work descriptions and unexpected changes can lead to disagreements over costs and responsibilities. Having everything clearly written out from the beginning can help prevent those issues.
I appreciate you bringing this up, @Kate Mish! It's an interesting approach that could help both investors and contractors. Happy to stay connected!
I’ve spent years on job sites and getting houses ready to sell or rent, and one thing keeps bugging me..
When you’re looking at a property, you call a contractor to come out and give you a price. But the guy telling you what’s wrong is the same guy who wants the job. Then you call two more, and each one gives you a number for a different job. One includes the roof, one doesn’t, one says the electrical is fine. Good luck comparing that.
There’s another way to do it, and I’m wondering if anyone here uses it:
Someone who doesn’t do repairs walks the house and writes up one scope of work. Everything that’s wrong, item by item.
They get paid for the scope, not for the size of the job, so there’s no reason to pump it up.
Then contractors bid on that same list, so you can actually compare the numbers.
For investors I see a few pluses:
Your rehab number is based on a full list, not just what the first contractor noticed.
A written scope from a third party helps when you negotiate with the seller.
The person pricing the job is on your side, not across the table.
Fewer “we found something” surprises halfway through.
My questions:
Does it make sense to you to pay an estimator instead of getting “free” scopes from a few contractors?
Should estimates be paid? It’s real people’s time. Asking a contractor to come out when you know their number will probably just end up as a line in your purchase contract doesn’t feel right to me. Is it fair to them?
How much would you pay for a detailed scope of work plus 3–5 quick bids you can use for your contract?
Would love to hear how you all handle this.
@Kate Mish, I actually think paying for an independent scope can make sense, especially for larger renovations. Having contractors bid on the same list makes it easier to compare prices and understand what you're really getting. I also think it's fair for contractors to charge for their time when a project requires a detailed inspection or estimate. As for pricing, I'd want to know how detailed the scope is and what's included before deciding what I'd pay.
I'm a real estate attorney, broker, and investor based in Maryland, and I work with clients on property transactions, contracts, and other real estate matters. I've seen how unclear work descriptions and unexpected changes can lead to disagreements over costs and responsibilities. Having everything clearly written out from the beginning can help prevent those issues.
I appreciate you bringing this up, @Kate Mish! It's an interesting approach that could help both investors and contractors. Happy to stay connected!
Thank you for your opinion. I'm glad to hear that people ( @Diana Khan ) feel the same way you do. However, words often don't match actions. It seems that when it comes to this stage, everyone forgets “the right way” and keeps doing things “for free” ))
Jeremy, I can't speak to current Cleveland comps, so I'll leave the ARVs to the locals, but on the rehab budget side for that kind of housing stock:
- Most of those neighborhoods are older houses, so budget for what's behind the walls before you count finishes: knob and tube or old wiring, undersized panels, galvanized or cast iron pipes, and old clay sewer laterals.
- Get the basement and sewer looked at before you close. Water in the basement and a bad sewer line are two of the most common ways a "cosmetic" flip turns into a big one.
- Check the roof, chimney, and porches closely. They're expensive, and on older houses they're often patched rather than fixed.
- Build your budget from a written list of the work, room by room, and have contractors bid that same list. Then add a contingency on top, because something always shows up once walls are open.
- Ask local investors what permits and inspections are taking in each city you're looking at. On a flip, delays cost you in interest.
Kyle
Kate, yes — and I'll tell you why from the buyer's side of the table in Detroit. The free estimate isn't free. The contractor pricing the job is the same person who profits from the job, so his scope quietly becomes the sales tool: one guy includes the roof, one doesn't, one says the panel is fine. You're not comparing bids, you're comparing three different houses.
A written scope from someone who doesn't do the work flips that. One list, line by line, and every contractor prices the same list. The numbers suddenly mean something, and the low bid stops being the guy who missed the most. It also changes the negotiation with the seller — a third-party scope carries weight that 'my contractor said 40' never will.
On fairness to contractors: the honest ones would rather bid a real scope than burn a Saturday writing a free estimate that gets shopped. The scope writer's fee is small next to one change order. What I'd pay depends on the house, but for a full itemized scope on a typical single-family rehab, a few hundred dollars is cheap insurance on a five-figure job.
The one condition: the scope has to be written by someone who has actually run the work. A checklist from a template misses the same things the first contractor missed.
Depends on the size of the job!
