What is a construction estimate?

A construction estimate sheet provides an approximated cost to clients for your residential construction project as a whole or for a portion or stage of the project. While estimates should be as accurate as possible, they are in essence an approximation and so the cost can fluctuate depending on the scope of work and how the project evolves. 

Construction estimate forms are typically used after meeting with the client and obtaining an overarching idea of what the project will entail. They are usually not too detailed but encompass a more general overview of the job and costs. Construction estimates can also be renegotiated at various stages, so it can be common to create multiple estimates throughout the course of a single project.

How is a construction estimate different from a construction bid?

Overall, your construction work estimate template will be much more simplified than a bid. Whereas construction estimates provide an approximation of the cost of your project, bids provide a firm and fixed price along with the full scope of the work with all the specifics included. Bids are in general far more detailed than your average residential construction cost breakdown sheet and are non-negotiable—meaning that the cost won’t change throughout the duration of the project. 

Why are construction cost estimates important?

Residential construction estimating provides a necessary bridge between you and the client before work is initiated to establish an understood cost for the project. When you give your client a well-thought-out estimate prior to creating a fully detailed bid, you allow your client the opportunity to know the “ballpark” estimate of your project costs and if your expenses align with their budget—without wasting time on more elaborate documentation. As a residential contractor and business owner, providing short and sweet estimate sheets for construction also helps you weed out clients that may not be a good fit for your service costs and bottom line. 

Who is this construction estimate example template for?

Many different types of residential construction professionals can benefit from using our construction job estimate template. Whether you’re a remodeler, general contractor, builder, project manager or specialty contractor, being able to provide a quick, accurate and succinct estimate for clients will provide invaluable time-saving and efficiency for your business and cost-profit analysis for projects.

What should be included in a construction estimate?

Any sample cost estimate for construction should include a range of standardized, “boilerplate” information about your and your business along with specific details for each particular project. Let’s explore some of the key sections and what they entail.

Business Name, Logo & Contact Information

Always provide your proper business name, professional logo and business contact information during residential construction estimating so that you can be properly identified. 

Client Contact Information

You’ll also want to make sure that you explicitly distinguish who your client is, including their full name, address and contact information on your construction estimate sheet. This will help ensure that your estimate is addressed to this particular client’s project and none other (as pricing and estimations will vary from client to client).

Estimate Number

You’ll want to enumerate each of your estimate sheets for construction with their own unique number. Keeping your estimates organized by number will help you to more quickly locate a client’s estimate and essential information when needed. 

Labor & Materials

Your labor and materials estimation will depend on the type of work being performed for each space/area of your construction project and the required materials. For example, a new home construction cost breakdown spreadsheet may differ drastically from a construction estimate form for a single bathroom remodel project. Keep these line items separate for easier reviewing, and make sure to provide a buffer of labor, time and material costs in the case of overruns. Learn more about Construction Billing Methods and How to Price Construction Jobs to cover your margins.

Summary of Costs

Beyond labor and materials, the summary of costs section will include additional expenses in your estimate, such as materials markup, operations costs, taxes, shipping and any other charges that your client will need to be informed of during the overall residential building estimating and costing.

Acceptance & Signature

When learning how to prepare a construction estimate, it’s essential to include a section for your client to acknowledge they’ve read and understood the estimate in full and agree to the terms. Many online resources provide contractor estimate disclaimer samples that you can tailor to your needs. Make sure your estimate is legally sound by obtaining a client signature and returning a counter-signed final copy to your client.

Optional sections to consider for construction estimates

Room

When creating your residential construction estimate template, keep in mind that you can also organize your project estimate by rooms to help clients more easily see where costs are going to each section of the job.

Scope of Work

To make your estimate more complete, you can include a construction cost estimate disclaimer regarding the scope of work for your project. This will provide more detail and an overall description of the work to be done, which will give your client a fuller picture and provide more clarity, and will also come in handy if your estimate will serve as your contract.

Terms & Conditions

If your residential construction and remodeling estimates will also serve as your contracts, then make sure to include your terms and conditions such as how long an estimate is valid for, when payment is due, what will need to be done to initiate work as well as any additional items and costs outside of what have been mentioned prior.

How do you write a construction estimate?

Putting together a solid construction estimate will require careful preparation, procedures and follow-up. Read on for how to do a construction estimate in 6 steps. 

1. Complete a discovery call or conduct a client consultation

Your initial call with the client is essential for preparing your construction estimate. Make sure to ask for as much essential information as possible, such as the size of the space, which areas of the space will be included in the project and the desired materials and styles the client would like to incorporate into the final design or remodel. 

2. Decide on floor plans

Mapping out the floor plans for your construction work is key to learning how to do construction estimating. Floor plans will help you better understand the scope of the project and be able to more accurately allocate projected costs. 

3. Incorporate costs and do takeoffs

With floor plans in hand, now you can factor in labor and materials costs to calculate the overall amount to complete your project in the actual space per square foot. Learn more about How to Do Construction Takeoffs.

4. Leverage software and tools to create your estimate

Software like Houzz Pro can streamline your discovery call to takeoffs to project estimation process, saving you time and hassle. Check out our built-in estimating feature and learn more.

5. Leave a buffer to avoid cost overruns

It’s said that it’s better to underpromise and overdeliver than it is to the contrary. The same goes for estimating costs for your construction projects. Make sure to allow a financial buffer in your estimates for cost overruns in the event that unanticipated expenses creep up during the course of your work. 

6. Communicate with the client to clarify next steps 

After you’ve provided your construction estimate to your client, give them a written and verbal reminder about the next steps for working together. Remind your client that your estimate and pricing approximation is good through a predetermined date and provide a convenient method for your client to sign and return the estimate (via email and e-signature, for example). Also let your client know of a retainer or deposit required to initiate work and how to easily provide that to you.

Additional tips for building your construction cost estimate template

How long should it take to fill out a construction estimate form?

While your residential construction estimate template won’t take nearly as long as a bid to fill out, it can still take an hour or more to complete manually. If you’re wanting to simplify your process, using construction estimating software can be a huge time-saver, especially when you’re generating a high volume of estimates for clients. 

Conclusion

Whether using software to generate your estimate or our construction estimate template (compatible with Microsoft Word and other document editors), having a go-to format or process for estimating your construction projects will make your work more efficient. Once you're ready to invoice for your work, you'll want to keep reading our Guide to Creating Construction Invoices to learn more.

Want to take estimates and takeoffs to the next level? Sign up for a free trial of Houzz Pro to streamline your construction estimation process and online payments, obtain e-signatures and much more.