Quick answer: Remodels are usually priced as a project built from demolition, materials, finish allowances, labor by trade or phase, subcontractors, permits and disposal, with markup for overhead and profit and terms for hidden conditions.
Pricing methods for remodeling jobs
| Method | When it fits |
|---|---|
| Fixed project price | Defined scopes where finishes are chosen before the estimate. |
| Fixed price with allowances | Projects where the customer still has to choose tile, fixtures or cabinets. |
| Cost plus | Projects with many unknowns, where the customer pays costs plus an agreed fee. |
You can use more than one method in the same business. What matters is that the customer can see which one applies to their estimate.
What drives the price of a remodeling job
- Scope of demolition and structural changes.
- Finish selections and allowance levels.
- Subcontracted trades and their quotes.
- Permits, inspections and dumpster.
- Hidden conditions found once walls are opened.
What to check before you quote
- Which finishes are chosen, and which need allowances?
- Will walls, plumbing or electrical move?
- How will the customer live in the home during the work?
- What is the budget range they are working with?
Write the answers into the scope of work. When the price later depends on one of them, the customer can see the assumption you priced on.
Worked example: bathroom remodel
This is the example job in our free remodeling estimate template. The quantities and prices are illustrations to show the structure, not price recommendations; use your own costs and rates.
| Line item | Qty | Unit | Example amount |
|---|---|---|---|
| Demolition and disposal | 1 | job | $1,200 |
| Plumbing rough-in and fixture setting | 1 | job | $2,400 |
| Electrical: lighting, fan and GFCI outlets | 1 | job | $1,350 |
| Cement board and waterproofing | 1 | job | $950 |
| Shower and floor tile, installed | 140 | sq ft | $3,360 |
| Vanity, top and faucet (allowance) | 1 | allowance | $1,600 |
| Toilet (allowance) | 1 | allowance | $450 |
| Drywall, paint and trim | 1 | job | $1,100 |
| Glass shower door | 1 | each | $1,300 |
| Permit and project management | 1 | job | $900 |
| Example subtotal | $14,610 |
Notice that each part of the price has its own line. A customer comparing your estimate with a cheaper one can see what the other bid may have left out, and you can discuss one line instead of defending the whole total.
Build your markup on real overhead
Whatever the method, a price has to cover four things: direct costs (materials and parts), labor at a loaded rate that includes payroll costs, overhead such as vehicles, insurance, software and the office, and profit. A simple check:
- Add up your yearly overhead and divide it by the hours you can bill in a year. That is the overhead each billable hour has to carry.
- Add it to your loaded labor cost per hour to get your break-even hourly cost.
- Add your profit margin on top, and use the result for both hourly and flat-rate prices.
Margin and markup are not the same: a 50% markup on cost is a 33% margin on the price. Decide which one you are using and apply it consistently.
Send the price, then follow up
Most remodeling estimates are not lost on price alone. They are lost when the customer goes quiet and nobody checks in. Agree on a decision date when you send the estimate and follow up once on that date. Our follow-up email templates give you the wording.
Want a ready-made layout? Download the free remodeling estimate template in Excel, Word or PDF, or see how SprigDeal handles a remodeling estimate from the first quote to the signed approval.
Frequently asked questions
What is an allowance on a remodeling estimate?
An allowance is a budget for an item the customer has not chosen yet, such as tile at a set price per square foot. The final price adjusts to what they pick.
How do I handle hidden conditions in a remodel quote?
Describe them in the scope and exclusions, and say they will be priced as a written change before the work is done.