Watch Out for These Common Mistakes Made in Construction Estimating

Watch Out for These Common Mistakes Made in Construction Estimating

Watch Out for These Common Mistakes Made in Construction Estimating

Posted on May 6, 2019

Watch Out for These Common Mistakes Made in Construction Estimating

There are many tough jobs in construction, including estimating. The truth is that profits are significantly affected by how accurate estimates are and how well they match up to final costs. As a construction lender, you’d like to think that your clients’ construction estimates are accurate, yet a recent study found that nearly half of those responding did not feel confident in their estimates.

At Fund Control we do not work directly on estimates but we do find that construction lenders may be able to benefit from helping their clients avoid some of these common mistakes in construction estimating. Read on to learn what they are and then contact us at 800-625-5972 if you are interested in learning more about an extremely effective fund control software option.

Failing to Conduct a Site Visit

It is common for prospective bidders to have a chance to go to a pre-bid meeting where they can visit the jobsite. These may be mandatory even in order to submit a bid – and they should be. There is no such thing as two identical jobsites. While there is a lot a person can learn by looking at pictures and considering data, there is no substitute for actually visiting a site.

This inspection should involve measurements, a close look at topography, and soil bore samples. They should also consider road access, traffic, and the amount of space there will be for staging, having materials delivered, and other aspects of the construction project.

Not Properly Estimating Labor Costs

Unfortunately it is true that labor costs are both some of the hardest costs to estimate and the costs that can have the biggest negative impact on the end costs. One of the benefits of using our unique software is that you can easily break down the budgets and set notifications so that you are alerted as soon as any budget costs are changed.

Improperly Estimating the Costs of Materials and Supplies

While recent studies have shown that construction materials and supplies are, on average, decreasing in price, they still make up a huge percentage of the average construction budget. The difficulty in estimating these costs include the fact that prices can change from one time of the year to another and tariffs are making prices uncertain.

The best way to avoid issues with large deficits in the estimated cost of materials and the real cost of materials is to lock in prices. When quotes are received, make sure they are good not just for a month but for six months or even a year. This helps make it much easier to get closer estimates to actual material and supply costs.

We Are Here to Help with All Your Fund Control Needs

No matter if you are working for a mortgage company, a bank, a private equity company, or another company entirely, at Fund Control we are here to provide an innovative fund control solution that allows you to customize it to your exact needs.